Gift Planning
Wharton’s Office of Gift Planning provides philanthropic services to donors like you, for whom philanthropy is an important part of life. Our goal is to help you integrate your charitable intentions with your overall tax, estate and financial plans. While you don’t give just to save on taxes, it’s a welcome benefit. We collaborate with you and your advisers to ensure that your philanthropy not only maximizes the benefit of available tax incentives, but also creates a lasting legacy, helping you to make a difference in areas important to you both today and for future generations at Wharton.
Every new planned gift strengthens the programs in which you invest and ensures that the Wharton School remains the world’s preeminent business school — one prepared to tackle the pressing problems of the 21st century and to improve the lives of people around the globe.
Select a gift plan below to learn more.
Deferred Charitable Gift Annuity
Deferred Charitable Gift Annuity
The Deferred Charitable Gift Annuity is a contract between Wharton and a donor, providing for the payment of a fixed income to one or two annuitants. These payments are determined to begin at a future date chosen by the donor. A longer delay between the creation of the deferred gift annuity and the commencement of payments result in a higher annuity rate and a larger income tax charitable deduction. Some donors view this as an attractive supplement to their retirement plan. Additional flexibility may be created by the donor specifying a range of start dates, one of which may be “triggered” by the donor in the future.
Benefits of a Deferred Charitable Gift Annuity
- Guaranteed payments backed by the assets of the University of Pennsylvania
- Partially tax-free income
- Capital gains tax savings if appreciated property is donated
- Eligibility for current income tax deduction
- Supplement retirement planning without contribution limitations
PROVIDING INCOME FOR A LOVED ONE
Barbara Wilkins, W’75 would like to increase her future retirement income, but does not want to expose any more of her assets to the equities markets, which she believes will tread water for the next several years. She elects to fund a series of charitable gift annuities at $10,000 per year. She gets a partial income tax charitable deduction with each gift annuity, which helps to lower her current tax burden, and when she reaches retirement age the gift annuities start to provide her with guaranteed payments for life. She can pick the age now when the gift annuity payments will start, or for more flexibility, pick a range of years. In Barbara’s case, she uses a $10,000 cash bonus from her employer to fund the first gift annuity, and decides it should start making payments to her in ten years, when she is 66. Due to her age and the long deferral period until the start of payments, she will get 8.2% or $820 per year, of which approximately $405 is paid to her tax-free. When it is time to set up her gift annuity next year, she could decide to use stock instead of cash to fund the gift, and set the deferral period shorter or longer, depending upon her needs. When the gift annuities mature at her death, whatever funds remain will be used to provide loan forgiveness to Wharton grads pursuing public interest work.
Charitable Bequest
Charitable Bequest
Gifts by will are one of Wharton’s most important sources of individual support. Bequests provide scholarships, professorships and fund capital projects. A bequest can be made in the form of a specific gift of cash or property, or a percentage of the remainder of an estate. The latter allows more flexibility in planning.
Unrestricted Gift (a gift that can be used where need or opportunity is greatest)
I give to The Trustees of the University of Pennsylvania, a non-profit 501(c)(3) corporation, located in Philadelphia, Pennsylvania, organized and existing under the laws of the Commonwealth of Pennsylvania, the sum of $_______ [or ______% of the rest, residue and remainder of my estate] to be used for Wharton’s general purpose.
Gift for a Specific Purpose
A charitable bequest can also be designated for a specific purpose at Wharton. It is best to have both the designation and the language approved by Wharton to avoid any potential difficulties in the execution of the will, and to ensure the School meets your gift intention.
I give to The Trustees of the University of Pennsylvania, a non-profit 501(c)(3) corporation, located in Philadelphia, Pennsylvania, organized and existing under the laws of the Commonwealth of Pennsylvania, the sum of $_______ [or ______% of the rest, residue and remainder of my estate] to be used for [state purpose].
Benefits of a Bequest
- Enables you to make a significant contribution that may otherwise not have been possible during your lifetime
- Removes assets from your taxable estate
- When set up as a percentage of the estate, allows for changes in the value of your assets
WHERE THERE’S A WILL, THERE’S A WAY
Alexander Strauss, W’ 55 has fond memories of his days as a Wharton student and has continued his relationship with Wharton over the years. He frequently comes back to campus to attend events and has season tickets for football and basketball. While he does not consider himself wealthy, he does recognize that taxes will take a considerable toll on his estate. Having received financial assistance from Wharton as a student, he wishes to give something back but is not yet sure about making a long-term commitment during his lifetime. Instead, he has simply included Wharton in his will and has designated that his bequest be used for scholarship support.
