Find Security with a Charitable Gift Annuity


One of the most time-honored ways to make a charitable gift is a charitable gift annuity. Perhaps the first charity to employ the gift annuity with its constituents issued the first U.S. gift annuity in 1843. While gift annuities have been available for over a hundred years, there are now many creative options for structuring gift annuities based on your individual needs and desires.

Thousands of people have a passionate concern for their favorite charities, yet recognize that they need future income. Some need income for life and others short-term, until other retirement resources become available. The charitable gift annuity offers a unique opportunity to serve each of these goals admirably.

A gift annuity is a plan that provides fixed income for life and leaves a lasting gift to charity. The gift annuity is essentially a contract. An individual transfers assets to charity in exchange for the charity’s promise to pay a fixed stream of income for life. The income can be quite high depending on the person’s age. Best of all, a portion of the income stream may be tax-free.

The tax benefits of a charitable gift annuity are numerous. Many individuals own appreciated securities or a personal residence that if sold would result in high capital gains tax. For a gift of appreciated property, bypass of significant capital gains is an important benefit. The most obvious benefit in the year the gift is made is the charitable deduction the individual receives for the value of the present gift made to charity.

Several types of assets may be gifted in exchange for a charitable gift annuity. A cash gift is an excellent way to fund a gift annuity and receive a large portion of the annuity income tax-free. The partial capital gains tax bypass is an attractive benefit for a gift of appreciated securities to fund a gift annuity. A portion of the income stream will be taxed at the lower capital gain rate in addition to possible tax-free income.

Highly-marketable real estate may also be gifted to provide fixed income for life. Income may also include capital gain and tax-free amounts. Please contact the Foundation for Community Care for more information if you are interested in this gift option.

There are a number of ways to structure the gift annuity payout to meet an individual’s needs. An individual desiring current income may transfer property for fixed income beginning in the year of the gift. The payout may be made monthly, quarterly, semi-annually or annually depending on the individual’s needs and desires.

A deferred gift annuity is another good option for individuals who are planning for the future, but not yet ready to retire. The charitable deduction may be taken at the time that the gift is established. The individual may designate a future date to begin receiving income. Rates will be higher with this plan because of the deferral. For individuals who are uncertain about when to retire, there is also the option to establish the gift annuity now and take a current deduction while maintaining a flexible future retirement date.

It’s obvious that gift annuities provide a variety of options to meet an individual’s unique needs. The benefits of a gift annuity are apparent – fixed income for life, bypass of capital gain and a lasting gift to charity. For more information on creative options for gift annuities to meet your needs, please visit the Foundation for Community Care at 221 2nd Street, Sidney, MT, our website or give us a call 406-488-2273. We look forward to helping you.


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