Strategic Giving in This Uncertain Economic Environment

Over the course of the last year or two, our collective financial landscapes have been altered, sending rippling waves of change felt everywhere from Wall Street to non-profit organizations like Germantown Academy.  Surely no one is unaffected by the recent historic variations within our national, and global, economy.

To steady our unease about such unpredictable changes, we can take at least some solace in two proven constants: lessons learned from our national history and the overall institution of education as a whole.

History shows us that, despite the current upheaval, financial markets over time do indeed surge and retreat.  All-time lows of the past were inevitably followed by restraint and eventual recovery.  Enabling such a recovery is fully reliant upon sound leadership, the kind of leadership that is kindled and nurtured in our nation’s best schools, like Germantown Academy. 

So, given the current environment, how can a donor make a gift to GA that would both be practical and wise in this fiscal climate and support the mission of our school in a significant way?  There are many gift planning ways to do so.  One, for example, is by establishing a Charitable Lead Trust (CLT) funded with depreciated stock.

Example:

  • $200,000 of depreciated stocks (valued at 50% less this year than last) funds a CLT that, for a term of 10 years, pays GA a fixed 5% (or $10,000) per year.
  • After that 10 year term, the trust corpus reverts to the donor’s heirs while a total of $100,000 has been gifted to GA for student financial aid support
  •  As markets head toward recovery over the 10 year term the stocks recover their value from the year prior to establishing the trust and are now valued at $400,000 to pass to heirs
  • $200,000 of that trust value was in stock appreciations over the time of the investment, all of which is passed back to you, or on to the heirs, tax free as appreciation is not subject to capital gains

This example illustrates just one scenario of philanthropic action that can be taken now to help Germantown Academy today and preserve or even grow your assets for tomorrow.  To learn more ways to support GA and its mission of educating leaders for a global society, please contact Martin Dean at GA’s Office of Institutional Advancement (215) 646-3300 or