Charitable Gift Annuities
Of all the life-income gifts, the charitable gift annuity may be the simplest and most economical to complete. A charitable gift annuity is a contract between Sarah Lawrence and a donor specifying that in return for a gift of cash or marketable securities, the College will provide the donor and/or another beneficiary, fixed payments for life. The payment rate is based on the age of the beneficiaries at the time the gift is established.
Gift annuities enable you to:
- Receive a fixed and dependable income for life
- Take a sizable charitable income tax deduction for the year the gift is funded
- Initially bypass and reduce capital gain tax if funded with appreciated securities
- Remove the assets used to fund the gift from your estate for tax purposes
Example
Margaret Brody, age 72, is planning a gift to Sarah Lawrence for her 50th reunion, but wants to retain income for herself and her husband, Bill, age 76. By funding a gift annuity with $100,000 of low-yielding, appreciated stock that she purchased for $20,000 nearly twenty years ago, she can achieve the following:
- Earn a yearly income of $6,900 based on an annual payment rate of 6.9%*
- Receive a $33,830** charitable income tax deduction
- Spread capital gain of $52,936 out over her life expectancy of 14.5 years
- Remove $100,000 from her estate that could otherwise be subject to tax
- Make a substantial gift to the College in honor of her class reunion
*American Council on Gift Annuities recommended rates as of 7/01
** Based on a discount rate of 6.2%
