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Thoughtful Philanthropy for Lasting Impact

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Enriching Lives for a Better Tomorrow

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Empowering Nonprofits Through Community Grants

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Providing Educational Opportunities

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What is a Charitable Gift Annuity?

A Charitable Gift Annuity (CGA) is a contractual arrangement between a donor and The Community Foundation of Greater Lafayette in which the donor transfers cash or property to The Foundation, and the Foundation agrees to pay a fixed sum of money annually to the donor and/or another person.

Why would someone want to create such an annuity?

Many individuals have used gift annuities to accomplish both income and philanthropic goals. A Charitable Gift Annuity is part investment and part gift. CGAs are excellent ways to increase the income from assets such as stocks, certificates of deposit, or real estate and help your favorite 
charity at the same time.

How does a Charitable Gift Annuity work?

The donor makes an irrevocable gift to The Community Foundation with cash or an appreciated asset (often securities). The donor also selects the annuitant, who may be the donor or a third party. In return for the gift, The Foundation agrees to pay a fixed lifetime income to the annuitant. Payments may be received quarterly, semiannually, or annually. There may be two annuitants (but no more) under a charitable gift annuity. The payout rate for two annuitants is lower than for a single annuitant.

What types of assets can be used to start a Charitable Gift Annuity?

A CGA may be funded in a variety of ways, including, of course, cash. They are frequently funded 
with securities that may have appreciated over the years and may be paying a relatively low dividend. In some circumstances, real estate may be used to fund CGAs.

How much is needed for a CGA?

The minimum gift to fund a CGA is $10,000.

What tax benefits can I expect from a Charitable Gift Annuity?

There are three potential tax benefits: One, in the year that the charitable gift annuity is set up, the donor may take an income tax charitable deduction based on the present value of the gift. Two, some portion of the annuity payments may be income tax-free. Three, if an appreciated asset is used to fund the charitable gift annuity, capital gains tax liability may be spread out over your life expectancy. 

What payout rate will I get from a Charitable Gift Annuity?

The payout rate depends on the age of the annuitant at the time the gift is made:  the older the annuitant, the higher the rate. Also, the rates are lower for a charitable gift annuity for two lives.  Finally, the rates are higher for a deferred charitable gift annuity (where the date of first payment is delayed for a specified number of years). We can provide the current rates, which are very 
competitive and locked in when the annuity is set up. 

What is a Deferred Gift Annuity?

Our gift annuity program permits the donor to postpone the start date of the annuity for a specified period of time—say, until the time he or she expects to retire. Since annuity payments are postponed, both the amount of the annuity and the allowable charitable deduction are significantly increased.

How will my Charitable Gift Annuity benefit my favorite charities?

The Community Foundation is a Foundation for the entire community. A Charitable Gift Annuity can be established with the Foundation, and arrangements can be made for the residuary interest (the assets remaining after the last annuitant passes away) to be placed into an endowment fund. The endowment, held by The Community Foundation, may either be unrestricted or designated to your favorite organization(s). In addition, the fund can be named in honor or in memory of an individual or a family, and it will be invested to generate earnings that will benefit the community or designated organization(s) forever.

Can I change my mind about the annuity once it is established?

Charitable gift annuities cannot be amended or revoked. 

How do I set up a Charitable Gift Annuity with The Community Foundation?

* Contact The Community Foundation of Greater Lafayette.
* Complete a simple two-page application.
* The Community Foundation will provide sample Charitable Gift Annuity agreement forms. It is recommended your financial advisor review the agreement form.
* Arrange for transfer of assets.

Is a gift annuity right for you?

If you can identify with any of the following statements, you may want to consider a gift annuity. 
*  You would like an easy-to-understand, user-friendly way to help make a charitable difference
through The Community Foundation of Greater Lafayette. 
*  You have a modest amount of cash or property to give, but you want to make a significant gift. 
*  You want a significant income tax deduction this year. 
*  You want to receive fixed payments for life that are immune from the volatility of the stock market. 
*  You wish to give a friend or family member income payments for his or her life. 
*  You wish to receive tax benefits now, but delay your payments until retirement. 


The Community Foundation of Greater Lafayette
300 Main Street, Suite 100
Lafayette, IN 47901

Phone (765) 742-9078
Fax (765) 742-2428

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