For a homeless kid without a family, there is no such thing as an inheritance... no nest egg passed from generation to generation. But through your legacy, our kids will know that someone remembered them... someone did plan for their future by funding programs that will keep them off the streets for good.
Making a gift through your will is an excellent choice if you want to have a lasting impact on the lives of kids facing homelessness but wish to maintain liquidity and use of your assets during your lifetime. And the full amount of your gift is deductible from your taxable estate.
A bequest can be unrestricted, enabling Covenant House to direct your funds where future need is greatest, or restricted to a particular program or Covenant House location.
Example of unrestricted bequest language:
I give (insert dollar amount, property to be given, percentage of the estate, or "the remainder of my estate") to Covenant House, a New York nonprofit corporation, Taxpayer Identification Number 13-2725416, headquartered at 461 Eighth Avenue, New York, NY 10001, for its general use and purposes.
Example of restricted bequest language:
I give (insert dollar amount, property to be given, percentage of the estate, or "the remainder of my estate") to Covenant House, a New York nonprofit corporation, Taxpayer Identification Number 13-2725416, headquartered at 461 Eighth Avenue, New York, NY 10001, and it is to be used specifically for [insert designated program or location].
Designating a beneficiary of a financial account is easy to do. In most cases, beneficiary designations can be created or changed by simply signing a form provided by the account administrator. Often, a beneficiary can even be changed online. No lawyer is required. Beneficiary designations allows for assets to pass outside the probate process, which may reduce costs and the potential for contests.
Bank accounts, DAFs & mutual fund and brokerage accounts - Many different types of accounts such as bank accounts (either checking or savings), donor-advised funds & mutual fund and brokerage accounts have ‘payable on death’ or ‘transfer on death’ beneficiary designations.
Life insurance - After many years, the original need that prompted the purchase of a life insurance policy may have passed, making the policy proceeds an asset that can be used for charitable giving.
Retirement accounts - Funds from retirement accounts are among the most highly taxed estate assets. For this reason, IRAs, 401(k)s, 403(b)s, Keough Plans, SEP IRAs and other retirement plans make great opportunities for charitable beneficiary designations. Your heirs will have to pay tax at ordinary income tax rates on distributions they receive from inherited IRAs. Because Covenant House is a tax-exempt organization, IRA distributions received by Covenant House are not subject to income tax. Designating Covenant House as a beneficiary of your IRA or other retirement plans can mean that those funds will be used to establish your legacy of caring for our kids without being reduced by income tax.
The Gift Annuity is a popular planned giving option that provides you with quarterly payments for life and an immediate income tax deduction in the year you make your gift. Gift Annuities can be made with cash or appreciated securities. The minimum donation is $5,000 and there is no maximum amount.
The plan is simple and reliable, the rates are generous, and the feeling of doing something special for kids facing homelessness is priceless.
For a proposal prepared just for you with no obligation, please call us at 1-800-388-8888 or email us at PlannedGiving@CovenantHouse.org.
Sample Maximum Gift Annuity Rates
Single-Life Immediate Annuity Rates as of January 1, 2020:
If you are 70 ½ or older, you can direct a gift to Covenant House directly from your IRA that will lessen your tax burden and help kids facing homelessness. When it is time to file your taxes, your gift to Covenant House is a Qualified Charitable Distribution (QCDs) and does not increase your taxable income (up to $100,000).
Important Note: Increased Age for RMDs as of January 2020
The SECURE Act, passed on December 20, 2019, included many changes to the rules governing retirement plans. Of note, the age at which the owner of an IRA must begin taking required minimum distributions (RMDs) has increased from 70 ½ to 72 years old.
You are still permitted to make qualified charitable distributions (QCDs) starting at 70 ½ years old, but you are no longer required to fulfill an RMD until the age of 72. This change applies to donors who turn 70 ½ after January 1, 2020, and applies to 401(k)s and other qualified retirement plans.
Contact your IRA Administrator for instructions on making an IRA Charitable Rollover gift to Covenant House.
