Gifts represent funds received as voluntary contributions without any expectation, real or perceived, that goods or services will be received by the donor.

Gifts are received as unrestricted, temporarily restricted, or permanently restricted.

Unrestricted – Gifts received in this category come to the church with no donor restriction and are properly accounted for in the unrestricted general fund for use in support of the general operations of Christ the King Lutheran Church.

Temporarily Restricted – Gifts received in this category are to be used for a specific purpose specified by the donor subject to the published needs of the congregation. Temporarily restricted gifts are recognized as gift income in the specified fund when received. All expenditures of

these funds are recorded in the specified fund recognizing that the donor’s restrictions have been met. Examples of temporarily restricted gifts might be gifts received for use in a future fiscal year (timing restriction) or for a specific project (use restriction).

Permanently Restricted – Gifts received in this category are commonly referred to as Endowment funds. Per donor specification the funds are to be invested and only the investment earnings (including interest, dividends, and capital appreciation) may be expended for the purpose(s) decided upon by the Trust Fund Committee. No principal contributed to the Endowment Fund shall be spent. (See Endowment Fund Guidelines for additional information on endowment management.)

Because conditions change over time, all restricted gift instruments should contain the following contingency clause:

“If circumstances should arise in the future that make it illegal, impossible, or impractical to use the gift for the purpose specified above, then the Senior Pastor may submit a request for modification of this purpose to Christ the King Lutheran Church Council. If, in the best judgment of the Council, such modification is deemed prudent, they may authorize the use of the income from the fund for the fulfillment of objectives as near as practical to the original purpose of this fund. In the event of such modification to a named endowment, the original name will continue to be associated with the fund. This provision cannot convert a permanently restricted gift into a temporarily restricted or unrestricted gift.”

Christ the King reserves the right to refuse any gift that in any way detracts from its purpose, character, integrity, freedom, or its independence.

Christ the King must use gifts for the particular purpose designated by the donor or as set forth in any solicitation materials.

Christ the King should safeguard the donor’s privacy and other confidential information.

Christ the King follows the letter and spirit of all laws and regulations affecting or relating to charitable giving and fund-raising activities.

The donor is responsible for assigning a value to tangible property for income tax purposes in accordance with IRS guidelines. Refer to IRS Publication 526, Charitable Contributions.

If a single undesignated gift more than 3% of the current fiscal year’s undesignated offering budget is received and the amount of the gift is over and above the donor’s committed annual gift, the gift will be distributed as follows:

• If on the date of receipt, the consolidated unrestricted cash liquidity position of the General Fund is less than $150,000, a portion of the gift equal to the cash liquidity deficit will remain in the undesignated offerings account.
• The remaining gift will be designated by the Executive

For example, an undesignated gift of $200,000 was received on May 31. The unrestricted General Fund cash liquidity on May 31 was $90,318. The amount of the gift to remain in the undesignated offerings would be $59,682 ($150,000-$90,318). The remaining amount of

$140,318 would be designated by the Executive committee.

Donations in the form of US currency, credit or debit card, or automatic draft are accepted forms of payment. Checks should be made payable to Christ the King Lutheran Church and mailed or delivered to:

Christ the King Lutheran Church, ELCA
17195 Cleveland Road
South Bend, IN 46635

For gifts made by check and mailed at the calendar year-end, the postmark date is the gift date. Electronic donations can be made online at www.ctkluth.com/give.

Publicly traded securities, mutual funds, shares of stock in closely held companies, bonds, and government issues may be given to Christ the King Lutheran Church. It is Christ the King’s policy to convert securities to cash.

If securities are electronically transferred from a donor’s brokerage account to Christ the King’s brokerage account via 1^st Source Asset Advisors, then the date of the gift will be the date on which the securities are received in the Christ the King account. Donors should contact Christ the King’s business office to obtain the 1^st Source Asset Advisors’ instructions which they will then give to their broker along with a letter of instruction regarding the specific securities to be transferred. A copy of the letter of instruction should be sent to Christ the King noting the specific purpose of the gift (i.e., pledge, building fund, etc.) in order that the gift may be receipted properly.

On a very limited basis, Christ the King Lutheran Church may accept gifts of real estate, including houses, condominiums, commercial properties, farmland, rental property, and undeveloped land, after a thorough review of the following factors:

• The usefulness of the property for Christ the King’s purposes
• The marketability of the property
• The existence of restrictions, reservations, easements, and/or other limitations
• The existence of encumbrances, such as mortgages and mechanics liens
• Carrying costs, such as property owner’s association dues, taxes, insurance, and other maintenance expenses, and
• Fair market value in relation to the costs and limits listed above as determined by a qualified appraisal conducted in accordance with IRS standards

Prior to the acceptance of any parcel of real property, an assessment of the potential environmental risks will be conducted. This assessment shall include the following:

• An inquiry of the present owners regarding his, her or its knowledge of the history of the property
• A title search to determine who the prior owners might have been
• A consultation with federal, state, and local environmental agencies to find out whether the property has any history of hazardous waste contamination: and
• A visual inspection of the property for any evidence of environmental hazards

An environmental audit conducted by a professional service also may be required. The decision to accept gifts of real estate requires approval by the Council.

