| Type of Donation |
Charitable Gift Annuity |
Bequest by Will |
| Income Payment Basis |
Based on rates prepared by a qualified actuary. Rates are higher for older people. |
Donor retains all income and access to property as nothing is transferred prior to death. |
Frequency of Payment to Donor
|
Annually or more frequently. |
Not applicable. |
Income Beneficiary
|
One or two people may be named in the agreement. |
Donor enjoys all income and other property rights for life |
| Taxation of Income |
A portion is reportable as ordinary income or capital gains by beneficiary. Balance is tax fee for the life expectance of the annuitant.
|
All income from assets taxed to donor. |
Income Tax Deduction for Gift
|
The difference between the fair market value of the initial gift amount and the actuarial value of the annuity.
|
No deduction because no gift completed during lifetime. |
| Disposition at Death |
Amount not required to make annuity payments is used for charitable purposes. |
At death, assets that are left via will are transferred to charitable recipient(s). |
Investment of Funds
|
Funds are invested to yield returns deemed necessary to fulfill the terms of gift annuity agreement. |
Donor responsible for investment of assets for remainder of lifetime. |
| Funds Returnable to Donor |
Annuity payments only. |
Not applicable. |
Basis for Finding Deductible Value of Gift
|
1. Cash—Face value.
2. Securities—Average of the high and low of market value on date of transfer.
3. Other property—Appraisal.
|
Fair market value of assets is deductible for purpose of estate tax liability if applicable.
|
| Advantages to Donor |
1. Initial income tax deduction.
2. Payments partially free of tax for period of time.
3. Donor reports capital gains at what may be lower tax rates over his or her life expectancy.
|
1. Donor controls property during lifetime.
2. Gift can be specified amount, specific assets, percentage of estate, or all or portion of residue of estate.
3. Estate tax savings may apply.
|
| Value to Charitable Interest |
Amount not required to make annuity payments is used for charitable purposes. |
Assets given via will provisions transferred to charitable recipient at death of donor and other beneficiary(ies) where applicable. |
Governmental Influence on Plans
|
Consult with appropriate advisors for applicability of state and federal laws. |
Consult with appropriate advisors for applicability of state and federal laws |
