Ways to give to Friends of Fettes College Inc.

These pages give detailed information on ways that American tax-payers may wish to give to the school via FFC Inc.

• Gifts of tangible personal property

• Gifts of securities

• Matching gifts

• IRA's and pension vehicles

• Planned gifts

• Charitable Remainder Trusts

• Charitable Lead Trusts

• Bequests

• Gifts of Real Estate

• Guidelines for gifts

FEDERAL IDENTIFICATION NUMBER 04-3410156

Outright Gifts

Gifts of securities are a particularly advantageous way of giving to Fettes College. If you own stocks and bonds, it is easy to transfer their ownership, and there are definite tax advantages in giving securities which have appreciated in value and which qualify as long-term capital gain property.

If you give appreciated securities to FFC, Inc., there are two benefits. First, you avoid paying capital gains taxes on the amount of the appreciation. Second, you can still deduct the full amount of the current value of the stock as a charitable income tax donation -up to 30% of your annual adjusted gross income, with a carryover of the deduction for five additional years.

If you choose to make a cash gift you are entitled to a charitable income tax deduction for the entire amount, subject only to the giving limits of your annual income.

For example, if you give a gift of $1,000, then $1,000 is deductible.

If you give a gift of $10,000, then $10,000 is deductible.

If you exceed your giving limit - up to 50% of your annual adjusted gross income - you may carry forward and deduct the excess contribution for five additional years until it has been fully deducted. Gifts to Friends of Fettes College Inc. may be pledged over a five-year period.

To make a cash gift, write a check payable to Friends of Fettes College, Inc. and mail it to:

Arthur B. Page, Friends of Fettes College, Inc., Palmer and Dodge LLP

Arthur B. Page, Esq., Palmer and Dodge LLP. 111 Huntington Avenue at Prudential Center, Boston, MA 02199-7613

Gifts of tangible personal property

Sometimes donors wish to give to the school tangible personal property such as works of art, valuable collections, antique furniture, stamps, books or coins.. FFC Inc. welcomes inquiries about such gifts of property. Some of these gifts may be used by the donor to fund a life income trust. Others may be intended for use by the College.

The FFC’s Trustees review gifts of tangible personal property before acceptance by FFC, Inc.. All gifts-in-kind should be accompanied by a professional letter of appraisal and by a letter from the donor stating that FFC, Inc. has the right to dispose of the gift in the future.

A prospective donor of tangible property should consult with Arthur Page before making arrangements to transfer the item.

Often certain tax regulations and implications can be explained which will be of value to the donor.

Matching Gifts

Many corporations and businesses now have programs to match employee gifts of cash or stocks either in whole or in part. In some cases, gifts from spouses, directors and retired employees will be matched. We urge you to explore this possibility and to forward your company's matching gift form with your own contribution.

Gifts of Securities

Gifts of securities are a particularly advantageous way of giving to Fettes College. If you own stocks and bonds, it is easy to transfer their ownership, and there are definite tax advantages in giving securities which have appreciated in value and which qualify as long-term capital gain property.

If you give appreciated securities to FFC, Inc., there are two benefits. First, you avoid paying capital gains taxes on the amount of the appreciation. Second, you can still deduct the full amount of the current value of the stock as a charitable income tax donation - up to 30% of your annual adjusted gross income, with a carryover of the deduction for five additional years.

When securities are used to fund your gift to FFC, Inc., please call Arthur Page.

If the stock is being held in your brokerage account, the stock may be easily transferred electronically to FFC, Inc.'s own brokerage account.

If you wish to send the stock certificates themselves, the unendorsed stock certificates should be sent by registered mail in one envelope. A signed stock power (which can be obtained from your bank or broker) for each certificate should be endorsed in blank without FFC, Inc.'s name on it and sent under separate cover with a letter indicating the donor's name, address and intention.

If you wish to donate securities which have decreased in value, these should be sold by you and the proceeds donated to FFC, Inc.. In this way you may take advantage of a capital loss in addition to the charitable income tax gift deduction when you prepare your income tax returns.

Gifts by corporations and other businesses

If you are an owner or partner of a closely held corporation, you may wish to make a gift of cash or securities to FFC, Inc. through that business. A corporation is entitled to take a charitable deduction of up to ten percent of its taxable income. Any contributions above that amount may be carried forward for up to five years. As a partner, you would be entitled to a similar deduction.

