That Livermore might long be known for its wonderful Opera!
Our Livermore Valley Opera has remained financially sound on an annual basis for all of its history. Now, we want to build a sound footing for the future and to enable greater artistic reach. To this end we encourage you to put our Opera into your estate plan. To quote two of our generous benefactors, “Your estate gift costs you nothing now, but will be of great benefit to the future of our Opera.” “It is a gift that keeps on giving.” “…LVO is special…it gets incredible quality from the money it has to spend.”
Especially if you have appreciated assets, such as real estate or stocks, which on your death may be heavily taxed, bequeathing some or all to LVO will both reduce the tax burden on your estate and will help ensure the future of an organization important to the community.
Your legacy gift can be directed either to our General Fund or to our Legacy Fund. The purpose of our legacy giving program in both cases is to provide long-term financial stability, artistic flexibility and enhancement, and capital acquisitions for production and staging. The General Fund will support the critical real-time operating needs, while the Legacy Fund will provide an income for the Opera over the long term. Scroll down to read the answers to the most often asked questions about legacy giving, and about our investment policy and our disbursement plans.
The simplest giving method is to set a fixed amount from your estate as a bequest to LVO. However, there are a variety of other ways to plan your gift. Some of these could provide you with income, and your estate with significant tax benefits, while providing a very generous ultimate gift to the LVO. Among the most popular methods are:
• Bequests, as mentioned above, preferably from IRAs and 401(k)s
• Donor advised charitable funds, with immediate tax deduction, but donations distributed over years and/or granted at the end of life
• Life income gifts: charitable remainder trusts, from which you (or another) can receive lifetime income with the remainder passing to the charity
• Charitable lead trusts, which distribute charitable gifts for a fixed period of time
• Gifts of appreciated investments and property
• Real estate gifts
• Life insurance gifts
We recommend that you consult experienced professionals to select and execute a plan best suited to your goals, but will be glad to discuss our experiences with you. Please contact T J Gilmartin at 925-449-3170 or email@example.com and let us know if you have set up a legacy donation so that we can include you in the Legacy League. Thank you.
Livermore Valley Opera is a 501 (c) 3 non profit organization – Tax ID: 94-3168895
- What is the purpose of your planned giving to our Legacy Campaign?
LVO’s operas bring a great deal of satisfaction to thousands of people in the Tri-Valley area. To preserve that cultural opportunity takes financial support both now and in the future so that our children, and their children, can enjoy it as well. Legacy bequests provide unique giving advantages since they allow the donors to provide financial support without impacting their present financial situation. Thus they do not have to worry about having enough money for their needs during their lifetime. In fact, it can even improve their financial security in some cases, and it ensures that their memory and generosity are carried on beyond their lifetime.
- What happens to bequests to LVO? What fund receives the money?
LVO has both an General Fund and a Legacy (or endowment) Fund. Donors may specify which fund they want for their bequests, including specifying part for one fund and part for the other. The General Fund is used for current operations (opera productions, opera events, and student education), while the Legacy Fund is intended to build sufficient capital so that the appreciation and income from it will help support productions in the future.
- What is the spending policy for LVO’s endowment fund?
LVO will withdraw nothing from the Legacy Fund fund until it reaches $100 thousand. From there, 1% or 2 % may be withdrawn according to a specified schedule (link 3 to Disbursement Plan). When the corpus reaches $1 million, the Board may specify withdrawals of up to 5% per year. Distributions during this initial growth phase will never exceed half of the annual earnings of the Fund, so that the fund keeps growing. At no time are any administrative or management fees taken from the Fund; so, there is no overhead cost and all gifts to that fund will go 100% for the purpose intended.
- Why is a gift to our Legacy Fund worthwhile?
Legacy Fund gifts keep on giving. Unrestricted gifts, which are essential to the company, are generally spent in the year they are given and then, even though they have helped provide pleasure to many people, they are gone. Legacy Fund gifts, although subject to market fluctuations, typically continue to grow indefinitely due to investment. Even after the fund reaches $1 million, and a small percentage is withdrawn each year, the earnings usually exceed that amount so the gift keeps increasing.
- How do we know endowment funds will be kept safe and invested wisely?
LVO’s funds are managed by an experienced professional under comprehensive legal standards. In California, nonprofit endowment funds are charitable trusts that are carefully regulated by statute, and by accounting rules, for investment, management’ and disbursement. (e.g., Probate Code §§ 18501-18510) Nonprofits, like LVO, are also required to report their activities and finances annually to the IRS (Form 990) and these reports are available to the public.
- Who are the potential donors who might include LVO in their estate plan?
LVO welcomes gifts of any size and is grateful for them all. LVO recognizes that people have many competing desires for their bequests, but preserving culture is an important goal for society and for us as individuals. Unlike many other worthwhile activities like medical research or social needs, opera gets very little government support and relies almost entirely on private funding to survive. Opera is one of the most rewarding forms of culture and deserves our support.
- Why should someone give to LVO instead of some other opera company?
