An example: A $10,000 charitable gift annuity in July 2004 for a single donor age 60,
would have an annuity income to the donor at an estimated 5.7% rate.
The minimum initial contribution for a gift annuity shall be $ 10,000, unless a lesser amount is approved by the congregation president. The minimum contribution for an additional gift annuity by an individual who has previously entered into a gift annuity shall be $ 5,000.
Here is how it works:
- The benefactor makes an irrevocable gift to the Sisters of the Presentation of the Blessed Virgin Mary
- In consideration of the gift, the Sisters agree to establish an annuity for the benefactor at a set payout for the rest of his/her or their lives based on their age
- The benefactor receives an immediate tax deduction for making the gift
- A portion of the annual annuity to the benefactor is tax-free income
- At the time of the benefactor’s death, the remainder of the original gift belongs to the Sisters of the Presentation of the Blessed Virgin Mary to further its mission
A deferred charitable gift annuity is similar to a charitable gift annuity except that the payments are deferred to a future date. A donor may defer payments to years when income is needed more, such as retirement. The donor obtains a substantial charitable income tax deduction in the year that the gift is made. Because payments are deferred, allowing the principal to grow, the donor enjoys a higher payout rate later.