Considering A Charitable Gift Annuity?
Act Before June 30 for Higher Annuity Rates and to Assist Adopt a Doctor
If you’re considering funding a charitable gift annuity (CGA) – through the Foundation or another charity which accepts them – you may want to do so by the end of June. As of July 1, gift annuity payouts will be lower.
A CGA is defined by the American Council on Gift Annuities as “a way to make a gift to your favorite charity, and still receive an income for yourself or others…in return for a transfer of cash or other property (the charity) agrees to pay a fixed sum of money for a period measured by one or two lives.”
What will the lower rate mean? Although payments are based on a number of factors – including the value of the contribution, the number of annuitants, and the age(s) of the annuitant(s) – here’s one example:
A 70-year-old funds a $25,000 single annuitant CGA. If he does so by June 30, he qualifies for a 6.5% annuity rate, providing $1,625 a year. If he waits until July 1 or later, the same CGA will have an annuity rate of 6.1% and resulting payments will be $100 less every year for the remainder of the annuitant’s life. (The downside? The amount of the charitable tax deduction also declines on July 1, in this case from $9,038 to $7,991.)
For more information, including the numerous benefits to this type of planned gift, see Charitable Gift Annuities on the Rhode Island Foundation website and/or contact Ray Rickman at (401) 421-0606 or ray@adoptadoctor.org.
