How might a Charitable Gift Annuity benefit you during your lifetime?
Published: September 28, 2023 by Johnson County Community Foundation
If you are looking for ways to plan your future giving while actively investing, a charitable gift annuity may be the right choice for you. This route of planned giving at JCCF allows you to donate assets including cash, such as securities and personal property, that earn you income until the assets become gifts.
But what is a charitable gift annuity, exactly? How might you and your loved ones benefit from opening one?
Fidelity.com defines a charitable gift annuity as follows:
A contract that provides the donor with a fixed income stream for life in exchange for a sizeable donation to a charity.
Here’s how it works:
As a donor, you make a sizable gift to JCCF. In return, you may be eligible to claim partial tax deduction for your donation for the year you set up the annuity. Why only a partial deduction? The IRS views one portion of the donation as a gift, and the other portion as a personal investment, which is beneficial to you as this is how the fixed pay-out occurs. Once your charitable gift annuity is set up, you receive a fixed stream of income from the charity for life. A portion of the fixed payments you receive may also be tax-free for a period of time, based on your life expectancy. This fixed stream of income will never devalue, and it is also guaranteed, backed by the charity’s assets, making JCCF the best choice when deciding where to designate your funds.
For more information on Charitable Gift Annuities, contact Kim Kasting at 317-738-2213 or by email here.
Consult a tax advisor about your specific situation.
