Dear friends:
To begin the new year, I will be spending the next few weeks highlighting a few of the most effective gift models available for planned and deferred giving through the Foundation. My hope is that this will be both informative and perhaps useful--either now or sometime many years into the future.
Endowments
An Endowment is one of the most unique ways of blessing a ministry because it can continue indefinitely. Once funds are deposited with the Nazarene foundation, a portion of the income from the endowment is distributed every single year, in your name, to the ministry that you designate. This provides ongoing income for whatever you have chosen to endow, ensuring that it can continue to exist for many years into the future. An endowment can be started with one lump gift, or you, your family, and your friends can fund it over a period of several years.
Many endowments are started as a way of honoring someone you love, such as a mother or father, spouse, or mentor. You can create a legacy for yourself or your family and know that your endowment will continue to be a blessing in perpetuity. An endowment can be created for anything--a church, a school, a ministry, a mission field, or even a scholarship.
If you are interested in more information about endowments, please contact us by phone at (913) 577-2983 or by email at info@nazarenefoundation.org.
Blessings,
Ken Roney
President
WASHINGTON NEWS
Tax Proposals by Sanders and BushPresidential candidates Bernie Sanders and Jeb Bush released new tax proposals this week. Vermont Senator Sanders disclosed his strategy for covering the cost of his comprehensive healthcare plan. Former Florida Governor Bush outlined a new education reform plan.
Sanders released his tax plan for a universal healthcare proposal. The release was just before the recent Democratic debate in Charleston, SC. Sanders stated that his healthcare plan will cost $1.38 trillion each year.
There are seven major funding components for Sanders’ healthcare plan.
| Type of Payment | Who Pays | Target Revenue |
| 2.2% of Income | Individual | $210 billion |
| 6.2% of Payroll | Employers | $630 billion |
| Up to 52% Income Tax | High-Income Persons | $110 billion |
| Cap. Gains Taxed at Ord. Rates | Owners | $92 billion |
| Deduction Limits | High-Income Persons | $15 billion |
| Estate Taxes | Large Estates | $21 billion |
| Healthcare Deductions | Taxpayers | $310 billion |
For children from low-income families, there also will be a charitable deduction for gifts to an ESA. In addition, the current $22 billion per year of federal education dollars will be used to allocate a $2,500 annual scholarship to all ESAs for low-income families.
Editor’s Note: As an educational service to our readers, your editor will cover tax proposals by candidates of both parties. Previous notes have discussed tax proposals by eight major candidates from the two parties.
IRS Identity Theft Fact Sheet
Each January the IRS publishes a fact sheet for identity theft victims. In FS-2016-3 the IRS stated, “The IRS knows identity theft can be frustrating and confusing for victims. When it comes to tax-related identity theft, the Internal Revenue Service wants to resolve cases as quickly as possible. The IRS has worked hard to help victims of identity theft by making improvements and shortening the time it takes to resolve these complex situations.”
There are six recommended steps in the IRS procedures.
- File – If you are not able to eFile, you must file for the year using a paper tax return.
- Report – Use IRS Form 14039, Identity Theft Affidavit, and send it in with your paper tax return.
- IRS Response – The Identity Theft Victim Assistance (IDTVA) section of the IRS will respond with a letter.
- Scope and Issues – IDTVA will check to see if other years of your returns are suspect. There may be other victims on the fraudulent return filed with your name. IRS will also check to make sure that the returns have accurate names, addresses and Social Security Numbers.
- Refunds – After the IRS reviews various issues, it will process a refund, if you are so entitled. The IRS goal is to resolve the case within 120 days.
- Future Returns – You will receive an Identity Protection PIN number in a letter from the IRS. You may use this number on your future tax returns.
- If the IRS suspects fraud, it will contact you by letter. The letter may ask you to go toidverify.irs.gov to enter information. There also will be a toll-free number to the IRS Taxpayer Protection Program.
