Charitable Gift Annuities
Questions & Answers
What is a Charitable Gift Annuity?
A Charitable Gift Annuity (also known as a gift annuity) is, simply put, an agreement between the Oregon Lions Sight & Hearing Foundation and a donor. The donor(s) agree to make a gift of cash or other appreciated assets to the Foundation and in return, the Foundation agrees to pay a fixed amount to one or more individuals for their lifetimes.
How can a Charitable Gift Annuity be established?
The most common gift to establish a gift annuity is cash or stock. Real estate can also be used to establish a gift annuity.
What is the minimum contribution needed to establish a Charitable Gift Annuity?
The minimum value of the asset used to establish a charitable gift annuity with the Foundation is $10,000.00
How are payments determined?
The payout rate is based on the age(s) of the individual(s) who are receiving income from the gift annuity. OLSHF uses payout rates established by the American Council on Gift Annuities (please see the following chart for a sample of current rates)
Current Charitable Gift Annuity Rates
Sample one-life rates of return
Ages Rate %
55 = 5.5%
60 = 5.7%
65 = 6.0%
70 = 6.5%
75 = 7.1%
80 = 8.0%
85 = 9.5%
90 = 11.3%
Two-life rates are also available and are slightly lower.
To determine how much a donor(s) receives as a payment, the payout rate is multiplied by the amount of the donation. For example: if a donor age 80 establishes a charitable gift annuity with the Foundation in the amount of $25,000, the payout rate is 8%. Multiplying the 8% rate by the donation amount of $25,000 results in an annual payment totaling $2,000.
How often are payments made?
Payments are typically made quarterly. However, payments can be made monthly, quarterly, semi-annually or annually.
Do payments have to start immediately?
No. Typically payments do begin immediately after a gift annuity is established, however, a donor may choose to defer payments to a future point. This is called a deferred gift annuity because the donor is making the gift now while planning to receive income in the future.
If a donor chooses to establish a deferred gift annuity, the payout rate could be higher than today's rate. Why would a donor choose to defer their gift annuity payout? It could be that the donor does not need income from the gift annuity today but wishes to assure a steady stream of income for the future.
Can I receive a tax deduction for a Charitable Gift Annuity?
Yes, there is an income tax deduction that the donor receives when establishing a charitable gift annuity.
Are payments taxed?
How a payment to a donor is taxed depends on what type of asset was used to establish the charitable gift annuity.
If cash or a cash equivalent asset (such as a cd, money market fund or most bonds) are used to establish the charitable gift annuity, the payment to the donor(s) will more than likely be considered ordinary income and tax-free income. A portion of the payment made to the donor is taxable. No capital gain income would be reportable.
If an appreciated asset, such as stocks or real estate, which have significant capital gain is used to establish the gift annuity then most of the payments to the donor(s) will be taxed as ordinary and as capital gain income. Relatively little will be tax-free income.
Do I have to fill out a lot of paperwork to establish a Charitable Gift Annuity with the Foundation?
No. Donor(s) who wish to establish a charitable gift annuity with the Foundation sign a simple contract with the Oregon Lions Sight & Hearing Foundation. We will review each part of the gift annuity contract with the donor(s) and we are happy to answer any questions that a donor(s) have about the charitable gift annuity program.
Where does the money go?
When the last person who receives income from the gift annuity passes away, the funds remaining in the gift annuity are used by the Oregon Lions Sight & Hearing Foundation for the charitable purposes designated by the donor.
What are some of the advantages of a Charitable Gift Annuity?
A Charitable Gift Annuity is a win-win. It provides a donor with a steady stream of secure lifetime income and helps the Oregon Lions Sight & Hearing Foundation meet the critical sight, hearing and health assistance needs of Oregonians. Beyond the satisfaction of helping to create a strong, vibrant Foundation, some of the advantages of a charitable gift annuity are:
• Lifetime income
• Fixed payments that will never vary in amount
• Safe, secure, payments as they are backed by the assets of the Oregon Lions Sight & Hearing Foundation
• Potentially offers a higher level of income than was being earned with the asset that was contributed to establish the gift annuity and a portion of your annuity payment is tax free
• Provides an income tax deduction
How do I get started?
If you have questions about the Charitable Gift Annuity program or would like to discuss establishing a charitable gift annuity with the Foundation, please contact us at 1-800-635-4667 or via email at giving@orlions.org
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