LVO is the only opera company that serves the Tri-Valley area. We bring this wonderful art form to thousands of people in the area each year, and we bring arts education to more than 7000 school children in the area each year. Most of our audience, who enjoy opera through LVO, would otherwise be denied it as they will not travel to San Francisco or to other areas to see opera, and the school children in this area, who are provided musical education experiences, would be denied them without LVO. While opera is an expensive undertaking, LVO is exceptionally efficient with very low overhead, yet still puts on extremely high quality productions. We believe that no other opera company gives more “bang for the buck” than LVO.
The investment objectives of the Livermore Valley Opera (LVO) Legacy Fund were developed by the Legacy Committee in conjunction with the current and projected requirements to fulfill the mission of LVO. LVO recognizes and acknowledges that some risks must be assumed in order to achieve objectives of the Legacy Fund and that there are uncertainties and complexities associated with investment markets.
The objectives of the Legacy Fund are to:
- Emphasize the long-term growth of principal while avoiding excessive long term risk.
- Earn 4% to 6% return in excess of inflation with a low to moderate risk tolerance and a 10-year horizon.
- Provide sufficient liquidity to meet disbursement goals of the Fund.
Research suggests that asset allocation plays the dominant role in determining the long-term returns and risks in any investment portfolio. In light of the objectives, liquidity requirements, and risk posture of the Legacy Fund, LVO has established the following asset allocation guidelines:
The following seven asset classes were selected for investment consideration and ranked in ascending order of risk (least to most).
Intermediate or Short Term Government Bonds
Intermediate or Short Term Corporate Bonds
Large Cap Equities
Mid Cap Equities
Small Cap Equities
The Target Asset Allocation represents an individual, subjective, customized target percentage for the time horizon selected by LVO for each major asset class, based on historical market conditions, risk, reward and correlations.
A Current Asset Allocation represents decisions to overweight or underweight asset classes in the near-term relative to the Target Asset Allocation and should fall in the Target Asset Allocation Range. However in the initial stages of the Legacy Fund, it is anticipated that funds will be invested very conservatively (interest bearing securities) until a reasonable corpus is established (the Legacy Committee will establish this threshold). The Current Asset Allocation is dependent upon the overall economic and financial outlook and relative risk/return parameters and valuation levels for each asset class at a point in time. Over the time horizon of LVO, the Current Asset Allocation should on average be equal to the Target Asset Allocation.
Asset Class Targets
|Cash and Equivalents||3%||0%-20%|
The Legacy Committee may engage Asset Managers whose disciplines require investment outside the established Asset Allocation Guidelines. However, taken as a whole component of the aggregate funds, such disciplines must fit within the overall asset allocation guidelines established in this statement. If the Legacy Committee wishes to consider assets not approved in this policy, they may do so only with the approval of the Board of Directors. It is expected that the Asset Manager will propose rating guidelines within each Asset Class that will be discussed and agreed to by the Legacy Committee.
Purposes for Endowment Disbursement
The purpose of the Legacy Fund is to provide long-term financial stability, enhancement, flexibility, and capital acquisition for the Livermore Valley Opera. In order to promote the Legacy Fund, it is also useful to provide for the current benefit of our Opera. Thus, while the Legacy Fund’s primary goal is the build the Corpus of the Legacy Fund for the Opera’s long-term security, a secondary goal is to support our Opera on an ongoing basis, for the benefit of the Opera and as an incentive for donation, that is, to show donors immediate benefit to the Livermore Valley Opera from their donations to the Legacy Fund.
Legacy Fund Disbursement Guidance
Disbursement from the Legacy Fund to the General Fund is done at the end of the current fiscal year based on the value of the Corpus at the end of the prior fiscal year. The Disbursement never exceeds the Corpus’ current year investment gain, that is, does not decrease the Corpus from the prior year-end value. Current year donations are not included in the Corpus for the purpose of calculating the current year disbursable percentage. If the Fund Corpus incurs a loss from the prior year value, no disbursement occurs in that current year.
Gradation of Disbursements
If the Legacy Fund Corpus is less than $100,000 at the end of the current fiscal year, no disbursement is made.
If the Corpus is more than $100,000 at the end of the current fiscal year, but less than $500,000, 1.0% of the value of the prior year-end Corpus, not to exceed half of the Corpus’ current year earnings, is disbursable upon Board approval.
If the Corpus is more than $500,000 at the end of the current fiscal year, but less than $1,000,000, 2.0% of the value of the prior year-end Corpus, not to exceed half of the Corpus’ current year earnings, is disbursable upon Board approval.
If the Corpus is more than $1,000,000 at the end of the current fiscal year, but less than $2,000,000, 5.0% of the value of the prior year-end Corpus is disbursable upon Board approval.
If the Corpus is more than $2,000,000 at the end of the current fiscal year, 6.0% of the value of the prior year-end Corpus is disbursable upon Board approval.
Under emergency circumstances or in order to terminate the Legacy Fund, the LVO Board or the Board’s designated executor, consistent with the Board’s fiduciary responsibility, can disburse any amount of the Legacy Fund to meet the needs of the Livermore Valley Opera or to enhance the performing arts in Livermore.