Gift AnnuitiesA Win-Win Situation
A charitable gift annuity is a combination of a gift to the International Crane Foundation and a lifetime income to the donor. A substantial portion of the income is a tax free return of principal, resulting in an attractive cash flow to the donor. The Charitable Gift Annuity partnership between ICF and the donor creates a win-win situation.
The annuity portion provides the donor, or someone designated by the donor, an income for life that will not change. Annuity rates are based on the age of the individual; the older the person the higher the payout rate.
The charitable portion of the annuity will support the mission of the International Crane Foundation to preserve and protect the cranes of the world and the habitat and ecosystems where they live.
Example: Jean, age 82, a long time member of ICF, currently has certificates of deposit that pay her 2% annually. This income combined with some dividends from her stock portfolio and social security income, are all that she has for income to live on. She would like to make a current gift to support the work of ICF but needs all of the current income to meet her needs. One possible solution is to donate $50,000 using either the stock or the certificates of deposit in exchange for a charitable gift annuity. At current rates, Jean would receive an income for life of $4,250 annually, a payout of 8.5%. This income is more than 4 times the income she currently receives from the other investments. As a result of making a charitable gift, she is eligible to deduct the gift portion of the annuity from her income taxes. Jean is thrilled to be able to support the Foundation AND increase her income substantially.
How are gift annuity payments taxed?
For tax purposes, a gift annuity is treated as part gift and part annuity purchase. The gift portion is the amount that is deductible in the year the gift was made. The balance is treated as the purchase price of the annuity. The amount of the purchase price is returned to the individual over their lifetime tax free, resulting in an even higher rate of return.
How secure are the funds I invest?
Many charitable organizations invest the funds in the same manner as their general assets. At the International Crane Foundation we reinsure your funds with a major, multi-billion dollar insurance company for your additional protection and piece of mind.
Example: Jim and Sally have been married for 50+ years and have always been equal partners in their financial affairs. One of their concerns is how to provide reliable income should they need increasing levels of care or after the death of a spouse.
By purchasing a joint charitable gift annuity, income at a fixed amount, would be payable for as long either one is alive. The asset used to fund the annuity could not be used for long term care; however the income would provide help with those costs. Income is available for current needs and for unexpected expenses. The charitable gift annuity can provide peace of mind and the security that comes with it.
I would like to have a charitable gift annuity, but I am concerned that my children will not be able to use the money after we are gone.
This concern is common and it is important to remember that the gift annuity is irrevocable. Often, however, children state that they would rather see their parents enjoy more income during their lifetimes than be concerned about providing additional dollars in the form of an inheritance. The key is to take care of your needs first, and leave an amount that is appropriate to your children.
How are charitable gift annuity rates determined?
Charitable organizations are free to establish the rates that they offer. ICF follows the guidelines established by the American Council on Gift Annuities.
Give The Tree... Keep The Fruit
Why does the International Crane Foundation offer gift annuities? Many of our friends want to give more to ICF but live on fixed incomes or do not want to donate income-producing assets. With our gift annuity program, you can make a significant gift and still retain lifetime income that may actually be substantially more than you are currently realizing.
Fixed payments, income tax deductions, partial tax free income, and possible reduction of estate taxes make this program a prudent option for many of our donors.