A charitable gift annuity provides fixed payments to you for life in exchange for your gift of cash or securities to Edmundite Southern Missions. Gift annuities are easy to set up and the payments you receive are secured for as long as you live.
A charitable gift annuity could be right for you if:
- You want to maintain or increase your income.
- You want the security of fixed, dependable payments for life.
- You want to save income taxes or capital gains taxes.
- You would like income that may be partially tax-free.
- You are considering a gift amount of $5,000 or more.
- You are at least 70 years of age.
How it Works
1. You make an irrevocable gift of cash, securities, or other property to edmundite.
2. In exchange, edmundite pays you a fixed amount each year for the rest of your life.
3. When your gift annuity ends, its remaining principal passes to edmundite.
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A simple contract
A charitable gift annuity is a simple arrangement between you and Edmundite Southern Missions that requires a one or two page agreement. There are minimal or no costs to you to establish the arrangement and no costs at all to maintain it.
Fixed payments for life
In exchange for your irrevocable gift of cash, securities, or other assets, Edmundite Missions will pay you a fixed amount each year for life.
- Payments last for your lifetime. You cannot outlive your payments.
- Payments are predictable. Your payments will not be affected by investment performance or market conditions. You will get the same amount each year.
- Payments are very secure. They are backed by the general resources of Edmundite Southern Missions, not just by the assets you donate.
Part of each payment typically will be tax-free for many years. This tax-free portion makes the payments more valuable than an equal amount of fully taxable income. The amount of this tax-free portion will be greater if you give cash than if you give stock or other appreciated property.
Who can receive payments?
You decide who will get the payments from your gift annuity. Usually, this will be you, or you and your spouse. You can, however, select any one or two people to receive the payments from your gift annuity. For example, you may wish to provide income for parents, a sibling, or a faithful employee.
Payout rate depends on age
The older you are when you make your gift, the greater the payment rate you will receive. If you choose other people to receive the payments from your gift annuity, their ages at the time of your gift will determine their payment rate. Our minimum age is 70.
Sample Annuity Rates
|Gift Amount||Age||Payment Rate||Annuity||Deduction|
You will earn an income tax charitable deduction in the year of your gift. If you cannot use the entire deduction that year, you may carry forward all unused deduction for up to five additional years.
If you give appreciated property such as stock to create a gift annuity, you will avoid tax on some of your capital gain in the property. Even better, if you are the payment recipient of your gift annuity, you will be able to pay the tax on the rest of your capital gain in installments over many years.
By removing the gift assets from your estate, you may also reduce future estate taxes and probate costs.
Assets to consider
Cash currently held in a savings account, bank CD, or money-market fund makes an excellent funding asset. Usually, a gift annuity will provide you with larger payments than any of these investments.
Securities, especially highly-appreciated securities that you have owned for one year or more, are also an excellent funding asset. Giving them to us in exchange for a gift annuity will allow you to unlock their value to increase your cash flow and avoid substantial capital gains tax at the same time.
Helen Thomas is a 71 year-old widow. She would like to make a significant gift to Edmundite Southern Missions, but she is dependent on the income produced by her investments. One of these investments is stock in XYZ Widget Corporation that she and her late husband purchased many years ago for $3,000.
Her stock is now worth $10,000 but provides little income – about $121 after tax. Helen is reluctant to sell her XYZ Widget stock to reinvest in higher yielding assets because she will have to pay $1,400 in capital gains tax in the process. This will leave her with just $8,600 to reinvest.
Helen is pleased to learn that she can make a significant gift to Edmundite Southern Missions and increase her cash flow by giving her XYZ Widget stock to Edmundite Missions in exchange for a gift annuity. She can also save substantial income and capital gains taxes at the same time.
|Tax result||Cash flow before tax||Cash flow
(39.6% tax rate)
|Helen keeps her stock||None||$200||$121|
|Helen sells and reinvests for 4.0% yield||Owes $1,400 capital gains tax||$344||$208|
|Helen funds a 5.3% gift annuity||$4,014* income tax deduction
Avoid tax on $2,810* of capital gain
*Deduction amount and capital gains tax avoided may vary depending on the timing of the gift.