What Is a Blended Gift?

Submitted by OSF HealthCare Foundation

A blended gift is a creative and easy giving strategy that may help you accomplish your philanthropic goals in a way that fits your budget, your family needs, and your schedule. Through the combination of an outright gift made now, “blended” with a future planned (or legacy) gift in your will, trust, or estate plan, you can make a tremendous impact on the lives of others!

Here is an example of how this might work:

Bob and Susie Smith (fictional names) have been supporters of OSF for many years. Bob and Susie are both retired and have spent time volunteering at OSF St. Joseph Medical Center in Bloomington. After seeing the outstanding care being provided there, Bob and Susie chose to make a special gift to ensure support and care for future generations

Bob and Susie made an outright gift of $10,000 and pledged to make additional gifts of $10,000 a year, over the next 4 years for a total of $50,000. It was an easy decision when they found they could satisfy their RMD (required minimum distribution) by making their gift via an IRA Charitable Rollover. They also liked the tax benefit as a charitable rollover does not create a taxable event for them. With their gift, Bob and Susie chose to create the Bob and Susie Smith Endowment at the OSF Foundation, to support OSF St. Joseph. By creating their family endowment, Bob and Susie were happy to be setting an example for their children and grandchildren on the importance of giving to others in a way that will last long into the future.

At the same time, Bob and Susie decided to also include an additional gift in their will to further supplement the endowment, thus creating an even larger impact. Since remaining retirement assets given to family members (i.e. children) through a beneficiary designation are taxable to the children, Bob and Susie decided to name OSF Foundation and their endowment as the beneficiary of their IRA and chose other assets that did not create additional tax consequences to pass to their children. Since OSF is a qualified 501c3 non-profit organization, the full amount of the gift will be used to fulfill their intent with no tax. Bob and Susie also liked the fact that they didn’t need to change or update their will since all that was required was a Change of Beneficiary form for their IRA.

With their blended gift, Bob and Susie’s children and grandchildren will be able to see the wonderful work that will be accomplished because of their parents’ and grandparents’ vision and generosity. This blended gift of an outright gift, pledge, and planned (or legacy) gift, is what worked for Bob and Susie. They could make gifts over time, and subsequently, accomplish something much greater than if they had tried to do it all at once.

Please contact Shelly Peters at the OSF HealthCare Foundation to learn more.