Giving for Income
Charitable Gift Annuities
A gift annuity is an irrevocable contract between a donor and Faith that provides a fixed income for the life of the donor or other designated beneficiary. Gift annuities are regulated by the IRS and some state governments.
Fixed interest rates are based on the annuitant's age(s) at the time of the gift. Payments are made quarterly, semiannually, or annually, and a portion of each payment is tax free.
Gift annuities create an immediate charitable income tax deduction for a portion of the gift. If the gift is funded by appreciated assets, a portion of the capital gains tax is excluded and the remainder may be reported over a number of years.
Gift annuities may be based on one or two lives (annuitants).
Payments usually begin immediately, but they can also be postponed a number of years. These deferred annuities often have higher interest rates.
Revocable gifts go by several names: revocable gifts, withdrawable gifts, and deposit agreements. Very simply, they are an agreement whereby the donor allows Faith to use the donor's money until the donor wishes to have it back. As long as Faith has the money, interest is paid to the donor. (The donor may also waive the interest).
Interest rates are variable and are usually higher than those available commercially. Please contact us for current rates. Faith will issue a 1099INT for interest income.
The donor can withdraw the funds with thirty days written notice.
Upon the death of the donor(s), funds remaining on deposit are transferred to Faith, thus avoiding probate.
Pooled Income Fund
Faith's Pooled Income Fund is an investment tool that combines your gift with the gifts of many other donors. The gifts are professionally managed, and each year you will receive a proportionate amount of the fund's income.
A portion of your irrevocable gift can be eligible for a charitable income tax deduction. When you fund your gift through appreciated securities, you can also avoid capital gains taxes.
The fund will provide you with income for life:and the life of a beneficiary if you so choose. Upon the death of the beneficiaries, a proportionate amount of the fund can be used by Faith to provide for the education of its students.
Charitable Remainder Trusts
A charitable remainder unitrust is like a combination of a gift and an investment plan. You place assets in trust, and you (and/or another beneficiary) receive lifetime income from them:then Faith receives the remainder. With a unitrust, the amount you receive as income is a set percentage of the value of the trust assets, redetermined annually.
You also have the option of choosing one of five variations of unitrusts. A unitrust with a net income plus makeup provision, for example, pays only the actual trust yield, even if it is below the stated percentage. Then in later years, when the beneficiary needs more income, the trustee can invest the assets to generate a higher return and make up earlier deficiencies.
This option is excellent for devising a supplemental retirement plan. We can provide you with more details.