How Does a Charitable Gift Annuity Work?

A charitable gift annuity is a contract between you and Capital Health whereby the Development Office sends you an agreement in exchange for your transfer of cash, stock, or bonds. This agreement defines information such as the rate for the annuity payments and the recipient(s) of and schedule for those payments.

For example:how it works
John and Mary, age 70 and 72, consider the doctors and nurses at Capital Health to be part of their family. The couple's children, now grown, were born here and both John and Mary have received excellent medical care over the years. As they reflect on the role Capital Health has played in their lives, they wish to make their own contribution to its mission despite their modest, fixed income.

The couple has a small portfolio of appreciated securities. They decide to transfer $5,000 worth of stock to Capital Health. In return, Capital Health provides them with a contract that provides for annuity payments totaling $300 annually based on the American Council on Gift Annuities’ current recommended rate of 6.1% for a two-life annuity at ages 70 and 72. In addition, they receive a one-time charitable deduction of $1,803. And, because John and Mary have used an appreciated asset to fund the annuity, they reduce their capital gain tax.

Recommended Charitable Gift Annuity Rates

Single Life
 
Age
Rate
 65  6.00%
 70  6.50%
 80  8.00%
 85  9.50%
 90  11.30%

Two Lives
 
 Age Rate
 65/65  5.60%
 65/70  5.70%
 70/75  6.10%
 75/75  6.30%
 75/80  6.60%
 80/80  6.90%
 85/85  7.90%
 90/90  9.30%

* rates are approximate – specific rates determined by exact age

 

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