Example: Joe and Donna T expect to have taxable income of about $250,000 in 2008, which puts them in the 33% federal tax bracket. They decide to make an unrestricted gift of $20,000 to support our operating budget this year.

Result: This gift saves Joe and Donna $6,600 in federal income tax ($20,000 x 33%). Note: They may be able to save state income tax as well.

Example: Karen B makes a gift to us of stock worth $50,000 purchased seven years ago for $12,000.

She is allowed a deduction for the stock's full $50,000 value, which saves her $16,500 in her 33% bracket. In addition, Karen avoids $5,700 in capital-gain tax she would have owed had she sold the stock. Total savings: $22,200.

Example: Frank J wants to make a gift to us of a parcel of undeveloped real estate worth $300,000. He sells the land to us for $100,000 to recover his original investment.

Results: Frank can claim a charitable deduction for the difference between the full fair-market value of the land and the amount he receives in payment ($300,000 - $100,000). This $200,000 deduction saves Frank $70,000 in his 35% tax bracket.

Frank will have to report a capital gain of $66,667 (one-third of the $200,000 gain) and pay capital-gain tax of $10,000. But he will avoid tax on the other two-thirds of his gain, saving $20,000 in capital-gain tax.

There are special rules that apply to certain types of property. Be sure to check with your tax advisor as you plan your year-end giving.

For instance, if you make an initial $100,000 contribution and are in the 35% federal tax bracket, your gift can compound into more than $150,000 of benefit to in just four years. How? Each year, you simply use the previous year's tax savings to fund the next year's gift.

Collectively these are called life-income gifts. There are various options available to generate income for life; one of the most popular and versatile is the charitable gift annuity.

The amount of income from a gift annuity depends on the amount of the contribution and the age(s) of the beneficiary(ies).

Example: Several years ago when the IRS discount rate was 6.2%, Robert took out a $100,000 gift annuity with and we promised to pay him $7,000 annually for his lifetime. He also received a charitable deduction of $36,519 and saved $14,279 in taxes at that time.

Robert is now 75 years old and no longer needs the annuity income we are paying him. He wishes to give up his right to receive the payments and inquires about the tax consequences.

At the current IRS discount rate of 4.2%, the present value of his right to receive $7,000 a year from us is $57,630. Had the discount rate stayed at 6.2%, the value would have been $51,187—substantially less.

By giving up the annuity income, Robert will be entitled to an equivalent charitable deduction of $57,630 that will save him $20,171 in taxes this year. This means Robert is able to make a $100,000 gift to us at a cost of only $16,550 ($100,000 less [$34,450 total tax savings + $49,000 income over the last seven years] = $16,550). And we will be able to use the released funds immediately.

This is a potent planning strategy at any time; but, as with a gift of an income interest, it is even more valuable when the IRS discount rate is low.

Example: Dave and Sharon, both 72, are entitled to a deduction for 2008 of more than $214,000 for a gift of a remainder interest in their $500,000 home at the prevailing IRS 4.2% discount rate. In their 35% tax bracket, this saves them more than $75,000; and they are able to remain in their home for the rest of their lives.