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PERSONAL PLANNER
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PERSONAL PLANNER
'Give It Twice' TrustA very popular option for a parent with children is called the "Give It Twice" trust. This is a trust funded when the surviving parent passes away. Part of the estate is transferred outright to children. The balance is placed in a special "Give It Twice" trust.
The trust pays income to children for a term of years—usually 20 years. The income can be divided equally among the children for that period of time. Following the selected term of years, the trust principal is then transferred to charity.
In effect, the property has been used twice—once to benefit children with income and the second time to help charity at the end of the trust.
Cindy is a surviving spouse. Her spouse, Michael, passed away four years ago. She is doing fine and combined both IRAs into one. Cindy's estate is now approximately $800,000. Her home, CDs and other property are valued at $400,000, and the combination of IRAs is also about $400,000.
She was reading online about the "Give It Twice" trust. Because Cindy is debt free and has Social Security plus pension income, she thinks that her estate, when she passes away, is likely to be fairly close to its current value. Cindy sat down with her attorney David, to discuss the possibility of creating a trust.
Cindy: "David, I was reading an article online about this special "Give It Twice" trust. It sounds like you can give an asset once to children through the income stream and then transfer the trust property to charity."
Attorney: "Yes, Cindy, that can be done."
Cindy: "Before Michael passed away, we talked about this. We agreed to treat each of our four children equally and also provide a benefit to our favorite charity."
Attorney: "With your estate of $800,000, you have the ability to do something pretty significant for both your family and favorite charity."
Cindy: "Yes, but there is one big problem. Our three older children—Bill, Sue and Pete—do fine. They are quite financially responsible. But our youngest son Ted is very creative. He spends money like water. If we gave him one-fourth of the estate or $200,000, I am afraid he would spend that very quickly. We need to figure out a way to protect at least part of his inheritance."
Attorney: "That 'Give It Twice' plan could be very helpful. You can benefit all four children equally with an initial amount. For example, you could transfer the $400,000 to them when you pass away. That would be $100,000 per child. The other $400,000 could go to the trust. They would each receive one-fourth of that income for 20 years. That would give Ted a chance to learn to save and invest. In addition, if you transfer the IRA into that trust, you can save all that income tax because the special trust is tax exempt."
Cindy: "This sounds like a great plan. When I pass away, I could transfer my IRA into the "give it twice" trust and benefit my four children and my favorite charity. But how do I do that?"
Attorney: "I can write a trust that you sign. It's called an unfunded trust because there are no assets at present. Then we will contact your IRA custodian and select this charitable remainder trust as the designated beneficiary for your IRA. When you pass away, the IRA balance will be transferred to the trustee of your 'give it twice' trust."
Cindy: "This is very exciting. It is going to be great for my family and we will also be able to help our favorite charity after the term of years. I especially like the way that this will help Ted to learn to save and invest. Let's move forward as quickly as possible."
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SAVVY LIVING
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SAVVY LIVING
How to Find Discounts for People with DisabilitiesAre there any worthwhile discounts available to people with disabilities, and if so, how can I find them? My wife - who's 48 - has Multiple Sclerosis that now requires her to use a wheelchair.
There are a wide variety of discounts and services available to people with disabilities and those living with a chronic illness that can literally save hundreds and even thousands of dollars each year. Here are some tips to help you find them.
Always Ask
The first thing to know is that most businesses that offer discounts to people with disabilities don't publicize them, so it's important to always ask.
Also, most nonprofit organizations and government agencies that provide disabled services or benefits will require proof of disability before they will accommodate you. This could be accomplished by providing a letter from a doctor or some other form of verification.
Search Locally
The disabled discounts available to your wife will vary depending on where you live. A good place to start is to contact the local chapter of the nonprofit organization that specializes in your particular disease or disability. In your wife's case that would be the National Multiple Sclerosis Society (nationalmssociety.org,
800-344-4867 FREE).Local chapters often know where to find discounts on medical supplies, mobility equipment and support services. Some organizations have even negotiated special discounted rates with suppliers and a few even provide subsidized equipment directly.
