Charitable Gift Annuities
Maximizing Income While Serving the Poor or Homeless
Why gift annuities?
• Guarantees the participant income for life.
• Gives significant support to the participants' charity of choice.
• Provides some tax advantages and deductions.
• Safe and financially stable.
Understanding Gift Annuities
There are three different types of CGA’s: Single – Life Gift Annuities, Two – Life Gift Annuities, and Deferred Annuities. Although there are three different types of annuities, all three have the same foundational benefit of a guaranteed income for life.
Mark and Katherine were both 75 years old, retired, and troubled by the drop in their income as a result of lower interest rates on their fixed-income investments (CDs, bonds, and money market funds). Still, they wanted to support charities through financial giving and planned to do so through their will.
Then they learned about a CGA with City Union Mission. They started a CGA by funding it with a $25,000 check. They received an immediate tax deduction for a portion of that gift, and based on their age and life expectancy, they received fixed periodic payments of $1,250 per year for life (5.0% of $25,000). About 80% of each payment was tax-free.
Even better, their CGA worked in tandem with their Giving Fund (donor-advised fund) with us. Money from the CGA went into their Giving Fund, from which they could recommend gifts to their church and favorite charities – even after their death.
• They received $1,250 per year in fixed, periodic payments – partially tax-free – for the rest of their lives.
• During Mark and Katherine’s life and even upon their death, money from the CGA went to their church and favorite charities.