Charitable Gift Annuity

ways to give (web)A charitable gift annuity is a way to make a gift to Foxcroft Academy and receive guaranteed income either for yourself or another for life. In exchange for a gift of cash or certain other property, you or a loved one would receive set payments annually, a portion of which would be tax-free. In addition, as the donor you would be entitled to a charitable income tax deduction. The amount of your deduction would be based on the value of your gift and the age of the designated annuitant. The actual amount of the annuity depends in large part upon the age of the annuitant. Generally speaking, the older the annuitant, the larger the annuity. For example, as of this writing, a 65 year-old annuitant would receive a 6.7 percent annual payout, whereas a 75 year-old annuitant would receive a 7.9 percent annual payout. A portion of each annuity payment is considered to be a return of principal and thus treated as tax-free.

Payments on a deferred charitable gift annuity do not start on the date of the gift. Rather, they are deferred, often until retirement. The deferred charitable gift annuity is attractive to younger donors interested in supplementing their retirement income. An income tax charitable deduction is available on the date the deferred charitable gift annuity is established. As with a current gift annuity, a portion of each annuity payment is considered to be a tax-free return of principal.

A deferred charitable gift annuity can complement other retirement plans. Because of the deferral period, it offers a higher payout rate than a current gift annuity. A particular advantage of a deferred gift annuity is that it can be tailored to one’s particular circumstances. The start of the payments can be postponed until a mutually agreeable date.

The minimum amount needed to fund a charitable gift annuity, whether current or deferred, is $10,000.

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