To search for other disability or disease specific organizations, use any Internet search engine and search by typing in your disability followed by the word "organizations" (ex. "Arthritis Organizations" or "Hearing Loss Organizations").
Search Online
DisabledDiscounts.com is one of the best resources for finding disabled discounts online. This is a free website that lists thousands of discounts in all 50 states. You search by state and county and can explore 30 different categories ranging from assistive technology to federal and state tax discounts, entertainment, education and so much more.
You can also visit Benefits.gov and BenefitsCheckUp.org—two great sites that will help you look for financial assistance programs you and your wife may be eligible for and will explain how to apply. Additionally, Disability.gov is a useful site that connects people who have disabilities to helpful programs and services in their areas.
Types of Discounts
Here are a few examples of the different types of disabled discounts and services that are out there.
Recreation: Most movie theaters, museums, zoos, theme parks and aquariums provide reduced admission to people with disabilities. The National Park Service offers the "America The Beautiful Access Pass" (see nps.gov/findapark/passes.htm) to disabled residents, which provides a lifetime of free access into all national parks and federal recreational lands.
Taxes: There are numerous federal tax deductions and credits available to people with disabilities. Additionally, a number of states and counties also offer property tax deductions to disabled homeowners.
Utilities: Many utility companies—including electric, gas, phone, water and trash services—offer discounts to customers who are disabled, elderly or low-income.
Communication Devices: 47 states have equipment distribution programs (seetedpa.org) that offer free amplified telephones to residents with hearing impairments.
Home Modifications: There are a number of federal, state, local and nonprofit organizations that help pay for home accessibility improvements like wheelchair ramps, handrails and grab bars for elderly and disabled people in need.
Travel: Amtrak offers a 15% rail fare discount to adult passengers with a disability and up to one traveling companion.
Reading Services: For those with vision or physical impairments that make it difficult for them to read, the Library of Congress (see loc.gov/nls) offers a "Talking Books" program that provides free audiobooks, magazines and audio equipment. The National Federation of the Blind offers a free newspaper and magazine reading service at nfbnewslineonline.org.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070..
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YOUR PLAN
Charitable Gift Annuity
Charitable Gift Annuity
God had been so good to Charles and Gladys Prescott, that when it came time to plan for retirement, they wanted to make sure they gave back a portion of God's blessings to Him. Little did they know that God would once again bless them through a Charitable Gift Annuity that provided a return far above what they could earn on a CD.
A Charitable Gift Annuity allowed them to take money that would otherwise bring very little interest in the bank and invest it in God's kingdom while providing a high level of income at the same time. Charles and Gladys receive a regular income at a guaranteed rate for the rest of their lives. A portion of what they receive is tax deductible, and when they established their Charitable Gift Annuity, they received an income tax deduction.
Beyond the security of receiving regular income for life, the Prescott's most appreciate being able to designate how the remaining funds will be used after they go home to Heaven.
Charles and Gladys were so pleased with their first charitable gift annuity, that they have established several more over the years and they have designated several different Nazarene ministries to receive the remaining funds after their death.
Through Charitable Gift Annuities, the Prescott's have planned well for their financial security and income needs. They have established a legacy of faithful stewardship that will continue to bless others, long after their death. They are wonderful examples of what God can do when His faithful servants team up with the Church of the Nazarene Foundation.
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FINANCES
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FINANCES
Stocks - Starbucks Reports Quarterly Earnings
Starbucks Corporation (SBUX) reported its first quarter results on Thursday, January 21. The coffee shop chain beat earnings estimates but posted slightly weaker revenues than expected.
The company reported $5.37 billion in revenue, up 12% from the same quarter last year. Analysts had expected revenue of $5.39 billion.
