Glossary

Appreciated Securities: Assets that have a higher market value than their basis or tax cost, which, when sold, would generate taxable capital gains. Donors can avoid paying capital gains taxes by gifting appreciated assets to Earlham.

Basis: The tax cost of the property or asset used to determine the amount of capital gains if the property or asset is sold.

Beneficiary: A person and/or organization that receives benefits from a trust.

Bequest: A transfer, by will, of property such as cash, securities, and tangible property to an individual or organization, such as Earlham College.

Campaign: Purpose and Passion: The Campaign for Earlham is a comprehensive initiative with a goal of raising $60 million by 2010.

Charitable Gift Annuity: A contract under which a gift by a donor is made to a charity, such as Earlham College, in exchange for guaranteed payments of a fixed dollar amount (annuity) to the donor for life. The remainder of the money goes to the charitable organization at the donor's death.

Charitable Lead Trust: An irrevocable trust that provides for payments to charitable organizations, such as Earlham College, for a stipulated period of time.  At the end of the trust term, the trust assets go to a designated individual.

Charitable Remainder Trust: An irrevocable trust that provides for the payment of a defined amount to designated beneficiaries. A charitable remainder trust may be either a charitable remainder annuity trust or a charitable remainder unitrust.

Charitable Remainder Annuity Trust: Provides for the annual payment of a fixed dollar amount (an annuity) to the noncharitable beneficiary(ies). The annuity amount, once established, cannot change and it must be at least five percent of the initial net fair market value of the property placed in the trust. Additional contributions to an annuity trust after the initial funding are expressly prohibited.

Charitable Remainder Unitrust: Provides for the annual payment of a fixed percentage of the annually determined net fair market value of the trust principal to the noncharitable beneficiary(ies). The unitrust amount therefore fluctuates each year based on the fair market value of the trust principal. Additional contributions may be made to the unitrust.

Circle of Friends: Earlham’s planned giving society, established to recognize alumni and friends who have invested in the future of Earlham College and/or Earlham School of Religion through planned gifts.

Earlham Fund: The College's unrestricted annual fund, used to meet the most pressing needs. Gifts to the Earlham Fund are generally expended within 12 months. Contact Kevin Klose at 765/983-1622 or by e-mail.

Endowment: Money from bequests or outright gifts to Earlham College that is invested in perpetuity to produce amounts to be distributed according to the endowment spending policy. Distribution of earnings coincides either with the donor's wishes or, if there is no restriction on spending the earnings, at the discretion of the College.

Estate: The total assets of a deceased person.

Executor: The person or institution nominated in a will to carry out the terms of the will.

Expendable Funds: Funds that can be spent in their entirety in a manner consistent with the intentions of the donor; funds not deposited in an endowment fund.

Fiscal Year: The 12-month financial period for Earlham College beginning July 1 of each year and ending June 30.

Grant: Generally an allocation from a foundation, corporation, or government agency.

Living Trust: A trust created for the trustor and administered by another party while the trustor is still alive. A living trust, which can be either revocable or irrevocable, avoids probate and therefore allows assets to be distributed significantly more quickly than by a will.

Gift: A voluntary, irrevocable, unconditional transfer of an asset.

Gift-in-kind: A gift of a non-monetary item of tangible personal property such as art, collectibles, books, equipment and other physical assets which have value to Earlham College.

Matching gift: A gift made to Earlham with company or corporate foundation funds that matches commitments made by a company's eligible employees.

Memorial gift: A gift made to Earlham in memory of someone, as designated by the donor. Upon request, the college will notify the appropriate family members of memorial gifts.

Online gift: A gift or pledge payment made electronically to Earlham through the Internet. Earlham partners with contribute.com to provide secure online giving.

Outright gift: The current transfer of a gift to the College.

Planned Giving: The integration of personal, financial and estate planning concepts with the individual donor's plans for lifetime or testamentary giving. Contact Kim Tanner at 765/983-1631 or by e-mail.

Pledge: A signed and dated legal commitment to make a gift to Earlham over a specified period, payable according to terms set by the donor. This usually does not exceed five years.

Pooled Income Fund: This fund allows gifts from separate donors to be commingled in a single trust. In return, each designated beneficiary receives a proportionate share of the net income earned by the fund annually.

President’s Circle: Earlham 's recognition program for those who give $1,500 or more to the College during the course of one fiscal year.

Probate: The legal process of proving a will or having it declared valid and effective. The term is also used loosely to refer to the entire process of probate, administration and distribution of the testator's estate under the terms of the will.

Restricted gift: A gift to Earlham College with a specified purpose clearly stated by the donor.

Unrestricted gift: A gift to Earlham that is given without any restrictions on its use.

Will: Normally a legally executed written instrument by which a person makes disposition of his or her property to take effect after death.