Charitable Annuity Rates

Rates on charitable gift annuities beat CDs

We have often called Charitable Gift Annuities a “win-win” investment but now, more than ever, it’s one of the smartest investments and gifts a donor can make.

If you have charitable intentions and are interested in receiving income for life, now is definitely the time to think about investing in Charitable Gift Annuities.  Many of our donors have relied on CDs (Certificates of Deposit) for income and have switched to investing in Charitable Gift Annuities which have a much higher payout.  A recent survey showed that rates on 12-45 month CDs at area banks range from a low of 1.38% to a high of 3.13%.  Charitable Gift Annuities, on the other hand, have a payout which ranges from 5.5% for someone 55 years old to 11.3% for someone 90 years and older.

Plummeting CD rates have the attention of every senior citizen.  Seniors ask, “How can I maintain my income?  We need more income!”  There has never been a better time than now to talk about charitable gift annuities.  Many seniors find that taking one-third of their CDs and acquiring 7% or 8% gift annuities will restore their lost income.  One-third added income from the gift annuities replaces the income lost on the other two-thirds of their remaining CDs.

Gift annuities can be done on one life or two.  In the case of a single life annuity, when the annuitant passes away the money remaining in the annuity is gifted to St. Luke and is used in the way the donor specified.  With a two-life annuity, after the first annuitant passes away, the second annuitant receives the same income.  When the second annuitant passes away, the balance of the annuity is gifted to St. Luke.

A Charitable Gift Annuity is a contract in which a donor exchanges a gift of cash, securities or other property for a guaranteed, fixed, annual income for the rest of his and/or her life.  Gift annuities provide several advantages including:

w     Income for life at attractive payout rates

w     Tax savings because part of the contribution is tax
    deductible and a portion of the annual income is tax free.

w     A savings of capital gains tax if contributions are made
      with appreciated securities or real property.

w    Personal satisfaction of having made a gift of significance to
     the St. Luke Foundation.

The amount of income a person receives is based on his/her age.  Payments can be made monthly, quarterly, semi-annually or annually and can be mailed or directly deposited into the donor’s account at any bank.

Would you rather be earning 1.38% from a CD or these rates on a CGA???