"Starbucks record Q1 2016 financial and operating results, highlighted by comp sales increases of 9% in the U.S., 8% globally, another 4% increase in global traffic - and record performance from our Channel Development segment - underscore the accelerating strength and relevance of the Starbucks brand around the world," said Starbucks Chairman and CEO Howard Schultz. "Successful retail, CPG, digital, mobile, loyalty card and investment strategies are combining to accelerate our revenue growth and drive significant margin expansion and EPS leverage."
The coffee purveyor posted earnings per share of $0.46. This was slightly higher than analyst estimates of $0.45 per share.
Starbucks has crafted a loyalty card experience that ties in to its mobile app. The company offers incentives for customers to order through the app and to keep coming back for more. The company also announced earlier in the month that it would be opening 500 new stores in China. The coffee giant expects to have a total of 2,400 stores in China within 3 years.
Starbucks Corporation (SBUX) shares ended the week at $59.17, up 0.8% for the week.
Netflix Continues to Expand
Netflix, Inc. (NFLX) reported its quarterly earnings on Tuesday, January 19. The video streaming service beat earnings expectations for the quarter, while revenue was slightly lower than anticipated.
The company reported Revenue of $1.82 billion, up from $1.49 billion during the same quarter last year. Analysts had forecasted slightly higher revenue of $1.83 billion.
"On January 1st, just a few hours after the quarter closed, we crossed 75 million members," said Netflix CEO Reed Hastings and CFO David Wells in a letter to investors on Tuesday. "Our quarter-end 74.76 million members put us at over 17 million net additions for the year, showing how much the world is embracing Internet TV. We think we'll grow by over 6 million members in Q1 given our expansion of Netflix to virtually everywhere but China."
Netflix reported net income of $43 million or $0.07 per share. This is down from $0.10 per share last year but higher than the $0.02 per share that analysts had expected.
Netflix, once seen as a way to watch previously released movies and television shows, has continued its push into original programming. With new offerings such as Jessica Jones and Making a Murderer, the company has been able to generate significant interest. The company has also continued its international expansion with service now in over 190 countries.
Netflix, Inc. (NFLX) shares ended the week at $100.72, down 5.5% for the week.
Delta Air Lines Reports Earnings
Delta Air Lines, Inc. (DAL) reported its quarterly earnings on Tuesday, January 19. The company reported lower than expected revenue.
The air carrier posted quarterly revenue of $9.5 billion, down 1.5% from the same period last year. Analysts had estimated revenues of $9.6 billion for the quarter.
"Our 2015 performance was a record for Delta on all fronts - with industry-leading operational performance, superior customer satisfaction, and a $5.9 billion adjusted pre-tax profit," said Delta CEO Richard Anderson. "As we look ahead to 2016, we have a significant opportunity to improve our performance even further. With over $3 billion in potential savings from lower fuel prices and numerous commercial, operational and cost initiatives already in place, we expect to again perform in the top tier of the S&P Industrials on earnings growth, margins, and cash flows this year despite global economic challenges."
Delta reported net income of $926 million or $1.18 per share. This was an increase of 51% from the same quarter last year.
The Atlanta-based airline and its competitors continue to weather the current turbulence in the global economy. Delta's passenger unit revenues dropped 1.6% for the quarter. The dip in oil prices, however, has resulted in cost savings that may offset the decreased revenue. Illustrating this, the company's adjusted fuel expense declined by $726 million from the same quarter last year.
Delta Air Lines, Inc. (DAL) shares ended the week at $46.76, up 2% for the week.
The Dow started the week of 1/18 at 16,009 and closed at 16,094 on 1/22. The S&P 500 started the week at 1,889 and closed at 1,907. The NASDAQ started the week at 4,548 and closed at 4,591.
The company reported $5.37 billion in revenue, up 12% from the same quarter last year. Analysts had expected revenue of $5.39 billion.
