There is no charge to establish a charitable gift annuity contract. However, the Community Foundation charges a 1% annual administrative fee to maintain the annuity over the contract lifetime.
As a simple contract between you and the Community Foundation, your payments become a general obligation of the Community Foundation that is backed by all of its assets.
Payments may be made to one or two beneficiaries or annuitants. In most cases the donors name themselves. However, an annuity can also be established to benefit others, such as a parent, sibling or friend. The Community Foundation does not set a minimum age limit for donors to establish a charitable gift annuity, however annuity payments cannot begin until the beneficiaries are at least 60 years old.
Payments will be determined at the time the annuity is established. The Community Foundation follows the maximum annuity rate schedule suggested by the American Council on Gift Annuities. The applicable rate will be based on the age of the youngest beneficiary or annuitant at the time the annuity is established.
The minimum gift for a donor to establish a first charitable gift annuity with The Community Foundation is $10,000.
Absolutely! When you enter into an annuity contract you will specify how the gift portion of your annuity will be used. After the contract terminates, the remainder can be added to the existing organization's endowment fund, or it can be used to create a new, named endowment fund for an organization of your choosing. All endowment funds will be held and administered by the Community Foundation.
Yes. You may receive a charitable deduction in the year you enter into an annuity contract for the gift that will remain for charity after your lifetime. In addition, a portion of your annuity payments may be tax-free, representing a return of the principal you contributed.
Yes. In fact, contributing highly appreciated securities that you have held for more than 12 months offer additional tax savings. You may reduce the tax on the capital gain attributable to the charitable gift portion of the contribution. If you are an annuitant, the gain attributable to the annuity payments does not need to be recognized in the year the gift is made but can be reported ratably over the annuitant’s life expectancy.
No. You can make a gift now for an annuity contract that will defer your payments to a future date that you decide. Because of the deferral, payments and charitable deductions from deferred gift annuities are higher than they would be for immediate-pay annuities.
A commercial annuity, typically sold by banks and life insurance companies, will provide you with fixed or variable income based on commercial rates of return. These plans establish their annuity payments based on the assumption that all of the assets in the plan will be used up by the end of the income beneficiaries’ lives.
A charitable gift annuity is part guaranteed annuity and part charitable contribution. You receive a partial income tax deduction based on the assumed value of the gift the charitable organization will ultimately receive. A gift annuity assumes that there will be something left for the organization at the end of the contract. The rates for gift annuities often cannot compete with the rates offered by commercial annuities due to the charitable intention of the contracts. However, charitable annuities may result in tax benefits that a commercial annuity cannot provide.
Information presented on this page is not offered as legal or tax advice. Donors are encouraged to consult with their personal advisors.