Charitable Gift Annuity
Give and Receive Income with a Charitable Gift Annuity
A gift annuity is a straightforward contract in which you make a gift and in exchange receive payments for life. These secure payments are fixed in amount and will not vary with market fluctuations. The amount of the payment depends on your age at the time you set up the gift annuity. This is one time when age is a benefit: the older you are, the higher the payment.
There are some tax advantages in addition to the annuity payments. You receive an income tax charitable deduction at the time the annuity is funded, which could potentially help you save on your income taxes. In addition, part of each annuity payment usually is not subject to income tax (it is tax-free). At the end of the gift annuity term, the remaining amount is then used by the Adler School towards its most pressing needs.
How it works:
- You can fund the gift with cash, securities, or property.
- With a gift annuity, you simultaneously make a charitable gift and provide lifetime payments to yourself and/or another person.
- The size of the payments depends on the amount contributed, as well as on your age. The older the annuitants are when the annuity starts, the larger the payments.
- Your payments are fixed in amount, meaning they will never change, no matter what happens to interest rates or the stock market.
Charitable Gift Annuity Example:
- Josephine age 72 contributes $25,000 cash.
- The Adler School pays her fixed payments of $1,350 annually for life.
- $994 of each payment is tax-free for 14.5 years.
- She receives an income tax deduction of $10,599 in the year of the gift.
Sample Annuity Rates*
Minimum gift amount is $10,000 and the minimum age is 60 years old.
*Based on rates recommended by the American Council on Gift Annuities (subject to change).