Opportunities for Giving. Olmsted Medical Center Women s Health Pavilion

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1 Opportunities for Giving Olmsted Medical Center Women s Health Pavilion

2 Our Mission The delivery of exceptional patient care focusing on caring, quality, safety, and service. Our Vision To be the healthcare provider of choice in our service area by leading in quality, access, and service. Our Core Values Our patients come first. Every employee is a caregiver. Our employees are the key to our success. OMC is an active, contributing partner in the communities it serves. We have a duty to position and prepare OMC for the future. Olmsted Medical Center has long been a leader in obstetrical care in Southeastern Minnesota, and in recent years has expanded its women s health services including comprehensive primary preventive care and gynecological services, stateof-the-art breast healthcare, and life enhancement services including psychiatry and psychology, plastic surgery, rehabilitation services, weight management, and much more. But our aging facilities and limited space for these services no longer meet the needs or expectations of our patients and their families and our clinicians and staff. The Women s Health Pavilion will be another improvement to how we deliver exceptional patient care, and we believe our patients, families, and communities will benefit for years to come. Many of us know someone who has experienced the exceptional patient care in OMC s BirthCenter. My family and I have personally benefited from the extraordinary commitment of OMC staff in caring for my health and that of our daughter. I am a proud supporter of the Women s Health Pavilion as it promises to bring a well-planned complement of women s services coordinated for our patients at one convenient, up-to-date facility. And, because this initiative impacts all the communities in our region, we are asking for community support. Your support will help make this dream a reality! We invite you to learn more about how you can create a better environment for our patients and accomplish your own philanthropic goals. Thank you for your consideration and support. Stacey M. Vanden Heuvel Vice President, Marketing and Philanthropy Olmsted Medical Center and OMC Regional Foundation foundation@olmmed.org

3 Why Make a Charitable Gift? Well-planned charitable gifts allow you to enjoy tax benefits and maintain your financial security while accomplishing your charitable goals. Giving to the OMC Women s Health Pavilion Promise Campaign, while providing for your loved ones, helps you with your estate planning and reduces your taxes. Many options exist for making the gift you dream of for the Pavilion Promise Campaign. You can use one or more of these options: cash stocks and securities IRA charitable distributions (after age 70½) property charitable remainder trusts charitable life insurance charitable gift annuity charitable lead trusts. These options are explained further in the following pages. Scenarios are also provided to illustrate the gift plan benefits, although the names in the scenarios may not represent the actual names of benefactors. Gift of Cash You may contribute a tax-deductible gift of cash in a number of ways: Single payment of cash or by credit card Stocks or other marketable securities Qualified charitable distribution from your IRA (age 70½ or older) Pledge with multiple payments Pay in equal or planned installments for a one-, three-, or five-year period OMC employees may use payroll deduction over a year or multiple years Giving is easy through regular payments by cash, credit card, or payroll deduction. Sample cash gift scenario Monthly payment* Payroll period deduction amount* Annual gift Gift amount over three years Gift amount over five years $1,667 $ $20,000 $60,000 $100,000 $1,250 $ $15,000 $45,000 $75,000 $834 $ $10,000 $30,000 $50,000 $667 $ $8,000 $24,000 $40,000 $417 $ $5,000 $15,000 $25,000 $250 $ $3,000 $9,000 $15,000 $100 $47.00 $1,200 $3,600 $6,000 *Amounts are approximate and based on a 12-month or 26-pay-period year

4 Scenario one: Sarah, a medical assistant, is going back to school for her nursing degree, but she wants to make a gift to the Women s Health Pavilion project. As a student and medical assistant, Sarah cannot make a large commitment right now, so she would like to contribute a smaller amount each week and then increase her gift when she graduates and takes a new position. Recommendation for Sarah: Establish a bi-weekly payroll deduction of $10 for the first two years. Once employed full time as an RN, she can increase her payroll deduction to $15 per pay period for three years. Over time, using convenient payroll deduction, Sarah can make a larger gift than she thought possible. Her total gift to the Pavilion Promise Campaign would be $1,690. Scenario two: Mr. and Mrs. Smith wish to make a $25,000, five-year commitment to the Pavilion Promise Campaign; however, they immediately have several other financial obligations. After reviewing their obligations and assets, they worked with OMC Regional Foundation on an installment plan of $2,500 in December of year one, followed by payments of $469 each month for four years. Gift of Property Gifts of property allow you to make a gift of something you own, but may no longer need. These may include securities, tangible personal property (such as jewelry or collections), or a private residence (home or vacation home). After an asset is identified and its cost basis is determined, ownership can be transferred to OMC Regional Foundation. As a benefactor, you receive a tax deduction for the value of the property and avoid capital gains tax on any appreciation of the property. Scenario one: Mrs. Whillock, age 86, has a very valuable original oil painting by a well-known artist. While she is currently on a fixed income and cannot make a large cash gift, the painting is valued at $85,000. Mrs. Whillock had the artwork appraised independently and gave the painting, along with a copy of the appraisal, to OMC Regional Foundation. She also is considering a gift of her Steinway baby grand player piano to OMC to be used in the Women s Health Pavilion patient and family waiting areas. A retained life estate arrangement is another option to consider if you own a home that may not be wanted by your heirs. With a retained life estate arrangement, you and your spouse may use the property throughout your lifetimes or for a specified number of years, with a major deductible gift of the property now to OMC Regional Foundation.

