A Charitable Gift Annuity is a simple way to generate lifetime income and potential tax savings in exchange for making a charitable gift.
Typically, after lifetime payments have been made to your designated income beneficiaries, the remaining principal of your gift annuity becomes part of The Foundation's Permanent Legacy Fund. Grants from this fund support emerging needs and seed new and innovative programs across the community. A portion of your gift annuity can also be used to create an Endowment Fund in your name at The Foundation.
Keep reading to learn more about:
- How a Charitable Gift Annuity Works
- Advantages of a Charitable Gift Annuity
- How Annual Income from Your Gift Annuity is Determined
- When Payments From Your Gift Annuity Begin
How a Charitable Gift Annuity Works
- To establish a Charitable Gift Annuity, you will need to sign a contractual agreement that we provide, and transfer at least $10,000 in cash or marketable securities to The Foundation.
- In turn, The Foundation guarantees a lifetime stream of fixed annuity payments to you or the income beneficiaries you choose.
- You can designate any one or two income beneficiaries including yourself, your spouse, even a non-family member.
- You may establish as many annuities as you wish, either at the same time or over a period of years, with the same or different income beneficiaries.
- Processing your agreement and transferring your assets can be accomplished quickly, usually within 48 hours.
Advantages of a Charitable Gift Annuity
- You can establish your gift annuity with cash or securities of at least $10,000.
- Regardless of when you schedule your payments to begin, you qualify for an immediate income tax deduction for a portion of your gift in the year that you make your gift.
- The older the income beneficiaries are when payments begin, the larger the tax deduction will be.
- If you can't use the entire income tax deduction in the current year, you can carry it forward up to five years.
- If you fund your gift annuity with marketable securities, you can also reduce and defer capital gains taxes.
- You can reduce estate taxes by removing assets from your estate.
- You and/or your designated beneficiaries receive guaranteed income for life, backed by the assets of the Jewish Community Foundation.
- Your payments may be partly an income tax-free return of principal.
- You can choose to have your annual income paid out once a year, twice a year, or quarterly. You can use this income to supplement your retirement plan.
- Your gift annuity establishes an Endowment Fund at The Foundation in your name which supports The Foundation's annual grants program. You can also designate an additional program or organization to benefit from your Endowment Fund.
How Annual Income from Your Gift Annuity is Determined
The amount of annual income is determined by two factors:
- The beneficiaries' ages when you establish the gift annuity (The younger they are when the annuity is established, the larger their annual payments will be.)
- The value of the assets you transfer to establish the gift annuity
Annual income can be paid out once a year, or in semi-annual or quarterly installments to you or your beneficiaries.
When Payments From Your Gift Annuity Begin
If the designated income beneficiaries are 65 or older when the gift annuity is created, annual payments can begin immediately.
If you want the income from your gift annuity to go to someone currently aged 45 to 65, you can create a Deferred Charitable Gift Annuity. With this type of gift annuity, each designated income beneficiary may begin drawing payments any time after his or her 65th birthday.
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Calculate how a charitable gift annuity can benefit you. |
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Calculate how a deferred charitable gift annuity can benefit you. |