Since most of us are living longer and longer, to the age of 85 and older, maintaining steady and secure income is really important. And, many of us have causes we care about deeply. How can we meet both of those goals?
A Charitable Gift Annuity (CGA) may be the right answer. Through a CGA a donor will be able to support their favorite charity or cause; receive a charitable income tax deduction in the year of the gift; and receive fixed income for life, for them, a spouse, partner or another loved one. The CGA can be established for one or two lives.
The amount of the payment is based on the age of the person who will receive the payment from the CGA. The older a person is, the higher the payment. The payment will also be based on the amount or value of the gift. After the donor passes the remaining value of the gift will go to support a fund created at IECF, if the remainder is large enough, which can be named for the donor, their family or a loved one.
For example Jane, aged 78, was interested in a CGA. She learned that with a charitable gift of $50,000, she would receive $3,200 per year for life from the CGA.
A CGA can be funded with a gift of cash or highly appreciated assets, such as stocks and bonds. A gift of appreciated assets can avoid a portion of the capital gains tax. The payments are fixed on the date of their gift, meaning, the payment stays constant even if interest rates or the stock market change.
This may be a good year to use cash to fund a CGA because for 2021, gifts of cash to charity (excluding donor advised funds and supporting organizations) are deductible to 100% of AGI (Adjusted Gross Income), which had previously been 60% of AGI.
Establishing a CGA at IECF is a very simple process with minimal costs. IECF has a license from the State of California to offer CGAs. Because of this, IECF, which currently manages $120 million dollars in assets, is the entity to guarantee payment on a CGA.
For more information on CGAs or other charitable gifting options, please visit our new Planned Giving website at www.iecfplannedgiving.org or call me, Jose A. Marquez, Director of Planned Giving at 951-452-5621 or email me at: jmarquez@iegives.org.