Exploring Charitable Gift Annuities: A Win for Donors and the Diocese
Charitable giving has long been a way for individuals to support causes close to their hearts while leaving a lasting impact. Among the array of giving options available, charitable gift annuities (CGAs) have gained popularity for their unique benefits. In this article, we explore this planned giving option, understand how it works, and uncover the advantages that CGAs bring to both donors and the various ministries within the Diocese of Raleigh.
Charitable Gift Annuities: A Deeper Dive
A Charitable Gift Annuity (CGA) is simply a promise by The Foundation to pay a certain amount of money to a donor each year for life. The Foundation makes this promise, in the form of a legal contract, in exchange for a charitable contribution now. The gift annuity is the second most common planned gift, after charitable bequests.
The way it works is simple: a donor contributes an amount to The Foundation, and in return, they receive regular annuity payments for the rest of their life. The rate of return is determined by factors like the donor's age and current interest rates.
The terms for an Annuity can be both one-life and two-life annuities. The payout rates for a “Single Life Annuity” or “Two Lives Annuity” agreement do not exceed those suggested by the American Council on Gift Annuities as updated on their website, https://www.acga-web.org/current-gift-annuity-rates.
Advantages of Charitable Gift Annuities
- Steady Income: CGAs provide donors with a stable income stream for life, making them an attractive option for individuals seeking financial security in their retirement years.
- Tax Benefits: Donors can receive immediate income tax deductions in the year they make their gift. Additionally, a portion of the annuity payments might be tax-free, enhancing the overall financial benefit.
- Supporting Causes: CGAs offer donors the opportunity to support causes they are passionate about, such as the programs and initiatives supported by The Foundation.
Benefits for Both Donors and the Diocese of Raleigh
- Win-Win Solution: CGAs create a win-win situation. Donors receive financial security and tax benefits while providing support to the Diocese's mission and programs.
- Strengthening Communities: The funds generated from CGAs enable the Diocese of Raleigh to enhance its services, outreach, and community programs, amplifying its impact.
- Building Relationships: CGAs foster a deeper connection between donors and the Diocese. Donors can witness the positive effects of their contributions during their lifetime.
Common Questions and Concerns
1. What Happens After the Donor Passes Away?In the case of CGA, the remaining funds typically go to The Foundation to further its mission once the annuity payments conclude.
2. Can I Choose Where My Donation Goes?Yes, donors can often designate their gift to specific programs or areas within the Diocese that align with their intentions.
3. Is There a Minimum Age Requirement for CGAs?You must be at least 55 years old at your closest birthday, for a deferred gift annuity. Otherwise, if you are 65 or older, you can establish a gift annuity with a minimum gift amount of $10,000.
4. Can I fund a Gift Annuity with Appreciated Stock?Yes, and you have several additional benefits. Your gift annuity amount is based on the fair market value of the securities. Also, you may avoid some of the capital gains tax and that which is owed can be spread over several years.
5. What About Market Fluctuations?The fixed income from CGAs is not impacted by market fluctuations, providing a reliable source of income.
As with any financial decision, consulting with legal and financial professionals is essential to ensure that your planned giving aligns with your goals and circumstances.
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