Charitable Gift Annuity
Charitable Gift Annuity
The simplest life income gift arrangement, the Charitable Gift Annuity is a contract between Wharton and the donor, providing for payments to one or two beneficiaries at a fixed rate. In exchange for a gift of $10,000 or more, the University will provide an attractive annuity rate and guaranteed payments for life. The donor may contribute cash or appreciated assets, such as real estate or securities to establish a gift annuity. The donor is eligible for a charitable income tax deduction in the year that the gift is made. A Charitable Gift Annuity also allows for potential tax advantages, such as a reduction in estate and capital gains taxes.
Benefits of a Charitable Gift Annuity
- Supplement retirement income
- Guaranteed payments backed by the assets of the University
- Partially tax-free income
- Capital gains tax savings on appreciated property
- A current income tax deduction
INCREASE YOUR INCOME AT RETIREMENT
Judith Nelson, W’48 is retired and in her mid-eighties. Through saving and a conservative lifestyle, she lives comfortably and is able to do the things she loves, like travel. After meeting with a Gift Planning professional, she learns the benefits of a CGA and how she can make a gift and receive lifetime payments. She decides to make the gift and fund it with stock that she bought long ago. Miss Nelson establishes a $25,000 charitable gift annuity funded with 10% cost basis. She is entitled to an income tax deduction of over $13,700. She will receive an annuity payment of $2,025 per year for life. In addition, a portion of her CGA is free of income taxes and a majority of her capital gain is spread over her life expectancy. Most importantly, the remainder of her CGA will support The Campaign for Wharton.
The Impact Annuity
The Impact Annuity
The Penn Impact Annuity provides a way for your gift to have an immediate impact. Like a Charitable Gift Annuity, this unique giving vehicle provides guaranteed payments to you or a loved one. In exchange for a gift of $25,000 or more, the University will provide guaranteed lifetime annuity payments at an attractive rate. The donor designates one of Wharton’s priorities to receive the first three years of payments. Thereafter, you enjoy the advantage of the annuity payments. The Impact Annuity also allows for a greater immediate charitable income tax deduction, given that the first three years of gift payments are included in the current charitable deduction. On termination of the annuity, the balance again supports Wharton.
Penn Donor Advised Fund
Penn Donor Advised Fund
The Penn Donor Advised Fund (Penn DAF) is a way to support the University and other charities in an efficient and satisfying way and can be an attractive alternative to a private foundation, being both more cost-effective and tax-advantageous. The Penn DAF provides a convenient way to make a gift now, and lock in a charitable tax deduction when the gift is made, while deferring the decision of where to designate support until a later date.
A donor can establish a Penn DAF account with a gift of $50,000. Various assets can be used to fund your Penn DAF account. Cash and publicly-traded securities can easily be transferred into the account. Other assets, such as real estate or other financial instruments, may also (upon review and approval) be used to fund an account. At least 50% of the gift must be designated over time to University programs, with the remaining balance available to other charitable organizations. The donor has the option to make additional contributions of $10,000 or more whenever they wish. In return for their gift, the donor is eligible for a tax deduction for the full value in the year the gift is made, subject to IRS guidelines.
Once the Penn DAF is established, the donor may recommend charitable grants to Penn and to other charities. At least 5% of the DAF must be distributed annually. Unlimited grant recommendations can be made each quarter with a minimum distribution amount of $500 per grant. Upon termination of the DAF, the donor has the option to appoint family members to continue the fund for one additional generation.
Charitable Lead Trust
Charitable Lead Trust
The Charitable Lead Trust may be an attractive gift vehicle when your goal is to make a generous gift to The Wharton School and achieve certain income or estate tax planning objectives. A charitable lead trust holds income-producing assets for a term of years, or for the lifetime of an individual, during which time annual payments are designated to Wharton – either a fixed annuity payment, or a “unitrust” payment that varies annually based on the trust’s performance. At the end of the term, the trust assets are paid back to the donor, or to the donor’s children or grandchildren.
A “grantor” charitable lead trust reverts to the donor at the end of the term. The donor is able to take an income tax deduction when the trust is set up, but thereafter the income of the trust is included in the donor’s taxable income. This can provide a good tool for “smoothing out” income, if it is set up in the year of a spike in the donor’s income – for example, due to an unusually high bonus.
A “non-grantor” charitable lead trust reverts to other individuals, most commonly the donor’s children or grandchildren. The gift tax on the future interest to heirs is calculated and accounted for up front, and the remainder interest (including any undistributed growth) is distributed to the heirs with no additional gift or estate tax. For a variety of reasons, this type of charitable lead trust is particularly effective in a low-interest rate environment. The trust itself is subject to income tax, but may take a deduction for distributions to charity.
