A gift annuity is an agreement between you and us. When a charitable gift annuity is in place, we agree to pay you fixed payments for your life (and/or the life of your chosen beneficiary). The amount of the annuity is based on the gift amount and age of the annuitant(s) at the time of the gift.
A gift annuity can be established with a modest contribution and provides a number of very attractive benefits. You can:
- fund it with cash or marketable securities
- qualify for an immediate income tax charitable deduction for the gift (subject to certain income limitations), and
- potentially spread out any capital gains tax liability.
What’s more, part of your annuity payment may be federal income tax-free for a certain number of years. As a donor, you can select the payment intervals (usually quarterly) and name the annuitant(s) - one or two persons.
Professionals and other highly compensated employees who frequently “max out” their annual retirement plan contributions because of restrictive rules and regulations may want to consider a deferred gift annuity strategy. Deferred gift annuities offer three important benefits:
- They can be used to supplement qualified retirement plan savings.
- You qualify for a current income tax deduction now during your high income years.
- You can postpone the start of annuity payments until later - usually after retirement begins.