A Charitable Gift Annuity is a contribution made by a donor to a qualified charity that is part gift and part payment made in exchange for a life income for one or two persons.
Mary Jones is an 80 year old alumna of MSSU and wishes to make a gift to the Missouri Southern Foundation and receive an income for life. Currently she has a certificate of deposit valued at $25,000 that is coming up for renewal and she is not satisfied with the rates that are being offered by financial institutions.
Mary decides to transfer the amount of $25,000 to the Missouri Southern Foundation in exchange for a Charitable Gift Annuity. Mary receives payments for her lifetime based on an annuity rate for her age of 7.2 percent, which amounts to annual payments equaling $1,800. She also receives a current income tax deduction of nearly half the contributed amount. By establishing a Charitable Gift Annuity, Mary Jones was able to increase her annual income and ultimately provide a future gift of the annuity remainder to benefit MSSU.
This is only one example of how a Charitable Gift Annuity can be used to meet the needs of a donor. In all cases, donors should consult with their attorney, accountant, or estate planner when considering a charitable gift.