5 Scenario two: Dr. and Mrs. Johnson have a beautiful home in Rochester, a charming second home in Northern Minnesota, as well as a comfortable retirement home in Florida. Their children have no interest in owning the home in Rochester, but will share the home up north. While they would like to use the property in Rochester until they permanently move to Florida, they would rather that the Rochester home not be part of their estate. Recommendation for Dr. and Mrs. Johnson: Work with their lawyer to deed the home to OMC Regional Foundation, directing the asset to the Women s Health Pavilion Promise Campaign. The life estate agreement directs that the Johnsons are responsible for upkeep, maintenance, taxes, insurance, etc. They receive an immediate tax deduction for the present market value less their future interest. If, at a later date, they decide to revoke their remaining future interest, an additional tax deduction would become available to them. Charitable Remainder Trusts Charitable remainder trusts can be designed as annuity trusts and unitrusts. A charitable remainder annuity trust allows you to give a gift to charity while maintaining an income stream. You create a trust agreement with the help of your attorney and decide on an amount and duration of income that will be paid to you or your beneficiaries. Your property is transferred to a trustee, and you can deduct the present value of the gift for tax purposes. The trustee will invest your property to sustain income and pays a fixed income to you for your lifetime or for a term of years. The property will be distributed to OMC Regional Foundation upon the completion of the specified term of years or at the death of the beneficiary. Charitable remainder unitrusts are similar to annuity trusts as they are created by an individual trust agreement and you select a personal beneficiary (you or your loved ones). Rather than deciding on the amount of income to be paid, you decide on a percentage of income to be paid. Your attorney can assist you in determining a percentage that ensures the tax deductibility. The trustee will pay the directed percentage of income to the beneficiary for the duration decided and will distribute the property to OMC Regional Foundation when the specified period ends. With a unitrust, market changes affect your income and may offset inflation.

6 Scenario: Connie, a retired nurse, owns stock in a technology company (currently worth $100,000) which she inherited from her late husband (then worth $60,000). Dividends are only $1,000 per year, and Connie would like a higher income investment. She would also like to bypass the gain over the basis. She is willing to donate the stock to OMC Regional Foundation for the Women s Health Pavilion Promise Campaign, but she needs more income for her lifetime. Recommendation for Connie: Donate her stock to charity, retaining a 6% lifetime income on market value using a charitable remainder unitrust. The trustee sells the stock (with no capital gains tax to pay) and purchases other investments generating 8% or more growth. The trustee pays the benefactor 6% of market value, selling investments if necessary to generate funds. When Connie passes away, the Trustee pays principal to the OMC Regional Foundation. Charitable Life Insurance Gifts When you make a gift of life insurance to OMC Regional Foundation, you create a capital fund for the campaign without invading your estate assets for your family. You can apply for new insurance or transfer an existing policy to OMC Regional Foundation. OMC Regional Foundation is designated as your policy beneficiary and owner. Your annual premiums can be deducted as a charitable contribution. In return, OMC Regional Foundation receives the annual dividends, owns increasing cash values, and receives insurance proceeds as a capital gift upon your death. Scenario: Dr. Jones purchases a $50,000 life insurance policy, vesting ownership in OMC Regional Foundation. Via annual contributions of premium for approximately 10 years, the gift completes itself. This major gift does not dilute Dr. Smith s estate for his heirs, and the annual cost of the premiums is reduced by a tax deduction each year. Policy cash values increase annually and are carried on the books of OMC Regional Foundation. Commitment by Dr. Jones to pay premiums to the dividend offset point assures that OMC Regional Foundation will receive $50,000. Upon Dr. Jones death, proceeds are paid directly to OMC Regional Foundation for the Women s Health Pavilion.

