Alternative Giving Methods

There are many different ways to help the Cato Institute in its fight to promote individual liberty, free markets, and limited government, ranging from a simple cash gift to a gift of real or personal property to naming Cato as a beneficiary in your will or life insurance plan to more complicated estate planing devices. Some of these variations are discussed in more detail below.

Please remember that the Cato Institute is not in a position to offer legal or financial advice. When considering the tax or other effects of a gift to Cato, please consider consulting your own attorney or financial advisor.

However, the Cato Institute is happy to assist you in any way it can. To request a copy of Cato's Planned Giving Program 2000, or for any questions about donating to the Cato Institute, please contact:

M. Christine Klein
Director of Sponsor Relations
Cato Institute
1000 Massachusetts Avenue, N.W.
Washington, DC 20001
(202) 218-4620
fax (202) 842-3490
cklein@cato.org

1. Matching Gifts
2. Gifts of Appreciated Stock
3. Remembering Cato In Your Will
4. Charitable Gift Annuity
5. Charitable Remainder Trust
6. Charitable Lead Trust

Matching Gifts

Keep in mind that many employers will match your gift dollar-for-dollar (or more), providing additional support for the Cato Institute. Often, these programs are also extended to retirees. Please check to see if you qualify for a matching gift program.

Gifts of Appreciated Stock

If you have owned stock for more than one year, and it has appreciated in value, you will be able to use the current value of the stock as your charitable deduction. (If you sell appreciated stock, rather than donating it, you will be required to capital gains tax on the appreciated value. Donating the stock to the Cato Institute will let you avoid that result.)

A gift of stock is easily accomplished through an electronic transfer. Simply request your broker to transfer shares directly to the Cato Institute account at:

Charles Schwab & Co.
1701 Pennsylvania Avenue, N.W.
Washington, DC 20006
1-800-435-4000

Account No. 2170-8366
DTC No. 0164, Code 40

You or your broker should inform Cato by fax (202-842-3490) when the transfer has taken place. This step is very important so that Cato will know to whom the gift of stock should be credited.

Remembering Cato In Your Will

A simple, commonly used method to ensure Cato's legacy is naming the Cato Institute as a beneficiary in your will. You can do this in one of three ways:

First, you can leave Cato a specific amount of cash or specific property.

Example: "I give the sum of $100,000 to the Cato Institute" or "I give 500 shares of XYZ Corporation stock to the Cato Institute.

Second, you can leave Cato a fixed percentage of your estate.

Example: "I give 30 percent of the residue of my estate to the Cato Institute."

Third, you can leave Cato all or part of the residue of the estate after bequests to other beneficiaries have been made.

Example: "I give the residue of my real and personal estate to the Cato Institute."

Remember that the estate tax charitable deduction is unlimited.

Alternatively, you may consider naming Cato as a beneficiary in your living trust, life insurance or pension plan, and the like.

Charitable Gift Annuity

You can transfer cash or marketable securities to the Cato Institute, and in return, Cato will issue an annuity contract which will pay you or your designated beneficiary a guaranteed annuity for life. This transfer is part gift and part purchase of an annuity.

The annuity rate depends on your or your beneficiary's age, and the type of annuity you choose.

With a present gift annuity, annuity payments begin immediately.

With a deferred gift annuity, annuity payments are deferred to some future date.

With either type of annuity, at your or your beneficiary's death, Cato retains the remaining principal.

A charitable gift annuity can beneft you in several ways. You will receive a guaranteed income stream for life (or a specified term of years), and an immediate income tax charitable deduction for the gift portion of the transfer. If you establish the gift annuity with appreciated securities, you can defer your capital gains tax.

Finally, you can accomplish two important goals at once: Providing for your or your beneficiary's future needs while at the same time helping Cato promote its goals of individual liberty and civil society.

Example: The deferred gift annuity may be used to fund a college plan for a young child or grandchild, with income payments going to the child during his or her college years. After the child's education is completed, the remaining principal will go to fund Cato's important work.

Note that certain age and minimum donation restrictions apply.

Charitable Remainder Trust

This device allows you to transfer property irrevocably to a trust, which then pays you or your designated beneficiary a set annuity or percentage of the trust assets for life or for a term of years up to twenty years.

When the trust terminates, the remaining assets pass to the Cato Institute.

There are two ways to structure the remainder trust.

With a unitrust, your annual payment varies each year, and is determined by multiplying a fixed percentage (at least 5%) set at the establishment of the trust by the fair market value of the trust's assets in a given year.

With an annuity trust, your annual payment is a fixed percentage (at least 5%) of the initial trust principal, and thus unlike the unitrust, does not vary from year-to-year with the subsequent actual value of the trust.

The charitable remainder trust allows you to make an irrevocable commitment to contribute a significant sum to assist Cato with its important work, while retaining a payment stream for you or your beneficiary for a period of time or life. You will receive a current federal income tax charitable deduction for the value of Cato's remainder interest in the trust. Depending on your personal financial situation, there are many other tax and estate benefits as well.

Note that certain age and minimum donation restrictions apply.

Charitable Lead Trust

The charitable lead trust is the mirror image of a charitable remainder trust. You fund an irrevocable trust which then pays a certain percentage to the Cato Institute for a specified period of time. After that time, the principal is paid to a remainder beneficiary-typically, children, grandchildren, or other family members.

With a charitable lead trust, you can pass an income-producing and potentially appreciating asset to your heirs while also helping Cato advance civil society. The value of the assets placed in the trust are frozen for gift- and estate-tax purposes on the date of transfer, meaning that any future appreciation of the assets is free of gift and estate taxes.

In addition, a charitable gift-tax deduction is earned for the actuarial value of income paid to Cato during the term of the trust. The greater the amount paid to Cato, and the longer the term, the greater the deduction. Depending on your personal financial situation, there are many other tax and estate benefits as well.

Note that certain age and minimum donation restrictions apply.

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