Why Give to a Charitable Gift Annuity?
Charitable Gift Annuities (CGAs*) began more than 190 years ago when renowned early American artist John Trumbull needed additional income for his later years. He made the decision to leave a legacy by donating his valuable paintings to Yale University if in return the university provided him with recurring payments for the rest of his life.
Just like in 1830, establishing a CGA today will allow you to leave a lasting legacy while receiving annual payments for the rest of your life. The Kent State University Foundation distributes payments for CGAs with the university according to the individual’s preference - either semi-annually or annually.
Some who receive CGA payments turn around and donate the amount of their payments to charities, including Kent State student support funds. This provides them with a tax break without losing any of their “real” income, while also supporting our outstanding students.
Why Now?
Ohio’s October 2021 rates for one- and five-year CDs were 0.24 percent and 0.34 percent, respectively; these rates are low and subject to change/subject to economic trends. Conversely, CGA rates are fixed, and the older you are, the higher the rate! The current CGA rate for those 80-84 years old is at a fantastic fixed rate of 6.5 percent for a single-life contract with Kent State University. At age 85, a single-life contract CGA with Kent State has a fixed rate of 7.6 percent. Two-life CGAs are also available with rates lower than single-life CGAs, but the payment will continue upon the death of the first annuitant to the surviving annuitant.
If you want a tax break instead of annual payments, a deferred CGA might be a great fit for you. Deferred CGAs can provide you with income after a deferred timeframe you specify (such as five or 10 years from the date of your gift). A five-year deferred CGA rate is now at 4.8 percent for anyone 60 years and older.
For more information about the various kinds of CGAs, their rates and requirements, as well as other planned giving opportunities, consult your financial or legal advisor. You may also contact us or visit our main Gift and Estate Planning website for more information.
(*A CGA is an irrevocable gift with a portion that is tax deductible and a portion that is income.)