Charitable Gift Annuity
The charitable gift annuity enables you to make a gift to support Bay Area Legal Services and at the same time improve the quality of life for your family. In exchange for your gift of cash or marketable securities to Bay Area Legal Services, we agree to pay you (and a survivor or other beneficiary) a fixed amount annually for your lifetime. The transfer is part gift and part purchase of an annuity. The rate of return is attractive and the payments are guaranteed for life.
Bay Area Legal Services uses the charitable gift annuity rates recommended by the American Council on Gift Annuities. The following are rates for a single-life charitable gift annuity:
Ages/Rate Ages/Rate Ages/Rate Ages/Rate
55 -- 6.1% 66 -- 7.1% 77 -- 8.5% 88 -- 11.4%
56 -- 6.2% 67 -- 7.2 78 -- 8.7 89 -- 11.7
57 -- 6.3 68 -- 7.3 79 -- 9.0 90+ -- 12.0
58 -- 6.4 69 -- 7.4 80 -- 9.2
59 -- 6.5 70 -- 7.5 81 -- 9.6
60 -- 6.6 71 -- 7.6 82 -- 9.6
61 -- 6.7 72 -- 7.7 83 -- 9.9
62 -- 6.8 73 -- 7.8 84 -- 10.2
63 -- 6.9 74 -- 8.0 85 -- 10.5
64 -- 6.9 75 -- 8.2 86 -- 10.8
65 -- 7.0 76 -- 8.3 87 -- 11.1
For example, Miss Anderson, age 75, transfers $10,000 to (nonprofit_name) for a gift annuity. She will receive a guaranteed annual income of $820 ($10,000 x 8.2% -- the annuity rate for her age).
Joint and Survivor Annuities
Gift annuities can be arranged to make payments for the lifetimes of two people, such as a husband and wife, brothers and sisters, parents and children or close friends. The rates for two lives are less than rates for one life because the period of payment may be longer. The following chart shows some sample rates based on two lives:
Ages/Rate % Ages/Rate % Ages/Rate % Ages/Rate %
65/60 -- 6.4% 70/70 -- 6.8% 80/75 -- 7.5% 85/85 -- 9.0%
65/65 -- 6.6% 75/70 -- 7.0 80/80 -- 8.0 90/85 -- 9.6
70/65 -- 6.7 75/75 -- 7.3 85/80 -- 8.4 90/90 -- 10.6
Two-life gift annuities also provide charitable deductions and payments to the recipients that are partly tax-free.
For example, Mr. Edwards is 75 and his wife is 70. They transfer $20,000 to Bay Area Legal Services for a gift annuity and receive $1,400 annually for life ($20,000 x 7.0% -- the annuity rate for their combined ages). The full guaranteed payments continue for the survivor's life.
If you wish, you may defer charitable gift annuity. You can make the gift now, and Bay Area Legal Services will pay you (and another beneficiary, if you wish) life income starting at any date you specify. This is a great option if you are concerned about retirement income. Also, you receive the income tax deduction in the year you make the gift. The amount you receive each year depends on the amount transferred, your age now, and your age when the payments are to start.
For example, Miss Baker, age 50, transfers $10,000 to Bay Area Legal Services for a deferred gift annuity with payments to start at age 65. Her rate of return will be 16.3 percent, and she will receive $1,630 per year for life ($10,000 x 16.3%).
Note that the charitable deduction is available to donors who 'itemize' deductions and in some cases may not be wholly deductible in one year. Excess deductions, however, can be carried over and deducted for up to five carryover years. Remember that the charitable gift annuity is an irrevocable gift commitment, but one with excellent tax and financial benefits.
We make no claims regarding the accuracy of the above information or the tax consequences stemming from your use of it. Please consult with your own tax, legal, or financial planning advisor.
Contact Bay Area Legal Services Development Office 813-232-1222 x131 or beppley@bals.org.