Are you charitably inclined, and would you like to have a fixed income stream for life, be able to take advantage of certain tax benefits, and continue to care for your community during your lifetime and beyond?
Then a Charitable Gift Annuity (CGA) may be right for you.
There are several reasons for the popularity of CGAs, particularly among donors of retirement age. They are a secure way to receive income and attractive tax benefits, while being charitable at the same time. And, in the current economic climate, CGAs often pay higher returns than CDs and savings accounts.
How does it work?
In exchange for a gift of cash or marketable securities, the Community Foundation agrees by contract to pay an annual fixed amount to one or two beneficiaries (the annuitants) for life. The amount of the annuity payment will depend on the ages of the annuitants and the value of the assets donated.
The Community Foundation offers the rates suggested by the American Council on Gift Annuities, a national organization that promotes responsible philanthropy. Payments may begin the same year that the gift annuity is established or be deferred until a later date. The donor may also be entitled to an immediate charitable income tax deduction the year the gift is made.
At the death of the last annuity recipient, the Community Foundation will direct the remaining assets to the endowed Community Foundation Fund as designated by the donor.
What are the benefits?
- A fixed income stream for life
- Secure payments, backed by the Community Foundation’s assets. (In some cases, the Community Foundation may choose to insure the gift with an outside firm.)
- A portion of the initial gift may be tax-deductible
- A portion of the payments may be tax-free
- Estate tax liability may be reduced
- Portfolio diversification
- Reduction of capital gains spread out over the annuitant’s life expectancy, if the gift is made with appreciated securities
- The charitable remainder of the annuity will be used for the long-term benefit of our community.
How do I get started?
For more information about charitable gift annuities, including a detailed illustration of the potential payout and tax treatment, email Chris Riker, Vice President of Advancement & Donor Services at firstname.lastname@example.org, or call 616-842-6378.
The GHACF does not provide tax advice. Please contact your Professional Advisors to see if a CGA is right for you.