A charitable gift annuity is a practical and generous way to make a meaningful charitable gift. You receive lifetime fixed income payments and tax benefits that contribute to your future well-being. A gift annuity can be an excellent means of providing for the long-term financial need of a spouse, relative or friend. The same income payment continues after the first annuitant is no longer living.
A charitable gift annuity is a simple contract. In exchange for your irrevocable gift of cash or appreciated securities, you receive a fixed income for one or two designated annuitants for life. The payment rate is dependent on your age(s). Older donors can find this to be a very attractive option. Income payments may be received annually, semiannually or quarterly. If preferred, the donor may delay income or take partial income and these options are called deferred and flexible charitable gift annuities.
The gift annuity matures at the death of the last surviving income beneficiary and the gift principal remaining in the contract is transferred to Frederick Living as designated by the donor(s).
Frequently Asked Questions
At Frederick Living, a charitable gift annuity contract can be written for $10,000 or any higher amount.
No, the payment rate is set permanently when you make the gift and will continue unchanged throughout the lifetime of the annuitant(s).
Part of the gift value qualifies as a charitable tax deduction in the year of the gift (and up to 5 years hence.) In addition, a portion of the annuity incomes received each year is tax-free until the annuitant(s) life expectancy is outlived. Each year beyond this time, the entire payment is reported as ordinary income.
What is the payment rate based on? All gift annuity rates are based on the age of the annuitant(s) and are set by the American Council of Gift Annuities.* A two-life annuity provides for a slightly lower rate than a single life annuity. Here are sample single-life gift annuity rates for immediate payment:
| Age | Rate |
|---|---|
| 70 | 5.3% |
| 75 | 6.0% |
| 80 | 7.0% |
| 85 | 8.1% |
| 90 | 9.1% |
*This sample illustration is based on American Council of Gift Annuities rates for a single person set July 1, 2022.
The capital gains tax is avoided in part on appreciated property gift assets. Part of the gain is allocated to the charitable gift amount and there is no capital gains tax on that portion. The balance of the gain is allocated to the gift annuity and is taxed each year over the projected life expectancy of the annuitant(s).
Gift annuities to benefit Frederick Living are managed by either Everence Foundation or Univest Foundation depending on the donor’s preference. We are also happy to work with your financial advisors to ensure that your desires and interests are met. The Director of Advancement at Frederick Living is available to provide additional information at no obligation, including a personalized and confidential proposal. Please contact the Advancement Office at (610) 754-7878 Ext. 1250.