Charitable Gift Annuities
Giving That Gives Back
Each of us is concerned that we are prepared for whatever circumstance we might find ourselves in. Whether you are the displaced child who finds herself in a refugee camp due to political or social crisis, or whether you are planning for sources of retirement income for yourself and your loved ones - you need to feel secure. Wouldn't it be great if you could provide for yourself and the displaced child half a world away?
A gift annuity (minimum $10,000) from Heifer Foundation can provide a source of income in retirement that can withstand the test of time and provide income for you for the rest of your life. In addition, hungry families around the world will receive animals and training that will afford them the security of income and self-reliance. In these times of lower interest rates and uncertain market fluctuations, a charitable gift annuity can provide you with the security you need, while giving a hungry child the security they need.
Gift annuities are a simple and convenient way to make a gift. Under the terms of a gift annuity, you make a gift of cash or other appropriate assets in a way that allows you to retain payments for the remainder of your lifetime. You can also provide for payments that continue for the life of one other person if desired, or direct that the payments be made to one or two others you name.
How much are the payments?
Gift annuities payments vary according to the age of the annuitant (person who receives payment) at the time the annuity is funded. The older you are when you fund your gift annuity, the higher your payments will be. The calculator at the right can give you an idea of payments, but please call us for an actual quote.
What stands behind the payments?
Under state law, all of the available assets of the charitable recipient (in this case Heifer Foundation) serve to back the annuity payments.
Enjoy tax savings
A generous charitable income tax deduction is allowed
for the year your gift annuity is funded. Capital
gains tax that would be due on the sale of assets
used to fund an annuity can be partially avoided
with the remainder typically reported over the donor/annuitant's
life expectancy.
Under the terms of recently enacted federal tax legislation,
it will be a number of years before many estates are
exempted from estate tax. A gift annuity can be an
excellent way to enjoy income tax savings today while
assuring that the amounts used to fund the annuity
will never be subject to estate tax.
Understanding Your Tax Savings
- A portion of the amount contributed for a gift annuity is deductible for federal income tax purposes.
- There can be additional income tax savings depending on your state of residence
- Capital gains tax can be avoided or delayed when property that has increased in value is used to fund a gift annuity
- Gift annuity payments can be taxed more favorably than many other sources of income.
- Assets used to fund gift annuities are typically removed from your taxable estate.
- Gift or capital gains tax considerations may arise in some cases where a gift annuity is created for someone other than a spouse.
Increase Income Over Time
The amount of your gift annuity payments will never change. But the rate for each new annuity will be higher at later ages. For this reason, some choose to create a new gift annuity each year as part of their retirement planning. In this way, they make meaningful gifts over time while enjoying increasingly higher amounts of steady income.
What Can I Give?
To receive maximum benefits from a gift annuity, it is important to think carefully about the property used to make your gift. Consider the following assets as you decide what might offer the greatest opportunity for you:
- Cash
- Proceeds from bonds
- Stocks or mutual funds
- Withdrawals from retirement plans you may be required to make.
How do Gift Annuities Turn into Goats?
The principal gift ultimately becomes part of the endowment that goes to support Heifer's programs around the world. With each gift annuity, the endowment grows to produce more income that can be used to provide animals and training to hundreds of needy families who will be able to support themselves because of your gift.
Our Development Department will be pleased to talk with you and your advisors as you consider which asset might be best for you to use to fund a gift annuity. For more information, call Heifer Foundation at (888) 422-1161; e-mail info@heiferfoundation.org; or visit us online to calculate your gift options and download your form.
Want to run a Charitable Gift Annuities calculation?
Click here to get the calculator.