Christ the King reserves the right to require that the donor or the donor’s personal representative pay the cost, including professional fees, of any review or investigation described above as a condition of considering acceptance of the property in question.

Christ the King typically does not accept gifts of tangible personal property, including works of art, jewelry, antiques, coin, stamp and other collections, automobiles, manuscripts, and books. Such gifts may be accepted only after a thorough review indicates the property is readily marketable or may be used by Christ the King in a manner consistent with one of the purposes

for which it was granted status. An essential issue for donors to consider before contributing a gift of tangible personal property is whether they would like Christ the King to use or display the property. Prospective donors should be advised that Christ the King reserves the right to sell or otherwise dispose of the personal property in question if such action is financially advisable or necessary.

For goods-in-kind donations with a fair market value between $500 and $5,000, Christ the King must be furnished with the following information:

• Donor’s name, address, and telephone number
• Contact person if donor is a corporation
• Brief physical description of the donated asset, including an explanation of the method used to determine the fair market value
• Date Christ the King Lutheran Church acquired the asset and method of acquisition
• Appraisal of the donated asset by a qualified party no more the 60 days prior to date of contribution

For goods-in-kind donations with a fair market value over $5,000, Christ the King must be furnished with the following in addition to those items listed above:

• An independent evaluation from a qualified appraiser and evidence of having met the reporting requirements for IRS Form 8283, Noncash Charitable Contributions

If the property is sold within three years of the date of gift, Christ the King will execute a Form 8282, Donee Information Return (Sale, Exchange, or Other Disposition of Donated Property), a copy of which is provided to the IRS; a copy will also be provided to the donor.

All appraisals of real and personal property contributed to Christ the King shall be done in accordance with IRS Publication 561, Determining the Value of Donated Property. Expenses incurred obtaining an appraisal will be the responsibility of the donor unless special circumstances exist that make it appropriate for Christ the King to share the cost.

Planned gifts may be either deferred or outright. They may involve the transfer of substantial assets which significantly impact the donor’s estate and final plans. These gifts often do not

immediately confer institutional ownership and generally are not taken out of the donor’s current earnings. Any fees associated with managing individual charitable gifts will be paid for by the charitable gift vehicle. The acceptable methods of creating such gifts to Christ the King are described below:

Gift by Will or Revocable Living Trust

Gifts made by will or revocable living trust are completed only at the death of the donor and/or surviving beneficiary. These gifts may provide for a specific dollar amount in cash, specific securities, specific articles of tangible personal property or a percentage of the residuary estate.

Bequests may be given as unrestricted, temporarily restricted or as a gift to the Christ the King Endowment Fund.

Donors are encouraged to recognize that over the many years following the establishment of a deferred gift, the needs, policies, and circumstances of Christ the King Lutheran Church can change in unforeseen ways. The leaders of Christ the King Lutheran Church must have the flexibility to make use of the funds in the best interest of Christ the King and in accord with donor interest and specifications. Thus, donors are encouraged to avoid detailed limitations and restriction for their gifts. Donors considering bequests for a specific purpose are encouraged to consult with the Senior Pastor regarding their wishes.

Because they are subject to change, gift commitments by will or revocable trust do not generate tax deductions for the donor nor are they counted as current gift revenue for Christ the King.

They would however generate income tax deductions for the estate or trust. Donors are encouraged to advise the church of these provisions to assist in its future planning. All such notifications are held in strictest confidence unless the donor gives express permission for their plans to be made public.

Charitable Remainder Trusts

Charitable Remainder Trusts (CRT) are irrevocable arrangements that pay income to the donor and/or other beneficiaries for life or a term of years. Christ the King will accept gifts valued at

$100,000 or more to either Charitable Remainder Unitrusts (CRUT) or Charitable Remainder Annuity Trusts (CRAT). In instances where accepting gifts of a smaller amount may be advantageous to Christ the King, the Senior Pastor or the Council acting together may waive the minimum gift requirement.

Assets which are readily acceptable for charitable remainder trusts include cash, marketable securities, and real estate not subject to debts or encumbrances. Assets that require prior approval of the Christ the King Council before acceptance include closely held securities, partnership interests, and tangible personal property. Mortgaged real estate cannot be accepted.

Income paid to the non-charitable beneficiary(ies) must be a minimum of five percent of the value of the trust assets. With an annuity trust, the payment remains the same throughout the term of the trust and no additional contributions can be made. With a unitrust, the payment varies each year, as the trust assets are revalued annually. Additional contributions can be made to a unitrust.

While the rate of payment must be a minimum of five percent, the maximum rate is negotiated between the donor and Christ the King. The rate selected must consider the income needs of the donor, balanced by the actuarial table calculations on the lives of the beneficiaries to assure the preservation of the trust assets for ultimate use by Christ the King as the designated remainder beneficiary, and any IRS regulation regarding payments.

Christ the King will not pay a finder’s fee or commission to a third party to secure a charitable remainder trust, except for standard commissions on the sale of real property, securities, or similar payments necessary to the operation of the trust.