Each trust with Covenant House is individually planned, funded and administered. This personal handling allows the greatest flexibility in the assets used to fund the gift, the type and duration of income, and the ultimate use of the gift by Covenant House.
Benefits of charitable remainder trusts
Charitable remainder trusts provide income for life to you or someone you designate, after which the trust remainder will go to fund Covenant House's lifesaving programs. Unlike a charitable gift annuity, the payments from a charitable remainder trust can be customized to your needs:
Payments can be fixed or variable to grow with the market.
Payments can be deferred into the future.
Payments can stop after a period of years.
Payments can continue to you for life and then be transferred to another person for life (or a period of years).
Payment options are almost unlimited to meet your needs.
Cash or publicly traded stock can be used to establish a charitable remainder trust, as can real estate, shares of a closely held corporation, tax-exempt bonds, IRA leftovers or even artwork. The minimum for funding a trust with Covenant House is $100,000.
Covenant House's charitable remainder trusts receive high-quality administration at no cost to you or to the trust. Asset allocation and investment selection are obtained through Vanguard, with independent evaluation through Morningstar. You choose from among a wide variety of highly rated Vanguard funds for the investment of your trust.
Covenant House Cornerstone is the legacy society comprised of the treasured people who have committed to remember Covenant House kids in their estate plans. As a Cornerstone Member, you are an irreplaceable part of the foundation of our mission. You will receive a certificate, regular updates on our work, and invitations throughout the year to special events for Covenant House’s closest friends, including an invitation to a Cornerstone Member luncheon.
If you include Covenant House and our kids in your estate plans, please contact us so that we can thank you appropriately.
Meet two Cornerstone members:
Annemarie donates her time as a member of our Mother/Child program board. “The young moms at Covenant House are inspiring, they work so hard to give their babies a better life, and I’m so privileged they allow me to be even a small piece of their lives,” says Annemarie. “We organize birthday parties, and holiday celebrations, and help raise funds to provide for all the necessities young moms need for themselves and their babies.
“We also help our moms and other Covenant House residents with practical things like resume writing, and practice for job interviews. Covenant House will always be here for them, but we also strive to help our kids to be independent.”
Annemarie so believes in the mission of Covenant House and the promise of our kids that she has made the decision to include Covenant House in her will. “When that time comes, I can think of no better way to make a difference than to help young people in the future who need Covenant House,” she says.
As a new Air Force chaplain serving in North Dakota, Father Ed happened upon a Covenant House newsletter lying open on a table. Intrigued, he picked it up, started reading, and was quickly moved to give to our cause.
That chance encounter in 1976 became the catalyst for Fr. Ed’s long support of Covenant House’s mission to care for children and youth facing homelessness. He has journeyed with us for most of the life of Covenant House, which was founded just four years before he opened that brochure.
Now Fr. Ed has decided to leave an enduring legacy with Covenant House by remembering our young people in his estate plans. “What better good could I do with my money?” he asks.
Fr. Ed says he is remembering Covenant House and our young people in his will because “I believe the work is of the greatest importance. If it can be done better, more widely, and reach a greater population, I think that’s what the Gospel calls us to do. And it’s so needed. The need won’t go away.”
Fr. Ed encountered Sister Mary Rose at the Dominican Sisters’ center in Menands, New York, when Fr. Ed led a retreat there. Sr. Mary Rose had retired from Covenant House, having expanded our mission to 10 new cities in 13 years, and was living at her order’s motherhouse nearby. After the retreat, she asked Fr. Ed to be her spiritual director.
“We met on a monthly basis,” he says. “It helped me to be in the presence of this living saint. She was awesome, a blessing to me. She was just such a compassionate and giving person.”
When he first picked up our newsletter all those years ago, Fr. Ed says, “I was completely unaware there were all these homeless kids.” He supported our children and youth when we had only one house—in New York City. Today, we have 31 shelters in six countries, and Fr. Ed is still with us. His legacy gift will help us grow our mission and improve our services into the future.