"Starbucks record Q1 2016 financial and operating results, highlighted by comp sales increases of 9% in the U.S., 8% globally, another 4% increase in global traffic - and record performance from our Channel Development segment - underscore the accelerating strength and relevance of the Starbucks brand around the world," said Starbucks Chairman and CEO Howard Schultz. "Successful retail, CPG, digital, mobile, loyalty card and investment strategies are combining to accelerate our revenue growth and drive significant margin expansion and EPS leverage."
The coffee purveyor posted earnings per share of $0.46. This was slightly higher than analyst estimates of $0.45 per share.
Starbucks has crafted a loyalty card experience that ties in to its mobile app. The company offers incentives for customers to order through the app and to keep coming back for more. The company also announced earlier in the month that it would be opening 500 new stores in China. The coffee giant expects to have a total of 2,400 stores in China within 3 years.
Starbucks Corporation (SBUX) shares ended the week at $59.17, up 0.8% for the week.
Netflix Continues to Expand
Netflix, Inc. (NFLX) reported its quarterly earnings on Tuesday, January 19. The video streaming service beat earnings expectations for the quarter, while revenue was slightly lower than anticipated.
The company reported Revenue of $1.82 billion, up from $1.49 billion during the same quarter last year. Analysts had forecasted slightly higher revenue of $1.83 billion.
"On January 1st, just a few hours after the quarter closed, we crossed 75 million members," said Netflix CEO Reed Hastings and CFO David Wells in a letter to investors on Tuesday. "Our quarter-end 74.76 million members put us at over 17 million net additions for the year, showing how much the world is embracing Internet TV. We think we'll grow by over 6 million members in Q1 given our expansion of Netflix to virtually everywhere but China."
Netflix reported net income of $43 million or $0.07 per share. This is down from $0.10 per share last year but higher than the $0.02 per share that analysts had expected.
Netflix, once seen as a way to watch previously released movies and television shows, has continued its push into original programming. With new offerings such as Jessica Jones and Making a Murderer, the company has been able to generate significant interest. The company has also continued its international expansion with service now in over 190 countries.
Netflix, Inc. (NFLX) shares ended the week at $100.72, down 5.5% for the week.
Delta Air Lines Reports Earnings
Delta Air Lines, Inc. (DAL) reported its quarterly earnings on Tuesday, January 19. The company reported lower than expected revenue.
The air carrier posted quarterly revenue of $9.5 billion, down 1.5% from the same period last year. Analysts had estimated revenues of $9.6 billion for the quarter.
"Our 2015 performance was a record for Delta on all fronts - with industry-leading operational performance, superior customer satisfaction, and a $5.9 billion adjusted pre-tax profit," said Delta CEO Richard Anderson. "As we look ahead to 2016, we have a significant opportunity to improve our performance even further. With over $3 billion in potential savings from lower fuel prices and numerous commercial, operational and cost initiatives already in place, we expect to again perform in the top tier of the S&P Industrials on earnings growth, margins, and cash flows this year despite global economic challenges."
Delta reported net income of $926 million or $1.18 per share. This was an increase of 51% from the same quarter last year.
The Atlanta-based airline and its competitors continue to weather the current turbulence in the global economy. Delta's passenger unit revenues dropped 1.6% for the quarter. The dip in oil prices, however, has resulted in cost savings that may offset the decreased revenue. Illustrating this, the company's adjusted fuel expense declined by $726 million from the same quarter last year.
Delta Air Lines, Inc. (DAL) shares ended the week at $46.76, up 2% for the week.
The Dow started the week of 1/18 at 16,009 and closed at 16,094 on 1/22. The S&P 500 started the week at 1,889 and closed at 1,907. The NASDAQ started the week at 4,548 and closed at 4,591.
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Bonds - Treasury Yields Rebound
Bonds - Treasury Yields Rebound
Treasury yields rose on Friday, January 22 as prices fell. Investors appear to be buying low on stocks after a market rout earlier in the week.
