Charitable Gift Annuities
Goal: Receive guaranteed fixed income that is partially tax-free
Benefit: Current and future savings on income taxes, plus fixed, stable payments
Connie and Burton had been married for forty-seven years. Not long
before he died, they looked into converting some of their certificates
of deposit into a charitable gift annuity. They met with their advisors
and found out it was a wonderful idea.
Connie: We met with our tax advisor and looked at the
idea. When I saw the income we would have for the rest of both of
our lives and compared to what we were receiving from our CD's,
I was amazed! Plus there were tax benefits that helped us immediately.
And now, I don't have to do a thing - it's all taken care of.
The development officer explained how they
could use our support and what it meant to them. It was something
Burton and I did together, and I'm happy; really happy we did it
when we could do it together!"
A charitable gift annuity can provide tax benefits now and a lifetime income for the donor
and a beneficiary if desired. Perhaps also it brought peace of mind
to Burton knowing that Connie would have the resources she needed
if he was no longer there.
A deferred gift annuity is a variation on a gift annuity.
A gift is made and the charitable organization promises in return
to pay you an income stream that begins on a future date you specify.
Since the payments do not begin for a period of time, the fund will
grow without withdrawals until the payments begin. With more money
in the fund once payments begin, the payments will be larger than
with a comparably-sized immediate annuity.
A flexible deferred gift annuity allows you to pick a range of dates when the annuity payments will begin. For example, you might choose to begin quarterly payments on March 31st of any year not earlier than five years from now or later than ten years from now. The payment amount will be based on the year you choose in the future to have payments begin. The charitable gift deduction is based on the earliest possible beginning date (five years from now in this case) and is taken in the year of the gift, subject to your tax circumstances.
An attractive benefit of this arrangement is that it enables a
donor to make a gift now and take a charitable income tax deduction
now while in a high tax bracket. Income may be deferred, for instance,
until after retirement, when the rate of tax will presumably be
lower. Deferred gift annuities are creative ways to delay income
to pay for children's or grandchildren's college expenses, supplement
your retirement income, or assist with assisted-care living arrangements
that may be inevitable.
A part of each payment, as in any gift annuity, will be tax-free
for a period of years. However, the precise amount of each payment
will depend on the tax rules in effect when the payments start.
Deferred and gift annuity payments cannot begin until one year from
the gift date.
Charitable gift annuities are the gifts that keep on giving. Rates
on charitable gift annuities are based on age and whether the contract
is immediate or deferred. If you would like an illustration of this
life income to address your particular situation, please click
here and fill out the response form and send us the appropriate
information. To look at some specific rates on current gift annuities, click
here. A generic
example of a charitable gift annuity is available as well as
Return to Legacy Gift Options.