Charitable Gift Annuity

A charitable gift annuity is a simple contract between you and Haggai Institute, in which Haggai Institute agrees to pay you (and/or another named beneficiary) a fixed income for the life or lives of your named beneficiary(ies). The amount of income is based on a rate determined by beneficiary age and is set by the American Council of Charitable Gift Annuities. Many have found the charitable gift annuity a very simple way to convert low-yielding assets into a higher fixed income payment for retirement, as well as provide Haggai Institute with a significant gift in the future.

How is a charitable gift annuity set up?

A gift annuity can be set up with a simple four-step process. First, you request a proposal that details the specific benefits of a gift annuity based on your situation. Second, we prepare a gift annuity application for your approval. Next, the transfer of the assets (check, stocks, bonds, or real estate, etc. – $25,000 minimum) to Haggai Institute takes place. Finally, you receive the formalized gift annuity contract specifying the payment dates and the amount of each payment you will receive for life.

What are the tax benefits?

You are entitled to a charitable income tax deduction for the gift portion of the annuity in the year the gift is made. If cash is used to fund your annuity, you may deduct up to 50 percent of your adjusted gross income; if an appreciated asset such as stock is used to fund your annuity, your deduction is limited to 30 percent of your adjusted gross income. Another tax benefit is that capital gains are spread over the term of the annuity rather than being reported in the year of sale. Also, depending on the source of your gift, a portion of the annuity income may be tax-free. Finally, the total amount of your gift is removed from your estate for estate tax purposes.

How can a charitable gift annuity be funded?

There are multiple ways to fund a charitable gift annuity. One is through the traditional avenue of a monetary gift. However, a charitable gift annuity may also be funded with appreciated property. In that case, your charitable deduction can be taken up to 30 percent of your adjusted gross income. Another advantage of using appreciated property is avoiding some capital gains and being able to prorate the gain incurred over your lifetime.

Can I defer my payments until a late date?

If you do not need your payments to begin right away, there is a plan specifically for you. You can make the gift now, while your income is greater, and defer or postpone the payments until you retire. The payments will be based on your original contribution plus accumulated interest from the time of the gift and on your age when payments begin.

This plan gives you a current income tax deduction and the opportunity to accumulate income for the future. And, parts of all future payments are considered tax-free.

Can I establish a gift annuity in my will?

You may wish to establish a gift annuity for someone in your will. In this case, the annuity would become effective at your death, providing regular payments for your loved one beginning immediately from that time. You would also know you are creating a legacy at Haggai Institute while meeting the needs of your loved one.

When does Haggai Institute benefit?

Haggai Institute benefits from your gift at your death, and under certain circumstances during your life. Our contract with you requires us to hold your gift in reserve until our income obligations are satisfied.

What rate will I be paid?

The rate you (or your beneficiary) will be paid is determined by age. The older the income beneficiary, the higher the rate paid.

If you have questions or to advise us of your desire to transfer mutual fund shares, closely held or restricted stock, or to create a planned gift using securities, please contact:

Scott Halquist
Director of Advancement
Great Lakes Region
4725 Peachtree Corners Circle, Suite 200
Peachtree Corners, Ga. 30092
Mobile:  616-551-8346
ScottH@haggai-international.org  

DISCLAIMER: The information contained on this page is for educational purposes only. The reader understands that Haggai International is not rendering legal advice and that the reader should seek independent legal counsel when contemplating estate planning decisions.