WHAT IS A CHARITABLE GIFT ANNUITY?
A charitable gift annuity (CGA) is an agreement between a donor and a charity in which the donor makes a significant gift (usually cash or appreciated stock) now. In return, the charity agrees to make payments to one or more beneficiaries for the remainder of an annuitant's life.
Most commonly, the donor is also the annuitant and beneficiary - meaning the same person makes the gift and receives lifelong payments. However, the donor may designate anyone of their choosing to be the beneficiary.
There may also be two annuitants (such as the donor and their spouse). In this case, the payments from the charity continue until the death of both annuitants.
ADVANTAGES OF A CGA
1) Guaranteed, predictable lifelong income - CGA payments are guaranteed regardless of the performance of the markets.
2) Satisfaction of making a significant gift in your lifetime - The most significant gift that most donors are able to make is a bequest which is paid out by their estate. With a CGA, the asset transfer happens in your lifetime so you will be acknowledged for your generosity while you are alive.
3) Potential tax savings - A CGA gift can be funded using a variety of assets such as appreciated securities, a Qualified Charitable Distribution from an IRA or a cash windfall. The CGA gift is partially deductible and a portion of the annuity income is tax-free for several years.
4) No attorney fees or changes to estate planning documents - Some legacy gifts require significant involvement of an attorney and other parties, adding cost which decreases the impact of the gift. While we encourage donors to seek legal and financial counsel for every significant philanthropic decision, a CGA agreement is straight-forward and is administered by the charity. Every dollar given is part of the CGA principle which produces income.
CGA REQUIREMENTS
The CGA gift minimum is $10,000. Annuitants must be at least 65 years of age. There are no restrictions on who can donate to fund a CGA or who they choose as benficiary.
HOW CGA RATES OF RETURN ARE SET
The rate of return for each CGA depends on the number and age of the annuitants and the rates in effect at the time of the gift. Rates are set by the American Council on Gift Annuities.
FOR MORE INFORMATION OR TO GET STARTED
We can provide you with a quote for a CGA based on your situation. The quote will show the payments to be received by the beneficiary as well as the tax-deductibility of the CGA gift itself and the tax-deductibility of the beneficiary's CGA income.
To request a quote, fill out this form or contact Mark Cotleur, senior vice president of fund development, at 216-696-8401 or mcotleur@sistersofcharityhealth.org.