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Tools for Giving

Frequently Asked Questions

What is the Foundation?

Founded in 1960, LFOT was established to be the planned giving ministry serving individuals and congregations in the Texas District-LCMS. Our mission is to educate members and churches about stewardship of accumulated resources, facilitate opportunities for planned gifts that will benefit Lutheran churches and ministries, and manage funds that have been donated to benefit individuals and ministries. The Foundation operates as a charitable, non-profit, tax exempt ministry to help people give to loved ones and Lutheran ministries.

In 2004, the Foundation distributed more than $1.5 million to congregations, ministries and individuals who have established charitable life income plans to benefit God's kingdom. Current assets under management exceed $30 million.

Why should I make a planned gift?

For individual church members, planned giving offers a wide variety of benefits to them and their families as they seek to achieve their charitable and financial goals. Benefits can include: personal satisfaction in the continued proclamation of Jesus Christ through the specific causes you choose; income tax savings; avoidance of capital gain tax or federal estate tax; opportunity to provide income for yourself, spouse, family or friend with tax benefits to you; reduction in the administrative costs of settling your estate. (For more information, see Planned Giving - In General.)

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How can I make a gift?

LFOT has various ways that individuals can make a gift. While direct gifts of cash are always accepted, it may be more desirable to fund a planned gift with other types of assets. Donation of real estate or appreciated securities, can, in many cases, allow you to avoid or lessen capital gain tax. Life insurance policies also make excellent gifts. IRAs and other qualified retirement plans that require income tax to be paid at withdrawal can be used as a gift at time of death and allow children to avoid the immediate income tax that otherwise would be due upon the receipt of the IRA. Gifts also can be made to create a permanent individual or family endowment fund through the Foundation. The donor chooses the church or ministry to benefit from annual distributions. Endowment funds can be established during one's lifetime, as well as at death through a bequest. (For more information on creating an endowment, see Individual/Family Endowments.)

Gifts also can produce an income. The simplest and oldest form is the Charitable Gift Annuity. With this gift, a liquid asset, such as cash or stocks, is transferred to LFOT. The Foundation contractually guarantees to pay a specific dollar amount annually (that is, in the form of an annuity) to the donor and/or another beneficiary for life. The suggested rates range from 5.0% to 11.3% with the payout rate determined by the age or ages of the beneficiaries. At the death of the last beneficiary, the residual can go to benefit one of the following Lutheran ministries:

In establishing a gift annuity, the donor receives a charitable deduction for income tax purposes, based on U.S. Government Treasury Tables. A portion of your annual annuity payment from the Foundation also is free of tax throughout your life expectancy. There are also many other types of planned giving programs available. A Charitable Remainder Trust for example, would provide income, tax advantages and the opportunity to contribute to many different ministries including your own congregation. Our staff welcomes the opportunity to explore the possibilities with you.

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Can I make a planned gift to more than just one ministry?

Yes. Very often, individuals will name more than one ministry as the beneficiary of a charitable trust, annuity, or endowment they have established with LFOT. In most instances, a charity other than a Lutheran ministry can also be supported when an endowment or other planned gift is put in place where a minimum of 25% of the charitable distributions are designated for LCMS ministries. For example, an individual may wish to establish an endowment that will equally benefit his/her Lutheran church, day school, and the college from which he/she graduated. LFOT can create an endowment that will benefit all charitable organizations and thereby allow him/her to accomplish his/her stewardship goals.

I own some real estate that I no longer want. How can I give that to the church?

Contact LFOT at 1-800-880-3733 or via e-mail at johnh@lfot.org and we will provide you with the detailed information you need to give a gift of real estate. While many parcels of property can make an excellent gift, the Foundation considers real estate issues on a case-by-case basis. (For general information on the benefits of making this type of gift, see Real Estate-Gifts.)

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Why do I need a will? Should the church be included?

Seven out of ten people die without a will, leaving important decisions about distribution of property and guardianship of children to the court system. Establishing a will can provide benefits for those family members and favorite charities that otherwise would not receive benefits. A will also lets you determine who will be guardian of any minor children and who will administer your estate. By including your church or a loved Lutheran ministry in your will or estate plan, you also have an opportunity to make a lasting testament to the ongoing ministry of Jesus Christ. A charitable gift by bequest can also reduce the amount of federal taxes assessed to your estate.(See Wills and Estate Planning for more information).

Our church has just received a bequest. What do we do now?

Contact LFOT at 1-800-880-3733 or via e-mail at johnh@lfot.org for assistance. The Foundation can manage the investment of the gift through a "Church Fund Management Account," thereby eliminating any concerns the congregation may have about conflicts of interest or how to invest the gift. (See Cash Management Services.) If your congregation would like to preserve some or all of the funds received in perpetuity so that only the interest or growth are spent for specific areas of ministry, the Foundation can also help you establish a permanent endowment fund. (See Church/School Endowments.)

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Why should my congregation invest with the Foundation?

The Foundation's investment policy seeks to add value to the investment over time and maintain a steady stream of funding for the ministries of the church. In other words, the Foundation works to retain and add to the principal of the investment, and fund current ministries of the church. Funds invested with the Foundation are generally pooled together, giving managers a significant source of money with which to work.

How are funds invested?

The Foundation manages several funds invested on behalf of individual and ministry donors. Each fund has stated investment goals and objectives and is separately accounted for and segregated. Each fund contains a different ratio and diversification of assets as determined by the objective of that fund. LFOT funds are monitored by the Foundation's Investment Committee that meets quarterly. LFOT has also invested donated funds in alternative entities, such as the Texas District Church Extension Fund or Thrivent Financial for Lutherans at the suggestion of individual contributors. Additional information about LFOT funds and a report on their returns are available by contacting the Foundation office.

Do you offer speakers?

LFOT's planned giving officers welcome the opportunity to speak to your church or ministry. There is no charge for them to speak. (For more information on programs that are offered, see Wills, Estate and Gift Planning Seminars.) The staff also works confidentially one-on-one with potential donors. LFOT's planned giving officers, however, are NOT financial advisors or tax lawyers. They can show you how a planned gift can benefit your congregation or a favorite ministry, but they always recommend you consult with your own financial and legal experts.

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Please contact us for more information.