Ways to Give
Gift Opportunities
The following gift opportunities are tax deductible as allowed by the Internal Revenue Service. Since each individual's financial picture is unique, we recommend that donors seek the advice of their tax advisor and legal counsel as needed.
Outright Gifts can include:
* Those made by cash, check or credit card
* Tangible personal property (such as cars/jewelry/equipment)
* Publicly Traded Securities
* Closely Held Securities (considered on a case-by-case basis)
* Limited Partnership Interests (considered on a case-by-case basis)
* Real Estate (considered on a case-by-case basis)
* Matching Gift Programs
* Art
Specific Bequests | back to top
Specific Bequests made through your estate plan are an easy way to make a gift to HPA, and reduce the size of your taxable estate. Using your Will or Revocable Living Trust, you may state the size, intentions, and the restrictions of your gift.
Here is a sample of language that you may use to name HPA in your estate plan:
Unrestricted Bequest | back to top
I give ___________ (describe dollar amount, property to be given, or proportion of residuary estate) to the Hawaii Preparatory Academy, a Hawaii not-for-profit corporation, located in Kamuela, Hawaii 96743, for its general educational and charitable purposes.
Bequest to Endowment | back to top
I give ___________ (describe dollar amount, property to be given, or proportion of residuary estate) to the Hawaii Preparatory Academy, a Hawaii not-for-profit corporation, located in Kamuela, Hawaii, 96743, to establish the [ ] Endowment Fund, to be held as a permanent fund constituting part of the Academy's general endowment funds. The principal of said Fund may be invested in common with other funds of like character, provided that the identity of the Fund shall be preserved at all times. Net income from the Fund, as determined under applicable Academy policy, shall be used for the Academy's general educational and charitable purposes.
Restricted Bequest for Scholarship | back to top
I give ___________ (describe dollar amount, property to be given, or proportion of residuary estate) to the Hawaii Preparatory Academy, a Hawaii not-for-profit corporation, located in Kamuela, Hawaii, 96743, to establish the [ ] Scholarship Fund, the net income from which shall be used for financial aide to Academy students.
Charitable Remainder Trusts | back to top
There are two types of Charitable Remainder Trusts. The Charitable Remainder Annuity Trust (CRAT) and the Charitable Remainder Unitrust (CRUT).
The Charitable Remainder Annuity Trust provides for a fixed rate of income usually measured by the life or lives of named individuals. Once the rate is set in the trust, it is multiplied by the value of the initial contribution to determine the lifetime annuity payments. These payments never change throughout the term of the trust.
The Charitable Remainder Unitrust also provides for a fixed rate. The difference between the Unitrust and the CRAT is that the fixed rate is multiplied against the value of the CRUT as determined annually on the last day of the calendar year or the first business day of the next year. Assuming the assets in the CRUT increase in value over the prior annual period, the payments to the individuals in the next year also will increase by the fixed rate multiplied against the increase in value. Thus, the CRUT is anticipated to be a hedge against inflation.
Both the CRAT and CRUT provide the following benefits to a contributor:
* A fixed rate of return usually greater than earned previously on the contribution.
* Avoidance of tax on the long-term capital gain on contributed appreciated property.
* A current income tax charitable deduction for the value of the future charitable gift.
* Avoidance of estate taxes on the contribution and its appreciation in the trust.
Charitable Gift Annuities | back to top
A Charitable Gift Annuity (CGA) is an annuity with a charitable component that combines a gift with an investment. A gift annuity agreement is a contract between the charity and the annuitant(s) under which the charity is obligated to make fixed, lifetime income payments to the annuitant(s). A CGA can benefit one or two individuals and can be established for a relatively modest sum. This agreement is regulated by the state and is subject to certain reserve investment requirements. The annuity rate is based on life expectancy and can be quite generous.
Retained Life Estates | back to top
A Retained Life Estate allows you to donate your residence and still retain uninterrupted use and occupancy of the property for the remainder of your (and your survivors') lifetime. The property is conveyed by deed to the Hawaii Preparatory Academy subject to the life estate. By donating this future interest in your home to the charity of your choice, you will generate a current charitable income tax deduction and exclude the property's value from your estate for estate tax purposes. This can be done not only with a primary residence but also with a vacation home. With a vacation home, you need not use a life-estate agreement if you do not use the home for the entire year. For example, if you spend three months of every year there and the home remains unoccupied for the balance of the year, a 75 percent interest (i.e., those nine months) can be transferred to generate an immediate income tax deduction equivalent to 75 percent of the fair market value of the property. You can still enjoy the property for your customary three months each year.
Life Insurance | back to top
HPA encourages donors to name the school as the beneficiary and irrevocable owner of their paid-up life insurance policies. The charitable deduction for a paid-up policy of this nature is generally equivalent to the value of the policy's cash surrender value.
Preserving Retirement Assets | back to top
Most people are surprised to learn that if retirement assets (e.g., an IRA 401K or any other qualified plan) are left to a non-spousal beneficiary, estate and other tax obligations can reduce the amount passing to your heirs, often in excess of 75 percent of their value. This could mean that for every dollar you anticipate leaving to your loved ones, they would actually receive 25 cents. Clearly, this is not what you intended to happen to your retirement plan.
After taking into account the amount in your plan and minimum withdrawal requirements and determining what is needed to support your current lifestyle, a charitable gift might provide a solution. For example, if you intend to include charitable bequests as part of your estate, naming a charity or your foundation as beneficiary of the qualified plan will avoid all income and estate taxes. The charitable beneficiary will qualify to receive the intended amount in its entirety, at no tax cost.
HPA Pooled Income Fund | back to top
The HPA Pooled Income Fund is a type of trust that holds a donor's gift with others in a common investment pool, similar to a mutual fund, managed by our trustee, First Hawaiian Bank. Gifts to the fund are frequently in the form of cash or highly-appreciated securities. The donor and any designated beneficiary receive monthly checks for their pro-rate share of the funds earnings throughout their lives. Those earnings and the size of the gift will generally increase in size because capital gains are reinvested in the Fund. Upon the death of the income beneficiary, the principal of the donor's gift (often called a remainder interest) is transferred to HPA for purposes the donor had selected at the time of the gift.
Endowment Funds | back to top
Creating a named endowment fund is an attractive way to perpetuate the memory of a loved one or a family name, or to support a specific program or area of interest such as scholarship, athletics, or the arts. The income from the fund is used in accordance with the desires stated in the fund agreement, and the majority of the principal is invested for growth.
Big Island Scholarship Fund | back to top
This new fund was established by devoted HPA faculty members from past and present who believe in the HPA Experience. The vision of this group, and the goal of this fund, is to make an HPA education a reality for deserving Big Island students who might not otherwise attend HPA because of financial constraints.
Four faculty representatives and the director of admission serve on a selection committee that reviews all applications and awards scholarships. Half and full scholarships are available to exemplary Big Island students in grades 9-12 who have the potential to contribute to, and thrive within, the HPA Experience. Selected students who continue to meet scholarship criteria will receive aid from the fund throughout their HPA career.
The founding faculty members hope that their vision and generous gifts inspire others to support Big Island students through this fund. HPA is truly proud of this endowment and is committed to serving Big Island students.
