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Charitable Gift Annuity

Charitable Gift Annuity

Our Charitable Gift Annuities give you a way to provide for your own - and your family's - financial future with a dependable, guaranteed lifetime income. Charitable Gift Annuities typically enjoy a higher rate of return than most conservative investments. And a Charitable Gift Annuity is never subject to market fluctuations. You'll know exactly what you will receive. Plus, part of your income can be tax-free!

Gift Annuities offer you significant benefits:

  • A new source of lifetime income, some of it tax-free.
  • Guaranteed security and high return.
  • A charitable income tax deduction that you can take this year.
  • A partial savings on capital gains tax if you give appreciated stock or other assets.
  • Reduced estate taxes and probate costs.
  • A larger charitable gift than you may have thought you could afford.

The Charitable Gift Annuity is a simple contract providing for the Foundation's payment to the donor (and an optional second beneficiary) of a fixed income for life in return for a contribution. The gift annuity offers donors the assurance of an income that will not fluctuate, a modest minimum gift of $10,000 and payments that are secured by all the assets of the Foundation.  

As an additional tax benefit, part of each income payment to you from the gift will be treated as the tax-free return of principal. In addition, if you funded your gift annuity with appreciated securities, a further portion of your income will be taxed at capital gains rates (20%).  

These tax reductions increase the effective yield of the gift annuity, and they are not available with other types of life-income gifts.  (The IRS provides that these benefits are in effect during your life expectancy - if you live longer, the entire gift annuity payment will be taxed to you as ordinary income.)  

The following questions and answers may help you better understand this financial planning vehicle.

What is a gift annuity?

A gift annuity is an agreement between an individual and a qualified charitable organization or institution. The donor transfers assets to the organization and receives fixed payments for the rest of his or her lifetime and/or the lifetime of another person, if desired.

Are there tax benefits?

Yes. Since a portion of your gift will be used for charitable purposes, you are entitled to a federal (and perhaps state) income tax deduction in the year you make your gift. Part of each payment is tax free for a period of years as well.

What determines the size of each payment?

A number of factors, including the amount you place in the gift annuity and your age at the time the annuity is created.

Why does my age affect the rate of payment I receive?

Part of the amount you transfer is returned to you over your life expectancy, and life expectancy changes with age. Generally, the older you are when your gift annuity begins, the higher your rate of payment.

Does that mean my payments change from year to year?

Not your rate of payment on a particular gift annuity agreement. The rate is set and fixed when your annuity begins. But if you give for additional gift annuities - as many people do - the rate will generally be higher for each agreement made in subsequent years.

What if I outlive my life expectancy?

One of the attractive features of the gift annuity is that they are designed with this possibility in mind. The gift annuity agreement requires that payments are to be made for a long as an annuitant (a recipient of payments) lives.

Are the payments affected by interest rate or economic fluctuations?

No. Payments are never lowered or raised regardless of changes in interest rates or the national economy. All net assets of the charitable recipient stand behind your agreement.

Exactly how can I benefit another person through a gift annuity?

You can designate a loved one to receive the payments either with you, instead of you, or only following your death. This can result in a double gift - one to the charitable entity and another to a relative or special friend.

Is the payment the same if more than one person receives payments?

Annuity payments may be made for the lives of as many as two persons. Since the period of their combined life expectancies is typically longer than one person's life expenctancy, the rate of payment will be somewhat lower. Payment rates for two-life annuities are available upon request.

Can I give securities rather than cash to set up a gift annuity?

Yes. Often the tax benefits are even greater if the securities have increased in value because you may avoid the tax on a portion of the capital gain in the property. If you give a low-yielding asset, you may be able to increase your income, since a gift annuity may pay more and be taxed more favorably than other income.

Will my gift annuities be part of my estate?

No. If payments are made to you only, the gift portion goes directly to the charitable recipient, thus avoiding estate taxes and probate costs. Some estate tax may be due if payments are made to a survivor other than a spouse.

Do I have to wait until I retire for the payments from a gift annuity to begin?

No, payments may begin anytime.

How can I begin a gift annuity?

A gift annuity can be created with a minimum of effort. The first step is to contact us. In less than one minute, you can give us the information we need to prepare a personalized Gift Annuity proposal designed especially for you. There is no cost or obligation, and your inquiry will be treated in complete confidence. Our services are also free. 

More Information

For more information on Gift Annuities, contact us via email or by calling us directly at (800) 780-0325.  We will gather some basic information and will then prepare a personalized proposal that will show you the specific benefits for you with our gift annuity.  If you like what you see, we can complete your agreement so quickly that you can begin receiving your annuity payments faster than you thought possible!  You can receive more information on planned giving options by visiting the planned giving section of our website