A charitable gift annuity is a simple contract between a donor and a charity in which the charity pays the donor an amount for life based on the value of the gift.
The rate also takes your age into account; the older you are the higher the rate of interest you will receive. Your interest is a fixed amount for the rest of your life paid quarterly, semiannually, or annually to you. The annuity can be set up to continue for a survivor when you pass away which would be called a two-life annuity. Annuity rates will be slightly higher for a one-life gift, slightly lower for a two-life gift.
A deferred gift annuity is very similar to a ‘regular’ charitable gift annuity except that the annuity payments do not begin until a
future date of the donor’s choosing. The deferral of annuity payments results in a higher payment rate and a significantly larger income
tax deduction. Deferred gift annuities are particularly favorable to young donors who need an immediate tax deduction, but do not need
income right away. Many use them to supplement retirement income and therefore defer the onset of payments until their anticipated year
of retirement. With the limits placed on many tax-favored retirement arrangements, such as IRAs, Keoghs, 401(k) and 403(b) plans, the
deferred gift annuity is becoming increasingly popular. Deferred gift annuities are also a favorable option for those who must begin
drawing from their retirement funds now, but do not need the income right away.
Deferred Gift Annuity Example
Janet Stevens, age 55, is doing very well in her career but is frustrated that she can’t add more to her IRA for added security upon
her retirement. She would also like to increase her support for a charity where she is active and volunteers regularly. By establishing
a $20,000 deferred gift annuity with payments beginning in 10 years, she can accomplish the following:
- Receive an immediate income tax deduction of $7,109 (35.5% of the gift made).
- Have an added source of income during retirement that will guarantee her payments at 9.9% interest annually, a portion of which is tax-free during her lifetime.
- Eliminate possible estate tax due on $20,000.
- Make a gift she never thought she could make to her favorite charity.
Charitable Gift Annuity Donors
Steadfast supporters of OHS:
Nonnie Pepper (l), Jane Porter (c), Jeanette Sexton (r)
From Development Board member Jane Porter:
Dr. Jane Porter, who was born and raised in Steubenville and now lives in Columbus, attributes her love of history to
Miss Mary Brown, her high school history teacher.
"She sparked my interest in history as much as anything. I became aware of history and it intrigued me.
I had the Ohio Historical Society in my will and had intended all along to do something. It seemed like a good opportunity for
me to donate while I could still see that it was doing some good as well as receive some benefits for it."
Dr. Jane Porter
From member and volunteer Georgia Bruce:
As a volunteer in the Society’s Exhibit Design department for more than 10 years, Georgia Bruce has given her time and
talents in countless ways. Recently, she elected to help the Society in another important way—she became enrolled in the Charitable Gift
Annuity (CGA) Program.
"I had read about the CGA program in Echoes and didn’t think much about it at the time. But then I talked
about it with Jane Porter one day and I thought, OK, ‘I’m going to do this.’ I kept turning this money over in CDs that didn’t offer as
good a rate as OHS’s Charitable Gift Annuities. The CGA was an unchanging rate. I finally decided to put it to better use and
invest in the future of the Ohio Historical Society."
Upper Arlington, Ohio
Georgia Bruce volunteers in the Exhibit Design area