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Bismarck Endowment Case Statement
By giving to the Builders of Excellence Endowment Campaign, your philanthropic spirit and leadership will leave a lasting legacy on the future of health care in central and western North Dakota. The earnings from an endowment fund are paid annually, forever, to support local health care.

You can either give to an existing endowment fund within the Sanford Health Foundation or, with a gift of $10,000 or more, create your own, named endowment fund to benefit the Sanford programs and services of your choice. Funds raised in support of the campaign will provide the resources to transform the future of health care in our region to unprecedented levels through advancement in medical science and quality of care.

Sanford Health will double your gift

 

By giving to the Builders of Excellence Endowment Campaign, you can double your investment in local health care. Sanford Health is matching dollar for dollar all contributions and pledges received up to $10 million. The goal with the matching funds is to raise $20 million in endowment funds to benefit health care in central and western North Dakota for generations to come.

What is an endowment?

A qualified endowment is defined as an "irrevocable fund held by a North Dakota incorporated or established organization that is a qualified non-profit organization; or a bank or trust company holding the fund on behalf of a qualified non-profit organization." An endowment is a fund held by a tax-exempt organization where the principal of the fund is not expendable. Only the interest and appreciation earned in an endowment fund can be used for current operations.

North Dakota promotes philanthropy with income tax credits

 

The North Dakota legislature recently added charitable income tax credit for taxpayers to use when making gifts to North Dakota charitable endowments. The state is a national leader in providing these incentives for donors. Fewer than six states offer tax credits. Itís valuable for those paying North Dakota income taxes to know about these unique tax benefits.

Endowed gifts and planned gifts are appreciated and encouraged at the Sanford Health Foundation in Bismarck. Both are perfect examples of thoughtful, purposeful philanthropy as donors provide permanent funding support for local health care.

The new tax credit, introduced in 2011, is for individual taxpayers. This tax credit makes it possible for North Dakota supporters of Sanford Health to establish permanent endowments which will support health care in North Dakota forever; endowments they might not have otherwise established without this tax credit. (See cost analysis below.) A minimum gift of $5,000 annually is required to qualify. The donor then benefits from a 40 percent income tax credit with a maximum credit of $10,000 per person, $20,000 for a married couple with any excess unused credit to carry forward three years.

We encourage donors to seek tax and legal advice from their professional advisors. We provide this as a hypothetical endowment example. For a taxpayer in the 28 percent federal tax bracket, the tax benefit of a charitable endowment tax credit in North Dakota could be as follows:

Gift amount $5,000 $10,000 $25,000 $50,000
Federal tax deduction –$1,400 –$2,800 –$7,000 –$14,000
ND state income tax credit –$2,000 –$4,000 –$10,000 –$20,000
Net cost $1,600 $3,200 $8,000 $16,000

Business and financial institution tax credit

Businesses and financial institutions (C corporations, S corporations, estates, limited liability companies and trusts) making gifts to qualified endowments may also qualify for a state income tax credit, which amounts to 40 percent of the value of the gift, with a maximum credit of $10,000 per year. Businesses may carry forward any unused credit for up to three taxable years (financial institutions excluded).

Planned gifts by individuals

Individual taxpayers are allowed to claim up to a $10,000 credit and joint tax filers up to a $20,000 credit for planned gifts made to qualifying North Dakota nonprofit organizations such as the Sanford Health Foundation. Similar to the endowment credit, the amount of the credit is computed at 40 percent of the federal deduction created by the gift. The credit may be claimed in the year of the gift, plus a carry-forward period of three years. Eligible planned gifts include: various types of charitable trusts, current and deferred charitable gift annuities, certain paid-up life insurance policies, pooled income fund trusts, and charitable life estate agreements.

Endowment Fund: Frequently asked questions

 

Q. What does it cost to fund an endowment?
A. When establishing a new endowment, the minimum amount required for it to be fully funded is $10,000. This commitment may be pledged provided the minimum amount of $10,000 is paid in full over a five-year period. A corporate or business endowment requires a $25,000 commitment which can also be pledged and then paid over a five-year period. However, larger amounts may be required to fully accomplish a donorís objective for the fund.

Q. Can I stipulate a specific purpose for my endowment?
A. Yes, as long as it fits within the overall purpose and mission of Sanford Health. Most endowments are designed to provide funding for a specific department or program related to patient care or research in the Bismarck region of Sanford Health. Some endowments are designed to provide scholarships for students who want to enter the medical field. There is great flexibility in designing an endowment.

Q. Can I customize the name of my endowment?
A. Yes, you can name an endowment after yourself, a spouse, a beloved relative, your family, a business or an organization.

Q. How can an endowment be funded?
A. Gifts of cash and publicly traded securities are ideal assets for funding an endowment. Real estate, life insurance, tangible personal property and other similar assets may also be given provided they meet the requirements of the Foundationís Gift Acceptance Policy.

Q. Can I also fund an endowment through my estate or with a planned gift?
A. Yes, many endowments are funded through bequests, life insurance or charitable trusts. Sanford Health Foundation can be named in your will or planned gift as a beneficiary to fund an endowment. We encourage you to discuss your estate planning and endowment interests with a Sanford Health Foundation gift planning specialist.

Q. Are distributions made from my fund soon after it is established and fully funded? How much is distributed? Does the Foundation charge an administrative fee?
A. According to the Foundationís current spending policy, 4.5 percent of the fundís value is available for distribution annually once the fund reaches the minimum amount. The distribution amount is determined by using an annual rolling five-year average of the market value of all assets in the fund on the last day of each calendar year. This reduces the fluctuation in grant distributions from year to year. The Foundation does not charge administrative fees.

Q. Why doesnít the Foundation distribute more?
A. The true value of an endowed fund is not just the benefit it can do today. The real power of endowment is in the long-term growth of the fund over time. Contributions you make today will grow and multiply over the years, benefiting many generations. As the principal balance of your fund continues to grow, the earnings from that fund are spent each year to benefit patient care and research at Sanford Health as you have directed in your endowment.

Contact information

If you are interested in making a significant impact on the lives of others by giving to the Builders of Excellence Campaign, contact the Sanford Health Foundation in Bismarck at (701) 323-8450, foundation@sanfordhealth.org or visit our office which is located in the Seventh & Broadway Clinic, 715 E. Broadway Ave., Bismarck.

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