Benefits of a Charitable Lead Trust
- Your gift to Wharton is made “up front” so you can see your philanthropy in action
- A non-grantor CLT can provide significant gift and estate tax advantages, enabling you to make transfers to heirs at a lower tax cost
- In addition, any appreciation in the CLT is distributed to heirs without additional tax
- A grantor CLT can assist in smoothing out income if created during an unusually high-income year
A UNIQUE GIVING OPPORTUNITY
John, W’65 and Mary Porter have two grandchildren ages one and three who will be headed to college in about fifteen years. Education has always been an important priority of both John and Mary and they would like to ensure that their grandchildren have the funds available for their college education. John, having attended Wharton on scholarship would also like to build a scholarship endowment through a long-term commitment. John and Mary decide to fund a $500,000 charitable lead annuity trust which will pay Wharton $25,000 per year for fifteen years, enabling them to establish the John J. and Mary Porter Endowed Scholarship. If the trust earns a total return of 8% annually in each of the fifteen years of the trust, there could be as much as $900,000 in trust principal when the first of their grandchildren turns 18 years old.
Charitable Gifts Through Your IRA
Charitable Gifts Through Your IRA
Individuals may make a Qualified Charitable Distribution (QCD) from their IRA directly to the University. The amount of the QCD is excluded from a donor’s Adjusted Gross Income (AGI), and thus not subject to income tax; donors do not receive and income tax charitable deduction for the gift. Donors aged 72 and older may use QCDs to satisfy some or all of their Required Minimum Distributions (RMDs) up to $100,000 annually.
The sample letter can be used to send to your IRA plan provider.
Charitable Remainder Trust
Charitable Remainder Trust
A Charitable Remainder Trust allows a donor to transfer assets into a separately managed trust that will provide beneficiaries named by the donor with payments for life or for a period of years. The donor decides the payout rate of the trust in consultation with the trustees he or she selects. The minimum payout is 5%. The trustees have the responsibility to manage the assets of the trust, provide tax statements to the IRS and the beneficiaries, and issue beneficiary payments on a periodic basis. Penn currently serves as trustee of many charitable trusts and provides these services to donors and beneficiaries of those trusts.
There are two types of Charitable Remainder Trusts:
CHARITABLE REMAINDER UNITRUST
This trust pays the donor or other named beneficiaries a fixed percentage of the principal in the trust as it is valued annually. Unitrust payments are taxed to the donor based upon the type of income earned by the trust. Additional gifts can be made to a unitrust at any time.
CHARITABLE REMAINDER ANNUITY TRUST
This trust makes annual payments fixed at a specific percentage of the value of the trust when it is established. Additions to an annuity trust are not permitted.
Benefits of a Charitable Remainder Trust
- Eligible for an immediate income tax deduction for a portion of your gift to the unitrust
- Capital gains tax advantages when appreciated assets are contributed
- Designated beneficiaries receive payments for life or a term of years
- Additional gifts can be made to a unitrust at any time
- Generous support of Wharton at trust termination
A HEDGE AGAINST INFLATION
Ronald, W’66 and Dianne Hill, ages 69 and 67, have had a long relationship with Wharton. They now wish to do something to show their gratitude for all that Wharton has done for them. The Hills decide to establish a charitable remainder unitrust that will pay them 5% of the trust assets annually. They initially fund the trust with $100,000 in stock which they purchased many years ago for $30,000. The gift entitles them to an income tax deduction of almost $40,000 in the year they fund the trust. They like the idea that the trust may provide a hedge against inflation as well as the fact that they can add to the trust at any time. The Hills are pleased that the trust will pay no capital gains taxes on the sale of their stock.
The Hills have accomplished the following:
- Provided themselves with annual payments for life with the potential for growth.
- Obtained capital gains tax advantages.
- Removed assets from their taxable estate.
- Received an income tax charitable deduction.
- Following their lifetimes, an endowment in their names will be created at Wharton.
Gift Planning Calculator
- Gift Annuity: In exchange for your gift to charity, you or 1-2 other annuitants receive a fixed sum each year for life.
- Deferred Gift Annuity: In exchange for your gift to charity, you or 1-2 other annuitants receive a fixed sum each year for life starting at the date of first payout.
- Charitable Remainder Unitrust: Your unitrust pays a fixed percentage of its value, determined each year, to you or others you name for life or a term of years. The remaining assets then go to charity.
