The Charitable Gift Annuity
A way to support Gospel for Asia . . . and receive regular, fixed annuity payments for life.
A Charitable Gift Annuity (CGA) is part charitable gift and part annuity. Funded by your contribution of money or stock shares, a CGA provides fixed annuity payments to you (and/or someone else you designate) for life—and a gift to GFA. A portion of your contribution is tax-deductible in the year the CGA is funded, and a portion of the annuity payments are tax-free.
What are the benefits of a CGA?
- Immediate Tax Deductions. You generally qualify for an immediate tax deduction for the gift portion of your CGA, and you avoid some capital gains tax when your CGA is funded with appreciated stock or mutual fund shares.
- Fixed Income for Life. A CGA produces fixed payments for life with rates generally much higher than CDs that don't fluctuate with the stock market. A portion of the income is often tax-free.
- Easy to Set Up. Unlike a trust, you may establish a CGA without a lawyer, although it is always a good idea to consult with your professional advisor(s) first.
- Impact. Many people in Asia will experience the love and grace of Jesus through the gift portion of your CGA.
- Removes Assets from Your Taxable Estate. The amount used to fund a CGA is no longer part of your taxable estate, which could help you reduce or avoid estate taxes.
CGAs can be funded with cash or publicly traded securities for a minimum investment of $10,000. You may choose to receive payments for one person or two people immediately, or you can defer payments to a future date. The minimum age to start receiving payments is 50.
Payout rates are determined by the American Council on Gift Annuities. They increase with age and with the length of deferral. The payout rate is set at the time of your CGA is funded and will not change.
How much will go to Gospel for Asia?
The recommended annuity rates for a CGA are computed using the assumption that, on average, approximately 50 percent of the initial gift amount will remain for charity when the annuitant dies (if the annuitant lives to the average life expectancy). If the CGA is reinsured, the 50 percent assumed remainder value (future value) is discounted back to today's dollars (present value) and made available for GFA to use immediately.
Is a CGA safe?
Charitable Gift Annuities to benefit GFA are administered by the National Christian Foundation (NCF). NCF issues CGAs on our behalf. NCF's commitment to pay your annuity is a legally binding contract, and since 1998, when their first CGA was issued, they have never missed an annuity payment. They have an extremely careful and prudent investment policy that provides maximum security for all of the CGAs they issue, and CGAs are typically reinsured for even greater security.
A Charitable Gift Annuity Example
Mark and Katherine were both 75 years old, retired, and troubled by the volatility of the stock market and 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 GFA and planned to do so through their will.
When they learned about a Charitable Gift Annuity, they funded one with a $25,000 check. They received an immediate tax deduction for a portion of the funding amount, and based on their age and life expectancy, they will receive fixed payments of $1,250 per year for the rest of their lives (5% of $25,000). This is a higher percentage than they were earning on their CDs and money market funds.
Mark and Katherine qualified for a charitable gift tax deduction of $10,840 when they funded the CGA, and $863.75 of each payment will be tax-free for the next 16 years. These combined tax savings gave them an effective payout rate of 6.8%.
Because the CGA was reinsured, GFA received an immediate donation of $3,792 to further the work in Asia, which Mark and Katherine requested to be used for Jesus Wells.
Would you like to make a lasting, far-reaching impact for the Lord's work?
Would you like to receive regular, fixed payments for the rest of your life?
Would you like payments to go to your spouse, parents, children or a friend?
Would you like to remove assets from your taxable estate?
Are your CDs and money market returns lower than you would like?
Are you concerned about the fluctuating stock market?
If the answer to any of these questions is YES, then a Charitable Gift Annuity may be right for you.
For more information:
If you have any questions or would like to request a personalized CGA illustration, calculated according to your situation and wishes, use this contact form, email email@example.com or call us at 1-800-946-2742.
All gifts are subject to Gospel for Asia's Gift Acceptance Policy.
DISCLAIMER: This information is designed to provide information and illustration of the subject matters covered. It is not intended, nor should it be used as legal, accounting or other professional advice. It is always a good idea to seek legal and tax advice from your professional advisor(s).