Charitable Gift Annuity

Charitable Gift Annuity

Charitable giving doesn’t have to be a one-way proposition. It is possible to make a charitable gift and actually have a stream of payments flow back to donors – all while generating valuable income tax benefits.

A Charitable Gift Annuity is simply a contract between a donor and APDA wherein the donor gives APDA a specified amount. APDA agrees to make specified annual payments, paid in equal quarterly installments, for life to one or two beneficiaries.

A Deferred Gift Annuity allows a donor to make a current gift, delay receipt of the payments until some pre-selected future date, and still qualify for an income tax charitable deduction now. For retirement-planning purposes, this date can be selected to coincide with the anticipated date of retirement. A Charitable Gift Annuity to APDA offers many attractive benefits to the donor and is a powerful planning tool.

FAQ’s regarding Gift Annuities

How are the payments for charitable gift annuities determined?

Annuity rates are based on the age of the annuitant and in the case of a deferred annuitant, the annuity’s start date.

APDA is able to set annuity rate provided we comply with any applicable state regulation. APDA has the option to follow the schedule of recommended maximum rates published by the American Council on Gift Annuities and reserves the right to negotiate lower rates should the rates be published by the American Council on Gift Annuities not support the current market rates.

The amount of the deferred gift annuity payment depends upon the age(s) of the donor receiving the annuity and the amount of the gift.

Are the funds I contribute for a gift set aside and invested to secure my annual payments?

Yes. The amount the donor transfers is set aside. In addition the annuitant’s security goes far beyond the specific funds and is backed by all the unrestricted assets of APDA.

Can I make a charitable gift annuity for more than one person?

Yes. Gift annuities can provide for payment to two persons. The most common type of two–life annuity is the joint-and-survivor annuity for husband and wife. This allows for payment to be made to both annuitants for their joint lifetime. Upon the death of the first annuitant, the payments are continued for the lifetime of the survivor.

How are the gift-annuity payments taxed?

For tax purposes, a gift annuity contribution to APDA is treated as part gift and part purchase of an annuity. For tax purposes, the annuity receives advantageous tax treatment in that a portion may be tax-free. If acquired with appreciated stock, a portion may also be taxed as capital gain.

Can the beneficiary of a deferred gift annuity be someone other than the donor?

Yes. You may name anyone, a parent, a sibling or friend. The payments would be made directly to the designated recipient and be taxed in their tax bracket, but you would receive a deduction that reduces your income tax.

How does a charitable gift annuity work?

In exchange for a gift of cash or marketable securities, APDA will contractually guarantee to pay you a specified annuity for as long as you live.

Can the deferred gift be made immediately to APDA, the actual receipt of the annuity payments delayed until later?

Yes. With a deferred charitable gift annuity you can give APDA now and designate the time in the future when payments are to begin.

Can a deferred gift annuity supplement a qualified retirement plan or an Individual Retirement Plan?

Deferred payment gift annuities can add to retirement income.

For further information please call APDA at 1-800-223-2732.

Please note: Regulation of gift annuities varies from state to state. It may not be possible for the APDA to issue gift annuities in certain states.

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