Charitable Gift Annuity FAQs
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Q: What is a gift annuity?
A: A gift annuity is an agreement between an individual and a qualified charitable
organization or institution. The donor transfers assets to the organization and
receives fixed payments for the rest of his or her lifetime and/or the lifetime of
another person, if desired.
Q: Are there tax benefits?
A: Yes. Since a portion of your gift will be used for charitable purposes, you are
entitled to a federal (and perhaps state) income tax deduction in the year you
make your gift. Part of each payment is tax free for a period of years as well.
Q: What determines the size of each payment?
A: A number of factors, including the amount you place in the gift annuity and your
age at the time the annuity is created.
Q. Why does my age affect the rate of payment I receive?
A: Part of the amount you transfer is returned to you over your life expectancy, and
life expectancy changes with age. Generally, the older you are when your gift
annuity begins, the higher your rate of payment.
Q: Does that mean my payments change from year to year?
A: Not your rate of payment on a particular gift annuity agreement. The rate is set and
fixed when your annuity begins. But if you give for additional gift annuities-as many
people do-the rate will generally be higher for each agreement made in subsequent
Q: What if I outlive my life expectancy?
A: One of the attractive features of gift annuities is that they are designed with this
possibility in mind. The gift annuity agreement requires that payments are to be
made for as long as an annuitant (a recipient of payments) lives.
Q: Are the payments affected by interest rate or economic fluctuations?
A: No. Payments are never lowered or raised regardless of changes in interest rates or
the national economy. All net assets of the charitable recipient stand behind your
Q: Exactly how can I benefit another person through a gift annuity?
A: You can designate a loved one to receive the payments either with you, instead of
you, or only following your death. This can result in a double gift-one to the
charitable entitity and another to a relative or special friend.
Q: Is the payment the same if more than one person receives payments?
A: Annuity payments may be made for the lives of one or two persons. Since the
combined period of their life expectancies is typically longer than one person's life
expectancy, the rate of payment will be somewhat lower. Payment rates for two-
life annuities are available upon request.
Q: Can I give securities rather than cash to set up a gift annuity?
A: Yes. Often the tax benefits are even greater if the securities have increased in
value because you may avoid the tax on a portion of the capital gain in the
property. If you give a low-yielding asset, you may be able to increase your income,
since a gift annuity may pay more and be taxed more favorably than other income.
Q: Will my gift annuities be part of my estate?
A: No. If payments are made to you only, the gift portion goes directly to the
charitable recipient, thus avoiding estate taxes and probate costs. Some gift or
estate tax may be due if payments are made to someone other than a spouse.
Q: Do I have to wait until I retire for the payments from a gift annuity to begin?
A: No. Payments may begin anytime.
Q: How can I begin a gift annuity?
A: A gift annuity can be created with a minimum of effort. The first step is to contact
the Foundation at 770-449-6726, 877-220-5664 or email@example.com to request current
rates and a gift annuity application.