What is a charitable gift annuity?
To create a charitable gift annuity, an individual transfers cash, stocks, mutual funds, or property to a charitable organization such as Eastern Mennonite Missions; the organization then makes fixed payments to one or two people for the rest of their lives.
As its name suggests, a charitable gift annuity consists of two elements: the charitable gift, and the annuity. You make a charitable gift to Eastern Mennonite Missions, and you decide how and when payments to the "annuitants" should begin. The payment period can be the rest of one annuitant's life (usually the donor) or the rest of two joint annuitants' lives (usually husband and wife). You can designate a charitable gift annuity to begin immediately, or be deferred.
When the annuity matures, the remaining principal goes to Eastern Mennonite Missions for future mission work.
Charitable gift annuities provide a fixed yearly, quarterly, or monthly income stream based on age and related actuarial tables provided by the IRS. Because a portion of the gift's principal is paid back with each payment, the return is often higher than other financial instruments can offer. You can provide an annuity for one or two beneficiaries you choose; these annuities are paid for lives of the beneficiaries (not for a fixed number of years).
You can fund an annuity with a number of financial instruments including cash, stocks, and tangible personal property. In the year you create the annuity, you receive an itemized charitable deduction for a portion of the amount you give. In addition, if you fund it through appreciated stock or other non-cash means, you will also realize tax benefits related to savings on capital gains tax.
The annuitant (yourself or other designated beneficiaries) receives a portion of the annuity payment tax free each year until the annuitant has reached life expectancy. (After the annuitant has reached life expectancy the annuity payment no longer has a tax free portion.)
|* based on current American Council on Gift Annuity tables as of 4/1/2010 (subject to change)|
Taking annuities with Eastern Mennonite Missions helps you to participate with missions while receiving committed fixed income streams during your lifetime - taking away the anxiety of watching the current economic environment. You can see your assets at work bringing the gospel to places where Jesus is less known. Such gifts can also help unlock your assets so that you have better access to cash for your own or designated beneficiary's needs.
For more information, contact Joe Hollinger. Also, see a click here to see a chart of planned giving benefits.