Charitable Gift Annuities- Immediate Payment

When his CDs were rolling over in October, a donor chose to increase his income by establishing a charitable gift annuity. At his age he receives a 7.9 percent rate of return. In addition, he gets to take a substantial deduction on his income tax return. Also, nearly half of his annuity payments are tax free. He looks forward to receiving his quarterly checks from Quinnipiac.

If you want to support Quinnipiac's programs but need the income that you have been receiving from an asset, you may wish to consider how a Quinnipiac Charitable Gift Annuity could help you. The rates of return range from 5.5 percent for age 60, to 10.5 percent for age 90 and older. The minimum gift is $10,000.

Best of all, you will find satisfaction in making a gift today that will continue to provide you with income and will in time make a valuable difference in the lives of Quinnipiac students.

How they work:
The charitable gift annuity is perhaps the simplest of all life income gifts available. At its heart, the charitable gift annuity is a contract, usually one or two pages, where, in exchange for a gift of $X, Quinnipiac agrees to pay $Y each year to one or two individuals identified by the donor for life. Quinnipiac’s obligation to make these payments is backed by the full faith and assets of the institution. At the time the gift is made, the donor will qualify for an income tax charitable deduction equal to Quinnipiac’s interest in the gift – the present value of the remainder interest. To the extent that a donor may not be able to use the entire deduction in the year of the gift, a five year carry forward is available.

Another benefit of the charitable gift annuity is that the annual annuity payments may be taxed to the recipients at favorable rates. Some portion of the payments may be completely tax free and, if funded with appreciated stock, some portion may be taxed at capital gains rates. This favorable taxation will continue until the annuitants reach their actuarial life expectancy.

Here’s an example:* Pat and Marie are 70 and 72 years old. They have a $25,000 CD that will mature next month and they have not been happy with the interest rate they have been receiving. If Pat and Marie fund a Quinnipiac University charitable gift annuity with the $25,000 they will qualify for an income tax charitable deduction of $7,799. They will receive an annuity of $1,425 or 5.7% of their original gift each year in equal quarterly installments for the rest of their lives and for the life of the survivor of them. Of this $1,425, fully $874 will be completely tax-free making the effective rate of return significantly higher. Then, at the death of the survivor of Pat and Marie, whatever is left will go to Quinnipiac to establish a scholarship fund as they wished.

* Assumes a gift made in November of 2008.

Charitable Gift Annuity Payment Rates:

Based on one life, age 60 or older as of November 30, 2008

Based on one life, age 60 or
older as of Nov. 30, 2008

Based on two lives, age 60 or older
as of Nov. 30, 2008

AGE

ANNUITY RATE

AGES

ANNUITY RATE

60

5.5%

60/60

5.2%

65

5.7%

60/65

5.3%

70

6.1%

65/65

5.4%

75

6.7%

65/70

5.5%

80

7.6%

70/70

5.6%

85

8.9%

70/75

5.8%

90+

10.5%

75/75

6.0%

75/80

6.2%

80/80

6.6%

80/85

6.9%

85/85

7.4%

85/90

7.9%



When some of Ann Lincoln's securities were reaching record highs, she decided to give the stock to Quinnipiac to establish a charitable gift annuity. Not only did she obtain significant capital gains tax savings, but she now receives a fixed income of over 9 percent for the rest of her life. Read Ann's story


Please contact Steven Greaves, director of gift planning, at 203-582-3995, or toll-free at 877-582-1929 or by email at steven.greaves@quinnipiac.edu for additional information on charitable gift annuities and their advantages.

To calculate the benefit of a charitable gift to Quinnipiac University, click the icon:

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