Charitable Gift Annuities: A Win for Everyone
We’ve heard it is more blessed to give than to receive, but here’s a way you can give to support Global Ministries and receive at the same time.
It is called a charitable gift annuity, and it works very simply:
You make a gift of cash, stock, or property to Global Ministries, and in turn, Global Ministries provides you with a guaranteed income for life.
Below is an example of how a charitable gift annuity works:
Mrs. Smith, 79, is retired and living on her investments of CDs and other retirement plans. Her CDs are paying her 2.5% interest. Instead of renewing a CD when it comes due, she decides to enter into a charitable gift annuity agreement which will pay her a higher rate of return for the rest of her life.
In return for her irrevocable gift, she receives – for the rest of her life – an annuity payment of 6.9%. The payment rate is based upon the donor’s age (or age of other beneficiary) and is calculated through actuarial tables provided by the American Council on Gift Annuities (ACGA). The rate remains the same, and will not decrease or increase, during the lifetime of the beneficiary. To see information on current rates, you can find them on the ACGA website:
http://www.acga-web.org/2009ratesfeb/singlelifefeb09.html
When she enters into the gift annuity agreement, Mrs. Smith:
- Increases her income with higher payments than the interest she was receiving from the CD;
- Receives annual annuity payments for the rest of her life, with part of those payments being free of tax; and
- Receives a partial charitable income tax deduction.
If she had used appreciated stock (stock that shows a gain from the date of purchase) instead of CDs to fund the gift, Mrs. Smith also would have been able to bypass some of the capital gains taxes on the appreciation.
Mrs. Smith has the option of including a dependent adult relative (or other) as a second beneficiary to her gift annuity, who will receive the benefit after she dies. To see the ACGA rates on a two-life gift annuity:
http://www.acga-web.org/2009ratesfeb/twolifefeb09.html
If Mrs. Smith were younger and wished to defer her gift annuity payment until she is into her retirement, she can defer until a certain age. To see those ACGA rates:
http://www.acga-web.org/2009ratesfeb/factorsfeb09.html
But here’s the best part: Mrs. Smith named the Division of Overseas Ministries or Wider Church Ministries as the residual beneficiary. That means, at her death (or at the death of both beneficiaries in the case of a two-life gift annuity), the residual of the gift annuity will go to Global Ministries to further Critical Presence witness across the globe. This is a “win” for the donor and a “win” for the church.
Below are some of the many ways in which you can benefit from a charitable gift annuity:
- Increase your income. The rates are higher than those available currently from certificates of deposit (CDs), passbook savings accounts, and many stock dividends.
- Receive a partial charitable income tax deduction. The Internal Revenue Service designates a part of the annuity as a gift, so you receive a charitable income tax reduction for that portion, thus reducing your current income tax.
- Receive guaranteed annuity payments for the rest of your life and/or for the rest of the life of the person you might designate, with part of these payments being tax free.
- Avoid some capital gains taxes if using stock to make the gift.
- Avoid probate cost and estate taxes.
- And the best: Leave a legacy where you continue to enable Global Ministries’ witness of critical presence.
To learn more contact:
Office of Resource Development Office of Financial Development
Global Ministries Global Ministries
P.O. Box 1986 700 Prospect Avenue
Indianapolis, IN 46206 Cleveland, OH 44115
(317) 713-2555 (216) 736-3205
gifts@dom.disciples.org cornaccp@ucc.org