A Charitable Lead Trust (CLT) provides immediate support for Christ the King through income generated by the assets in trust for a set period, after which the assets pass to a non-charitable beneficiary such as the donor, the donor’s children, or other persons the donor specifies. In a lead trust, the donor gives Christ the King the current economic benefit of the transferred assets and retains the right to reacquire the possession and control of the assets at a future date.

There are two types of CLT: the Charitable Lead Annuity Trust (CLAT) and the Charitable Lead Unitrust (CLUT). In the CLAT, the donor sets a fixed amount of annual income Christ the King would receive. In the CLUT, Christ the King would receive a percentage of the trust value each year, meaning the income to Christ the King could fluctuate year to year.

The donor during his/her lifetime creates an irrevocable trust agreement for a period of ten years or more. The agreement may take effect during the donor’s lifetime or be part of the donor’s will. Assets are transferred to a trustee, with the stipulation that the income from the assets be paid to Christ the King as the designated income beneficiary for the life of the trust, after which the principal or corpus of the trust reverts to the donor or other of his/her choosing.

Gifts of Life Insurance

Life insurance can be a medium for giving funds to Christ the King. With it, the donor can make a substantial gift for a relatively modest annual outlay. A donor may irrevocably assign to Christ the King an existing life insurance policy that is no longer needed for family protection, making Christ the King both the policy owner and beneficiary. Premium payments made by the donor for a policy for which Christ the King is both the owner and beneficiary are tax deductible to the donor. The Fair Market Value of the policy may create an income tax deduction for the donor in the year the policy is transferred to Christ the King. If the donor does not wish to continue paying the premiums, Christ the King may elect to:

• Continue paying the premiums and receive the full-face value of the policy at the donor’s death
• Convert the policy to paid-up insurance in a reduced amount with no further payments; or
• Surrender the policy for its present value

It is also possible for the donor to purchase a new life insurance policy for gift purposes. Once again, Christ the King must be named both owner and beneficiary of the policy. In this case, however, the donor will make annual tax-deductible contributions to Christ the King in the amount of the premium due on the policy. Christ the King, in turn, will pay the premium to the company. Donors are strongly encouraged to select premium payment schedules that will allow a buildup of excess cash with the policy so that earnings on the cash and policy dividends will be sufficient to pay the premiums after five to seven years. If a donor stops making premium gifts before the policy is self-supporting, Christ the King will have the options outlined above regarding the policy.

Naming Christ the King as the beneficiary of a life insurance policy is the simplest way to provide death benefit proceeds from a policy, although it does not offer the income tax

advantages that come with gifting the policy. However, it still reduces the donor’s estate by the amount of the death benefit. Donors who are unsure of exactly how they want to apportion their assets after death can list Christ the King as a revocable beneficiary if they so choose. This gives them flexibility in future planning in case their financial situation changes.

Naming Christ the King as a beneficiary also ensures the privacy of the transaction, which can be important for donors who wish to keep their gifting intentions secret from their families or other heirs. Transfer of assets from an insurance contract is also incontestable, thus rendering anyone contesting the estate settlement powerless to stop it. Furthermore, the donor remains in a position to change the beneficiary prior to his or her death. If the donor chooses to stop paying the premiums, Christ the King can choose to continue the process or can allow the policy to lapse.

Before contributing gifts of life insurance to Christ the King, donors should consult with the Senior Pastor or Council.

Gift of Remainder Interest in a Personal Residence or Farm

A donor can give a remainder interest in a personal residence or farm to Christ the King. The donor or other occupants may continue to occupy the residence or operate the farm without disruption for the duration of the donor’s life. Thereafter, the residence or farm will either be used by Christ the King or sold with proceeds used for purposes specified by the donor, if any. The procedures for evaluating proposed gifts of real property, as outlined above, also apply to gifts of a remainder interest in property.

If a life estate is retained in property, expenses for maintenance, real estate taxes, and any indebtedness relating to the property are to be borne by the donor or the beneficiary of the life estate.

Christ the King Lutheran Church, in consultation with the donor, will designate a trustee for gifts that require the appointment of a fiduciary. If Christ the King serves as trustee, trustee fees will be assessed according to a published fee schedule. Christ the King will not accept an appointment as Trustee of a Charitable Remainder Trust or a Charitable Lead Trust.

Documents effectuating the acceptance of all gifts, the creation of endowment programs, and the transfer of real or tangible personal property to Christ the King must be approved and executed by Christ the King’s Council.

All matching gifts received by Christ the King Lutheran Church resulting from an employee or employees’ contribution(s) will be directed to the same fund as the donor’s gift unless specified otherwise by the donor or the contributing corporation.

To honor and protect those donors who desire to remain anonymous and/or desire not to have the amount of their gift or bequest disclosed to the church community, the Council, Senior Pastor, and staff will endeavor to honor any known desire on the part of a living or deceased donor that his or her identity and gift or bequest to Christ the King will remain anonymous. In cases where a donor’s desire is unknown, Christ the King will endeavor to ascertain the donor’s desire.

Approved by Council: 1/18/2022