If your principal asset consists of a large block of non-marketable stock in a closely-held corporation, you may be pleased to learn that such stock can be used to make a gift to FFC, Inc. which it is eager to accept. It is now possible to make a gift of closely held stock followed by a redemption as long as the closely-held corporation is under no obligation to redeem. This allows a donor to convert, in effect, the shares in the closely held corporation into the same amount of after-tax money (the tax savings resulting from the deduction) as the donor would receive from a dividend received from the corporation.

IRA’s and pension vehicles

You can use your profit-sharing, pension, IRA and other deferred benefit plans to make a gift.

Financial planners are increasingly calling attention to problems inherent in leaving your deferred benefit funds solely to your family in the belief that they will inherit the amounts you have saved and preserved. Instead, the amounts accumulated in these accounts may be subject to confiscatory taxes when the account owner dies. The plan dollars are subject to three different taxes-- estate, income and excise--that in some cases can take over 90% of the account balance at the participant's death. Designating your spouse as the beneficiary may only defer the taxes until the spouse's death.

  If you are the owner of a deferred benefit plan, you may wish to consider designating FFC, Inc. ultimately to receive the account balances or a portion of the account balances. This would result in a gift to FFC, Inc., which would receive up to 100% of the account balances. To provide for your family as well, in some cases, you may wish to integrate a Charitable Remainder Trust (see below) into the plan as a beneficiary so as to provide a lifetime benefit to a family member before the funds go to FFC, Inc.

Planned Gifts

You may want to make a substantial gift to the Institute in the form of appreciated securities or cash, but perhaps you are hesitant to give up the steady income which you are receiving. If so, you may choose to consider participating in one of our life income plans. Investing in a life income gift often provides a significant increase in annual income when compared to the income earned in a savings account or from current dividends. Planned gifts include annuities, trusts, and donations to the Institute's Pooled Income Fund.

The advantages of many types of planned giving are:

~ You receive an income for life

~ Your funds receive professional management while you relieve yourself of investment management responsibilities

~You reap the benefits of charitable contribution income tax deduction

~ You eliminate the tax on long-term capital gains if the gift is in the form of securities or property which have increased in value

~ You have an opportunity to provide a lifetime income for a family member or friend

~ You may provide a named or memorial gift to Fettes which would not be possible with a smaller outright gift

~You may increase your income if a gift of low-yielding securities or savings is made to a trust or pooled income fund

FFC's legal counsel is available to work with a prospective donor and the donor's legal or financial advisors to help make planned giving arrangements.

Charitable Remainder Trust

Certain gift plans enable you to receive income for life, the principal being assigned to FFC, Inc.. A trust arrangement may be of particular interest to you if you would like to make a substantial gift to FFC, Inc. but wish to retain maximum income for your lifetime or that of another beneficiary.

Perhaps you have some stock which you bought many years ago which has increased greatly in value. Or perhaps you own a vacation lot, a house, or other real estate which is not producing income. You wish you could increase your income and make a major gift to Fettes.

Real estate that does not now produce income for you or low-yielding but appreciated securities on which you would like to avoid a capital gains tax are two assets that can produce income for you and a gift for FFC, Inc. if you use either to fund a Charitable Remainder Trust at FFC, Inc..

Each trust is managed by FFC, Inc. or by an independent trustee chosen by you. It combines the advantages of creating income for you (or your beneficiary) with a charitable income tax deduction in the year in which the gift is made. A minimum of $50,000 is needed to establish a Charitable Remainder Trust managed by FFC, Inc.

It is possible to fund a Charitable Remainder Trust with tax-exempt securities that pay tax-exempt income to the beneficiary--an attractive feature to donors in a high tax bracket. There are two types of remainder trust that qualify for a charitable deduction:

A Charitable Remainder Unitrust pays you or a beneficiary you designate a pre- determined percentage of the fair market value of the trust assets (but not less than 5%) as revalued annually. An increasing number of people are using the unitrust for charitable giving because it offers important protection against inflation. As the assets in the trust increase in value, so does your income. Additional contributions may be added to a unitrust.

A Charitable Remainder Annuity Trust pays the beneficiary a fixed, guaranteed dollar amount for the life of the trust regardless of the trust's investment performance. The dollar amount is determined by calculating a percentage (not less than 5%) of the trust's assets at the time the trust is funded. Although no additional contributions may be made to an annuity trust, you may establish more than one of them.  

