Many donors today are seeking ways to increase the annual income they
receive from their securities and cash balances. Charitable Gift Annuities
offer a possible solution that benefits both donors and the Mission. In
addition to potentially increasing annual income from stock holdings and
cash balances, Charitable Gift Annuities may provide substantial
investment and tax benefits.
Charitable Gift Annuities (CGAs) involve an
irrevocable transfer of cash, appreciated securities or certain other
assets to Atlanta Union Mission in exchange for the Mission's commitment
to make periodic payments, typically quarterly, to you and/or a designated
beneficiary for life. The only paperwork necessary to complete a CGA is a
simple, one-page agreement (click
here for a sample agreement). The annuity rate is based on the age(s)
of the income beneficiary(ies), typically 5.5 percent to 8.5 percent.
Charitable Gift Annuities provide significant potential benefits to
donors with highly appreciated, low-yielding securities who want to
increase the annual cash flow on their investments while avoiding or
deferring capital gains taxes. When appreciated assets are used to fund a
CGA, a portion of your gain permanently avoids capital gains taxes, while
the remainder is taxed over your life expectancy.
Charitable Gift Annuities entitle you to a charitable income deduction
for a portion of the value of your gift donation in the year the gift is
funded. The deduction is not 100 percent of the value of the assets since
you will receive annuity payments from the Mission. The amount of your
deduction depends on the number and ages of the income beneficiaries as
well as the rate of the annuity payment and interest rates when the gift
is funded. Assets used to fund a gift annuity are removed from your
estate, thereby avoiding any estate taxes that may occur upon your death.
Click here for an example of the benefits of a Charitable Gift Annuity.
If you use cash to fund a CGA, a portion of the annuity payments you
receive will be tax-free. The remainder is ordinary income. If you fund a
CGA with appreciated property, the annuity payments you receive will
include ordinary, capital gain and tax-free income. As for security, all
of the assets of Atlanta Union Mission back the Mission's commitment to
make annuity payments to you and/or the designated income beneficiaries.
A variation on the CGA for donors who do not currently need income, but
want to provide income at a later date, say retirement age, is the
Deferred Payment Gift Annuity.
