Charitable annuity:
A secure investment for uncertain financial times

The charitable gift annuity is a combination of a gift to charity and an annuity. For senior persons, annuity rates may be 8%, 9% or even higher. Since part of the annuity payment is tax-free return of principal, the gift annuity may provide the annuitants with substantial income. The combination of partially tax- free income and the initial charitable deduction makes this agreement quite attractive. And, after all payments have been made for
the lives of the two annuitants, a favorite charity will benefit from the charitable gift.

A gift annuity is a contract between the charity and the individual. The individual transfers property to the charity, and the charity promises to pay a given amount at the end of each selected payment period to one annuitant for life or two annuitants for both lives. Part of the payment is interest earned and is taxable as ordinary income. Part of each payment is return of principal and is tax free. However, if an annuitant survives past his or her life expectancy, all later annuity payments will be ordinary income.

Is a charitable annuity right for you? For more information about this and other planned giving vehicles, call Barrow Neurological Foundation, 602-406-3041. Or drop me an email at Kathy.Kramer@chw.edu.