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Charitable Gift Annuities

Flow chart showing how donation leads to annuity, which leads to charity

A charitable gift annuity (CGA) is an example of how our current tax laws provide special ways for you to make a substantial gift of cash or stock and increase your income in the process. A CGA may offer a win-win proposition for you and the university.

The CGA makes it possible for you to receive higher returns on an asset for the rest of your life. You will receive an immediate charitable income tax deduction for the charitable portion of your gift. When funded with cash or cash-like assets the return payments will include a significant portion of tax-free income. If funded with growth stock or under-performing capital gains assets that portion will be returned at the capital gains tax rate, a rate that is always preferable from the taxpayer’s perspective.

Rates are based on the age of the "annuitant" and are typically fixed at a higher percentage as the age of the annuitant increases.

Rates on CGAs fluctuate in accordance with the insurance industry's "annual age calculations." Therefore, every CGA is individually customized. Once your CGA is established, you'll enjoy the benefits of membership in the Saxifrage Society.

For an illustration of how a charitable gift annuity can work for you, please contact us.

Benefits

 
  • An immediate income-tax charitable deduction for a portion of your gift
  • No capital gains tax due for the transfer of appreciated assets to your gift
  • The potential of earning fixed payments for life (a portion of which may be tax-free) or receiving an increase in income earned from investments

Are some or all of your retirement plans invested in Money Market or Certificate of Deposit accounts? Increase income yield and earn income tax savings through a charitable deduction without sacrificing security by transferring those assets to a Fitchburg State University Gift Annuity.

There are variations on the charitable gift annuity theme to address some family financial planning concerns:

  • Interested in providing a source of income for a younger person’s educational costs? Consider an Educational Annuity Trust, technically called a commutable charitable gift annuity.
  • Looking for additional retirement benefits during high income earning years? Establish a laddered series of deferred payment charitable gift annuities.
  • Concerned about an older persons income stream? Use your financial resources and their age to establish a high rate of return payments for their use.