Example: Using appreciated securities or real estate to fund a gift to FFC, Inc. is both convenient and easy to do. Consider the case of "Mrs. Brown," age 72. She wanted to make a gift to endow a scholarship in memory of her husband, Professor Brown. She knew however, that she did not have the ready cash to do so. However, she did have a piece of land, worth $500,000, which had increased in value and which she no longer wanted or needed. Mrs. Brown learned that she could use the land to fund a Charitable Remainder Unitrust paying her 7% of the value of the trust assets each year for the remainder of her life. The Unitrust would avoid a capital gains tax for Mrs. Brown, provide her with a charitable income tax deduction, and annual income. Ultimately the Unitrust would be used to endow a scholarship in memory of Professor and Mrs. Brown. The value of the land would be eliminated from her estate for federal estate tax purposes.

 Charitable Lead Trust

A charitable lead trust provides an advantageous method of transferring assets for your heirs, greatly reducing gift and estate taxes while making a substantial contribution to Fettes now. The Tax Reform Act of 1986 strengthens the reach of the generation-skipping transfer tax on individuals attempting to pass on assets to their grandchildren. The lead trust remains one of the very few advantageous ways to shelter property--and any future appreciation--from the generation-skipping transfer tax, and thus provide for your grandchildren.

A charitable lead trust differs from other trusts in that an annual income is paid to Fettes College now, for a specific number of years. Under such a trust, cash or securities are transferred irrevocably to a trustee, usually for a period of years. The trustee makes investments and an annual fixed percentage is paid to Fettes for the term of the trust. Since the money is no longer in your possession, income from the trust normally is excluded from your gross income and is not taxable to you.

At the end of the term of years, the principal is transferred to your grandchildren. Any increase in the value of the trust is free of gift and estate taxes. As a   result, it is frequently possible to pass on to your grandchildren a larger estate than would have been possible otherwise. Furthermore, the gift tax due the year the trust is created is reduced by a deduction equal to the present value of the income stream to Fettes.

A minimum gift of $100,000 is needed to establish a lead trust.

Example: There are many ways a gift to Fettes College can benefit you and your children or grandchildren as well. "Mr. and Mrs. Jardine "found a way to do just that. They owned a large black of valuable securities and, at the same time, they became interested in funding an endowed scholarship in their name at Fettes. However, they also wanted to leave a substantial estate for their grandchildren. By using a charitable lead trust, the Jardines were able to do both. They have set aside $4,000,000 of their securities for fifteen years, during which time Fettes would receive an income from those securities. Al the end of the fifteen years, the trust would be distributed to the Jardine's grandchildren free of estate taxes. Income earned above the 4 percent payout rate would increase the amount of the trust passed to the Jardine 's grandchildren free of income and estate taxes. The Jardine's will pay a gift tax at the time the trust is created, but it will be far less than the tax that would be paid if the stock were left to the Jardine 's grandchildren by will.

BEQUESTS

Bequests can play an important role in supporting Fettes College. For some donors a bequest--a gift made through a will--is the most realistic way of making a substantial contribution to FFC, Inc.. We invite you to consider FFC, Inc. in your estate plans. Your bequest may enable you to make a substantial gift to FFC, Inc., and may be used for a purpose of special interest to you.

Your bequest to FFC, Inc. is a way for you to associate your name or the name of your family with FFC, Inc. permanently. No bequest is too small.

All sizes are welcome. They may be of various types: cash, securities, property, or works of art. An unrestricted bequest enables FFC, Inc. to direct your gift where it will have the greatest impact. But if you wish to fund a specific area or interest, a restricted bequest is possible. You may devote your bequest to the School, to Faculty salaries, to endow scholarships, for libraries, buildings, or to maintain facilities. If your will provides a restricted bequest, however, it is important that the bequest be described as broadly as possible and that it include a clause to allow for other uses under changed conditions in the future.

How to make a bequest to Fettes

A bequest can easily be established by having your attorney write an amendment to your present will. For an unrestricted bequest the following wording is suggested:

"I give and bequeath to the Trustees of FFC, Inc., a non- profit corporation in Boston, Massachusetts, the sum of _ Dollars $ _ (or the property described below) for such purposes as the Trustees of FFC, Inc. shall determine to be in the best interests of Fettes College."

If you wish to make a restricted bequest, we strongly urge you to add the following wording as one of the terms of the gift in your will: "If at some future time, in the judgement of a majority of the Trustees of FFC, Inc., the income or principal of the fund established by this bequest can no longer be utilised to the best advantage of Fettes College for the purposes or in the manner specified, then the income or principal, or both, may be used for such related purpose and in such other manner as the Trustees may deem appropriate that will most nearly accomplish my wishes."

