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Charitable Gift Annuities

Charitable Gift Annuities

How a Gift Annuity Works – A gift annuity is an arrangement between an individual and a qualified charitable organization or institution.  The individual places appreciated assets or cash into the hands of the charity as a gift.  In return, the organization agrees to pay the donor or other designated individuals fixed payments from the donated assets for their lifetime or a term of years. 

      TAX BENEFITS.  The sale of appreciated property held in a Gift Annuity entitles the donor to a partial bypass of the capital gains tax.  As with a Unitrust, you are also entitled to a charitable income tax deduction in the year your gift is made.  Finally, a portion of each payment to you is tax-free.

      INCOME.  In addition to benefiting charity,  the Gift Annuity provides income for you at a rate determined by age and gift amount.  Another person may also benefit from the income payments—at the same time as you, instead of you, or following your death—so that your original contribution, in effect, gives twice.

      FIXED PAYMENTS.  The percentage rate of your payment is fixed when the annuity agreement is created, providing a dependable income that withstands the fluctuations of the economy or stock market.

Rates are established based on the recommended rates of the American Council on Gift Annuities, an independent organization which advises and consults on matters pertaining to life expectancies and related matters. The Council has a long and distinguished record in this area, and its suggested rates have long been recognized, not only by charities and donors, but also by state insurance departments and the IRS as being actuarially sound and in the best interests of all parties involved.

Last Modified on August 21, 2008 | Brethren in Christ Foundation, Inc. All rights reserved.