Of all the gifts that pay you back, the charitable gift annuity is the simplest, most affordable, and most popular. You make a gift to The Nature Conservancy and in return, we agree to make fixed payments to you for life. The gift agreement is a simple contract between you and The Nature Conservancy. The payments to you become one of our general obligations, fully backed by all of our assets. At your death, we apply the balance of the gift annuity to the program you designated when you made your gift.
Gift annuities offer attractive tax benefits:
- First, you receive a charitable income tax deduction for creating a gift annuity, based on the fair market value of the assets you contributed minus the present value of the life-income interest you retained.
- Second, if you fund your gift annuity with appreciated securities, no upfront capital gains tax is payable. Only a portion of your capital gain will be recognized, and the tax will be spread out over your annuity payments. The result? You can contribute appreciated but low-yielding assets and put the entire amount of your gift to work earning lifetime payments for you.
- Third, a portion of your annuity payments will be taxed at a low 15% capital gains rate if you created your gift with appreciated securities. Another portion will be treated as the tax-free return of principal. Only the balance of your payment is taxed as ordinary income to you. This tax treatment, not available on other types of life-income gifts, increasing the effective yield of your gift annuity.
Note: The IRS provides that the capital gain and tax-free income benefits are in effect during your life expectancy if you live longer, the entire annuity payment will be taxed to you as ordinary income.)
- A charitable gift annuity at The Nature Conservancy can be created with a gift of $5,000 or more.
- Your gift annuity can make payments to a maximum of two people.
- Gift annuity rates are partly determined by the age of the beneficiary (minimum age of 50). Younger donors may find planning benefits in a deferred gift annuity.
A charitable gift annuity is for you if ...
- You want to make a significant gift to us and receive lifetime payments in return.
- You want to maximize the payments you receive from your planned gift — and you want to lower your income tax on those payments.
- You want the security of payment amounts that won't fluctuate during your lifetime.
- You also appreciate the safety of your payments being a general financial obligation of the institution.
You hold a stock portfolio that has appreciated well but only pays you 2% income per year. You are now 70, and you are concerned that if you sell some of the stock to reinvest in bonds, capital gains taxes will cut heavily into the proceeds. You want to make a gift of $50,000 to The Nature Conservancy, but you need the income that your portfolio provides you.
Here's a summary of the income and tax benefits from this gift annuity: *
Donor (Age 70)
Amount contributed (stock)
Gift annuity rate
*This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates.
Learn about all the life-income gift opportunities.
Meet Katie and Paul Sholtz and learn about their flexible deferred gift annuity.
Calculate your benefits with our gift calculator.
You can protect forests and other natural places by making a planned gift with The Nature Conservancy. Contact us today.
September 27, 2012