Charitable Gift Annuities are one of the most common options for deferred giving because of the significant benefits to you, the investor.
First, they provide a lifetime of income. Regardless of how long the beneficiary may live, the income from the annuity continues to be paid by Friends University. Second, the majority of the income – often 75% to 80% – is return-of-principle, and is therefore income tax-free. The remainder is attributable to growth or dividends of the original investment. While that portion is taxable, you still save because your income tax rate during the annuity period is likely lower than while you were working to save that money. Third, the annuity provides an income tax deduction which can be spread out over multiple years as needed. And lastly, the effective payout rate of the annuity is often dramatically higher than rates offered on CD’s or savings accounts.
As an example, a single $50,000 gift from an individual in their 70’s can create an income tax deduction of nearly $24,000 PLUS estimated lifetime income of $40,000 at an effective payout rate of 9.5% PLUS an estimated $50,000 gift to charity with no probate fees or estate taxes. That is a total $115,000 benefit from one $50,000 gift!
Call David Alexander – Associate Vice President of University Advancement at 316-295-5648, to see what the benefits would look like for your situation.
Charitable Gift Annuities Calculator
Friends University partners with Everence affiliate Mennonite Foundation for gift annuity administration. If you need help calculating your charitable gift annuities, please use the charitable gift annuities calculator. The remainder of a gift annuity goes to Friends University to support our mission to equip students to honor God and serve others.