Ways to Give

Giving to Purdue can bring several tax advantages. Although you should always speak to your accountant or attorney regarding your taxes, the general information below may help you decide how or when to give.

State of Indiana College Tax Credit

Indiana taxpayers may take a tax credit of half (50%) of their gift to Purdue. For a joint return, the maximum credit is $200 (based on a gift of $400 or more), and for a single return, the maximum credit is $100 (for a gift of $200 or more). The tax credit directly reduces the “bottom line” of your state income tax by reducing the amount you owe in taxes. All it takes is your gift to Purdue and one simple form: the Indiana CC-40.

Federal Tax Advantages

Contributions to the Purdue Foundation are deductible as charitable contributions within the limits of the Internal Revenue Code.

Cash Gifts

Cash gifts are deductible up to 50% of adjusted gross income, with any carryover applied within five years. For example, the net cost of a $1,000 cash gift to a donor in the 35% marginal tax bracket is only $650 after the $350 tax savings.

Personal Property and Gifts in Kind

Gifts in kind (books, livestock, works of art, etc.) are deductible at the full fair-market value if they are related to educational programs or activities of the university and have been held for more than one year by the donor. Unrelated gifts-in-kind also may be made.

Gifts of Appreciated Property

With careful planning, charitable gifts of certain types of assets will provide even greater tax benefits to the donor than a gift of equivalent value in cash.

Gifts of appreciated property (securities and real estate) held for more than one year are deductible up to 30% of adjusted gross income with no capital-gains tax on the appreciation. The deduction is based on the fair-market value of the donated property. Gifts of appreciated property held for less than one year are deductible only up to the cost basis in the property, with a limit of 50% of adjusted gross income.

The charitable deduction for gifts of property that would yield ordinary income or short-term capital gains if sold is limited to the donor’s tax basis (usually the original cost of the property). Gifts of appreciated property held long-term provide a double tax benefit.

The full fair-market value of gifts of long-term appreciated securities or real estate is deductible up to 30% of a donor’s adjusted gross income. Any amount in excess of the 30% ceiling can be carried forward for up to five years.

For example, Mr. Albert, who is in the 28% income-tax bracket, owns securities currently valued at $22,000, which he purchased several years ago for $2,000. He contributes the securities to charity and realizes a $22,000 charitable deduction, which saves him $6,160 in income taxes (28% of $22,000). In addition, Mr. Albert avoids the potential capital-gains tax on his $20,000 paper profit. This means a further savings of $3,000 (15% of $20,000). Thus, the actual cost for Mr. Albert for the gift of $22,000 in appreciated securities is only $12,840 ($22,000, less $6,160, less $3,000).

The time may come when contributions for a particular project can no longer be used for their original purpose due to changing conditions (for example, when a construction or renovation project is completed, with funds remaining). In that event, the university in its discretion may utilize those funds for an alternate purpose in a manner that coincides with the donor’s original intent as closely as possible.

Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To assure that philanthropy merits the respect and trust of the general public and that donors and prospective donors can have full confidence in the not-for-profit organizations and causes they are asked to support, it is declared that all donors have these rights:

• To be informed of the organization’s mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.
• To be informed of the identity of those serving on the organization’s governing board and to expect the board to exercise prudent judgment in its stewardship responsibilities.
• To have access to the organization’s most recent financial statements.
• To be assured gifts will be used for the purposes for which they were given.
• To receive appropriate acknowledgment and recognition.
• To be assured that information about donations is handled with respect and with confidentiality to the extent provided by law.
• To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
• To be informed whether those seeking donations are volunteers or employees of the organization or hired solicitors.
• To have the opportunity for the donor’s name to be deleted from mailing lists that an organization may intend to share.
• To feel free to ask questions when making a donation and to receive prompt, truthful, and forthright answers.

The text of this statement in its entirety was developed by the American Association of Fundraising Counsel (AAFRC), the Association for Healthcare Philanthropy (AHP), the Council for Advancement and Support of Education (CASE), and the Association of Fundraising Professionals (AFP). (1993)