The uncertainty in the global economy has resulted in a rollercoaster ride for stock markets this week. The Dow Jones dropped sharply early in the week before rebounding. Similar uncertainty in foreign markets has led to discussions of more stimulus measures in the near future, especially in Europe.
"As we start the new year, downside risks have increased again amid heightened uncertainty about emerging market economies' growth prospects, volatility in financial and commodity markets and geopolitical risks," said European Central Bank President Mario Draghi. "We will review and therefore possibly reconsider our monetary policy stance at our next meeting in March."
Meanwhile, in the U.S., the Federal Reserve is in the midst of an effort to slowly raise interest rates over time. The Fed moved to raise rates in December after months of speculation.
Many analysts believed the Fed would follow up on the December rate hike with another in March. The recent economic volatility, however, has cast plenty of doubt on that prediction.
The 10-year Treasury note yield finished the week of 1/18 at 2.05% while the 30-year Treasury note yield was 2.83%.
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CDs and Mortgages - Interests Rates Fall Again
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, January 21. Mortgage interest rates fell for the third consecutive week.The uncertainty in the global economy has resulted in a rollercoaster ride for stock markets this week. The Dow Jones dropped sharply early in the week before rebounding. Similar uncertainty in foreign markets has led to discussions of more stimulus measures in the near future, especially in Europe.
"As we start the new year, downside risks have increased again amid heightened uncertainty about emerging market economies' growth prospects, volatility in financial and commodity markets and geopolitical risks," said European Central Bank President Mario Draghi. "We will review and therefore possibly reconsider our monetary policy stance at our next meeting in March."
Meanwhile, in the U.S., the Federal Reserve is in the midst of an effort to slowly raise interest rates over time. The Fed moved to raise rates in December after months of speculation.
Many analysts believed the Fed would follow up on the December rate hike with another in March. The recent economic volatility, however, has cast plenty of doubt on that prediction.
The 10-year Treasury note yield finished the week of 1/18 at 2.05% while the 30-year Treasury note yield was 2.83%.
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CDs and Mortgages - Interests Rates Fall Again
The 30-year fixed rate mortgage averaged 3.81% this week. This represents a decrease from last week when it averaged 3.92%. Last year at this time, the 30-year fixed rate mortgage averaged 3.63%.
This week, the 15-year fixed rate mortgage averaged 3.10%. This was down from last week when it averaged 3.19%. The 15-year fixed rate mortgage averaged 2.93% one year ago.
"The Freddie Mac mortgage rate survey had difficulty keeping up with market events this week," said Freddie Mac Chief Economist Sean Becketti. "The 30-year mortgage rate dropped 11 basis points to 3.81%, the lowest rate in three months. This drop reflected weak inflation - 0.7% CPI inflation for all of 2015 - and nonstop financial market turbulence that is driving investors to the safe haven of Treasuries. However, the survey was largely complete prior to Wednesday's Treasury rally that drove the yield on the 10-year Treasury below 2%, down 29 basis points since the end of 2015."
The money market fund finished the week of 1/18 at 0.3%. The 1-year CD finished at 0.6%.
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To model generosity inspires others to do the same. Thank you for your interest in the Foundation as we strive to partner with churches, ministries, and Christians around the world to fund the important work of God's Kingdom.
To access updated financial and gift planning information, please visit our website, www.nazarenefoundation.org. If you would like more information about your charitable giving options or about how a Foundation representative can visit your church, contact us by phone at (913) 577-2983 or by email at info@nazarenefoundation.org.
The Global Church of the Nazarene Foundation
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To model generosity inspires others to do the same. Thank you for your interest in the Foundation as we strive to partner with churches, ministries, and Christians around the world to fund the important work of God's Kingdom.
To access updated financial and gift planning information, please visit our website, www.nazarenefoundation.org. If you would like more information about your charitable giving options or about how a Foundation representative can visit your church, contact us by phone at (913) 577-2983 or by email at info@nazarenefoundation.org.
The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220, United States
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