Practical Philanthropy

 

Information and Resources for Donors and Professional Advisors

Charitable Gift Annuity: Receive Income for Life

Donors who are interested in making a charitable contribution, but still wish to retain an income stream during their lifetime, may find a charitable gift annuity to be a simple solution. In some cases, depending on the assets utilized, donors may increase their annual income, while also receiving a tax deduction in the year of the gift.

To establish a charitable gift annuity, a donor gifts cash or appreciated securities to the Community Foundation. In exchange, the donor receives a fixed payment from the Community Foundation for one or two lifetimes — typically the donor, or the donor and their spouse. When the last annuitant passes, the remainder is added to permanent endowment to support changing needs, a field of interest, or one of our participating nonprofit agency endowment partners.

A charitable gift annuity to the Community Foundation provides several benefits:

  • Charitable gift annuities are easy to arrange. Community Foundation staff can provide a gift illustration and a simple agreement to start the annuity. Payments can begin at the end of the next calendar quarter or some point in the future, as determined at the time of the gift. Charitable gift annuities can be established for as little as $10,000, which is a much lower threshold than other planned gifts, such as a charitable remainder trust.
  • Age-based payment rates are set according to the American Council of Gift Annuities, and in some cases, the annual payment may exceed the amount a donor might receive from their other investments. A portion of the annual income is usually tax-free, as well.
  • The Community Foundation for Southeast Michigan has the largest charitable gift annuity program of any community foundation in the country. Donors can be confident that their gift will be expertly managed to carry out their wishes.

The Community Foundation is happy to discuss your options or provide a sample illustration.

For more information, please contact our philanthropic services team at 313.961.6675 or email us here.

Learn more about Charitable Gift Annuities