7 Charitable Gift Annuities A charitable gift annuity is a life annuity that you acquire directly from OMC Regional Foundation. The assets of OMC Regional Foundation guarantee your annuity income. Over your lifetime, you recover your investment in the annuity tax-free. OMC Regional Foundation receives outright transfer of the capital gift and commits the full faith and credit of the organization to pay the annuity throughout your lifetime. Scenario: Roger will retire at age 72 from the company where he s worked for 40 years. He has a pension account that will provide him with an adequate retirement income and $50,000 in a savings account. The savings account currently yields 1%, and Roger would like to increase his income from his savings and isn t sure he can make a gift to OMC Regional Foundation, at least until he dies. Recommendation for Roger: Establish a charitable gift annuity with OMC Regional Foundation to increase his income stream from 1% to 5.4%. OMC Regional Foundation will pay Roger an annual annuity payment, and Roger makes a charitable gift during his lifetime and can get the satisfaction that the place where his children were born can continue to serve families in the years to come. Charitable Lead Trust If you are looking for a way to pass on some of your assets to your family while reducing or eliminating gift or estate taxes, a charitable lead trust is an excellent option. With a lead trust, you make a contribution of your property to fund a charitable lead trust that pays OMC Regional Foundation income for a number of years. You receive a gift or estate tax deduction at the time of your gift. After a period of time, your family receives the trust assets plus any additional growth in value. It is even possible to set up a lead trust that will allow you to transfer assets to your family with zero transfer taxes. The IRS assumes that a lead trust is only earning at the current low federal rate. If the actual investments of the trust produce a higher return than the payments made to charity over the term of the trust, then the full value of the trust may be transferred to family with zero gift tax. To discount your gift to family even more, you may consider first transferring your real estate or other assets into a family limited partnership (FLP) which will fund your lead trust. The combination of the FLP, the lead trust, and a gift exemption can permit the lead trust to pay income to OMC Regional Foundation for a number of years and potentially transfer substantial assets tax-free to your family. With increased volatility in the stock market, you may also want to consider creating a lead trust that makes fixed payments of increasing amounts to us over time. Because the payments to us are fixed, your family ultimately benefits from any growth in the trust. Low payouts in early years allow the trust to grow, thus allowing protection should the economy produce below-average returns in the future.

8 Scenario: Mrs. Green is considering a $50,000 annual pledge to the Women s Health Pavilion Promise for a period of five years. In the absence of a charitable lead trust, she can claim a charitable contribution income tax deduction for the payments to OMC Regional Foundation in each year they are actually made. As an alternative, Mrs. Green can transfer $1 million in tax-exempt bonds to a grantor charitable lead annuity trust. The trust is designed to pay $50,000 per year to charity for a period of five years, after which the trust will terminate and return its assets back to Mrs. Green. In this scenario, Mrs. Green will receive a charitable contribution deduction equal to the present value of the income interest being transferred to OMC Regional Foundation. The total amount to be distributed to OMC Regional Foundation over the five-year period is $250,000. The present value of the income interest is calculated to be $205,524. The deduction can be used by Mrs. Green subject to the percentage limitation and reduction rules of IRS Section 170. Testamentary Gifts A bequest to OMC Regional Foundation as part of your will is another way to make a meaningful gift to support our organization. In your will or trust, you can direct your personal representative to pay a fixed amount or percentage to OMC Regional Foundation. You retain your right to change the amount of your gift or to name a different charity in your will/trust. After your death, OMC Regional Foundation will receive your capital gift. In addition, OMC Regional Foundation can continue to receive your annual gifts from you and your family since a bequest costs nothing during your lifetime. Please ask your attorney to document your wishes and notify OMC Regional Foundation. Your will shows records of your wishes until you change it through rewriting it or through a codicil. Meet with an OMC Regional Foundation Representative OMC Regional Foundation wants you to select the best gift plan to meet your needs. A representative from OMC Regional Foundation would be happy to meet with you to discuss these and other giving options in detail in order to create your gift plan for the OMC Women s Health Pavilion Promise Campaign. Your support will help make this dream a reality. Please call us at or foundation@olmmed.org for more information, to schedule a tour, or to establish a meeting time that is convenient for you. Thank you for your consideration and support.

9 Opportunities for Giving Olmsted Medical Center Women s Health Pavilion