- Charitable Remainder Annuity Trust: Your trust pays a fixed dollar amount each year to you or others you name for life or a term of years. The remaining assets then go to charity.
- Pooled Income Fund: Your gift is pooled in a fund with gifts from other donors. You or others you name receive your gift’s share of the income the fund earns each year for life. Your gift’s share of the fund then goes to charity.
- Retained Life Estate: You deed your home or farm to charity, but retain the right to live in it for the rest of your life, a term of years, or a combination of the two.
- Charitable Lead Unitrust: Your unitrust pays a fixed percentage of its value, determined each year, to charity for a term of years or one or more lifetimes. The accumulated assets then go back to you or others you name.
- Charitable Lead Annuity Trust: Your trust pays a fixed dollar amount each year to charity for a term of years or one or more lifetimes. The accumulated assets then go back to you or others you name.
Ways to Give
Can’t find what you’re looking for? Contact The Wharton Fund at +1.215.898.7868 or whartonfund@wharton.upenn.edu
The University's fiscal year is July 1 - June 30. Penn's Tax ID/EIN is 23-1352685.
▼ Give Online
▼ Give by Phone
Call The Wharton Fund at +1.215.898.7868
▼ Give by Mail
▼ Gifts of Cash
Cash gifts can be made by check or charged to a credit card.
Charitable gifts of cash are deductible up to 60% of the donor’s adjusted gross income in the year of the gift with any balance carried forward up to five more years. In valuing any charitable gift for tax purposes, the donor must reduce the gift amount by the fair market value of any goods or services received from the charity.
Wharton’s Fiscal Year is July 1- June 30.
▼ Donor-Advised Funds or Private Foundations
Recommend or direct gifts through donor-advised funds or private foundations.
Penn’s Tax ID/EIN is 23-1352685
Make donations payable to “The Trustees of the University of Pennsylvania”
Designate gift to The Wharton Fund.
▼ Bank Wires
Send your gift via a bank wire to:
Wells Fargo Bank N.A.
420 Montgomery Street
San Francisco, CA 94104
Account Name: The Trustees of the University of Pennsylvania – Gifts Accounting
Account# 2000030009956
Reference: Name and Affiliation (example: Susan Lee, WG’99)
For Domestic Wires and ACH’s
ABA Routing #: 121-000-248
For International Wires Only
SWIFT CODE: WFBIUS6S
CHIPS: 0407
▼ Appreciated Securities
The transfer of stock from a donor to Wharton is a fairly simple transaction. Morgan Stanley serves as the University’s main brokerage firm. You will need to work directly with your broker to complete a transfer form and initiate a transfer of stock to the University of Pennsylvania. If you hold the certificate, it is best if those certificates remain unendorsed and you complete a separate stock power form authorizing transfer of ownership from the donor to Wharton.
▼ Charitable Gifts Through Your IRA
The Protecting Americans from Tax Hikes Act of 2015, has extended the IRA Charitable Rollover permanently. The extension allows individuals age 70½ and older to donate up to $100,000 from their IRAs to The Wharton School tax-free. You do not receive an income tax charitable deduction. This provision allows you to transfer money from your IRA directly to Wharton, without having to recognize the transfer as taxable income. You should consult with your tax advisors about your specific situations.
The sample letter can be used to send to your IRA plan provider.
▼ Matching Gifts
Don’t miss the unique opportunity to increase the impact of your giving through a matching gift program. To find out if your employer participates and learn more about how to apply a match to your Wharton Fund gift, visit Penn’s matching gifts database. Most matching gifts are made by companies employing Wharton alumni, including:
- Apple
- Deloitte
- Johnson & Johnson Corporation
- Microsoft
- PricewaterhouseCoopers
- Goldman Sachs
- Visa
- And many more
For more information concerning the Matching Gifts Program, you can call +1.215.898.5069 or contact devgifts@dev.upenn.edu.
▼ Giving from Outside U.S.
If you live outside the United States and are considering a gift to Wharton, please visit Penn’s Giving from Outside the U.S. website. If you are a taxpayer in one of the following areas, please visit our country-specific giving pages before making your gift as your contribution may qualify for tax benefits in your home country.
▼ Planned Gifts
Planned gifts can be made through bequests, unitrusts, life insurance, pooled income funds, and real estate. If you are interested in learning more about planned giving opportunities, call +1.215.898.6171 or click on the link below.
Make checks payable to: “The Trustees of the University of Pennsylvania”
Please include your name (and your spouse’s name if applicable), affiliation(s) and how to allocate your gift (ex. The Wharton Fund).
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