What is a Charitable Gift Annuity?
A charitable gift annuity is a gift agreement between the donor and the Church. In exchange for your gift, the church agrees to pay one or more people -- often the donor and a spouse -- a set income each year for life. After the deaths of both income recipients, the money remaining in the gift annuity goes to your church.
Most people elect to receive their payments quarterly or annually. The amount of annual payment is based on the recipient’s age/s and the amount of your gift. Below is a sample table showing the annual payment rates. If the annuity is for a single individual the annual payments are naturally higher than they would be for a two-life gift annuity.
|Charitable Gift Annuity Rates|
|Effective to July 2010|
|65 years||5.3%||65 & 70 years||5.0%|
|70 years||5.7%||70 & 75 years||5.3%|
|75 years||6.3%||75 & 80 years||5.8%|
|80 years||7.1%||80 & 85 years||6.5%|
|85 years||8.1%||85 & 85 years||7.0%|
This “life-income gift” offers a current tax deduction and part of annual income is also tax free. It generates steady income every year – a big plus for retirees. The Diocese of Ohio offers gift annuities, so your investment dollars stay at home. For more information or for a personalized illustration call Lael Carter, Diocesan Development Officer, at 216-774-0463, or firstname.lastname@example.org.
Every annuity payment is backed by the assets of the Episcopal Diocese of Ohio. As of March 2010, total investments assets equal $33 million.
Benefits of a Charitable Gift Annuity?
Income for life: guaranteed, fixed, regular payments for one or two people.
Tax free income: in most cases, part of each payment to you is tax-free, which increases its after-tax value.
Tax Deductions: in most cases, you qualify for an immediate federal income-tax deduction, because you are making a charitable gift. Also, your estate will benefit from reduced estate taxes.
Appreciated stock: When you fund the gift annuity with appreciated stock, it is created with the full market value of the stock and the capital gains tax is deferred over your life expectancy.
Freedom from managing your assets: As donor you are guaranteed a regular income, free from concerns about whether the assets will go up or down in value – and there are no annual management fees.
Personal satisfaction: You are able to make a sizable gift to your church for the future and maintain, or even increase, your present income.
Are there other considerations?
Because there is some cost associated with set-up, a minimum gift annuity is $5,000 and 65 years is the minimum age when the annuitant may begin receiving payments.