If you are writing a will or wish to make a restricted bequest, Arthur Page can assist you or your attorney with specific language to accord with your wishes.

BEQUESTS MAY BE MADE IN SEVERAL FORMS, INCLUDING:

·Specific Bequests: Fettes College would receive a specific dollar amount or percentage of the estate.

·Residuary Bequests: Fettes College would receive all or a percentage of your estate after all other specific legacies and expenses had been provided for.

.Contingent Bequests: Fettes College would receive a part or all of your estate only if the other beneficiaries do not survive you.

·Trust Established Under A Will

: You provide for an income to be paid from the trust to one or more individuals upon whose death(s) all or part of the principal passes to FFC, Inc. in a form which would insure your estate a deduction for estate tax purposes. If you are writing a will or wish to make a restricted bequest, Arthur Page can assist you or your attorney with specific language to accord with your wishes.

Gifts of Real Estate

You can make a gift of real estate to Fettes and receive substantial financial benefits. In some cases you may wish to give the property outright to support the purposes of Fettes and qualify for an income tax deduction on the fair market value of the property. In other cases you may use a home or land you no longer want or need to fund a life income arrangement.

If you are contemplating leaving your home to Fettes through your will, you may wish to consider giving it now but retaining the right to live in it for your lifetime and that of a second beneficiary if you wish. You will continue to pay taxes, insurance, and maintenance costs. But, by giving now, you receive a substantial charitable income tax deduction in the year the gift is made and may carry any excess deduction over for five more years.

Gifts of real estate are important to Fettes. Donors may choose to make a partial gift of a house through a bargain sale. In those instances the donors chose to sell the house to FFC, Inc. at a greatly reduced cost, thus making it possible for Fettes to buy the house and ensuring a substantial charitable income tax deduction for the donors.

Guidelines for Gifts

These guidelines deal only with acceptance and credit of gifts for FFC, Inc. internal purposes.

Your own benefit for tax purposes may differ as to timing and as to the value or extent of a gift. You should discuss any major gift with your tax advisor. FFC Inc. is on a July 1 to June 30?? fiscal year and gifts will be credited for FFC Inc. purposes in the fiscal year in which received. You will generally receive credit in the calendar year in which the gift was made.

I. Gifts that do not require acceptance by Friends of Fettes College, Inc:

Cash items. Note: Corporate matching gifts will be credited to the individual obtaining the matching funds in Friends of Fettes College, Inc. fiscal year in which those funds are received.

Marketable securities given for general or unrestricted purposes will be credited at full value on the day the gift is received (generally the mean value on the day securities pass from your control).

II. Gifts that should be reviewed with Friends of Fettes College, Inc. before being made:

Gifts of real or tangible personal property will generally be valued as determined by reliable appraisal.

Gifts restricted as to marketability (such as privately owned or restricted stock) or as to the purpose for which they may be used will be valued depending on the nature of such restrictions.

Planned gifts will be credited as follows:

A. Life Income Gifts: Irrevocable unitrusts and annuity trusts will be credited at 100% of market value on the date of gift with life beneficiaries 50 years of age or older. For beneficiaries under 50, the actuarial value of the income interest will be used.

B. Lead Trusts: In the year the trust is funded, credit will be given for the estimated value of the income interest to be paid Friends of Fettes College, Inc. for the term of the trust transferred to Friends of Fettes College, Inc. as owner and beneficiary.

C. Life Insurance: Credit will be given for the cash surrender value and for premiums paid after the date of the gift if the policy is irrevocably transferred to FFC, Inc. as owner and beneficiary.

D. Life Tenancy Gifts of Real Estate: Credit will be given for 100% of appraised value.

Bequests: Friends of Fettes College, Inc. would be grateful if it were told when it is named as a beneficiary or as an alternate beneficiary in a will, trust, IRA, 401K or other deferred retirement plan so that proper recognition may be given.

Pledging Policies: Capital gifts (as differentiated from annual gifts) may be committed on a pledge basis. The basic pledge period will be: for major gifts ($50,000 and above) up to three years, and for all others, one year. Donors of exceptionally large or complicated commitments may work out individual arrangements with the guidance of Arthur Page and Friends of Fettes College, Inc.'s Trustees.

FEDERAL IDENTIFICATION NUMBER 04-3410156