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Charitable Gift Annuities

Provide generous support to WOU and generate a lifetime payment .

A charitable gift annuity is a simple contract between you and WOU Foundation. You make a gift of cash, securities, or other assets to WOU Foundation. In exchange, WOU Foundation agrees to pay you, or one or two other persons, a fixed sum each year for life. These payments are backed by all the assets of the college and will not change regardless of fluctuations in the stock market or the economy in general. The payment amount depends on the age of the annuitant(s) at the time of your gift. The older the annuitant(s), the higher the payment.

The minimum gift amount for a charitable gift annuity is $10,000.

Good Tax News:

  • In the year that you create a charitable gift annuity, you are eligible to claim an income tax charitable deduction for the estimated portion of the assets that will ultimately go to WOU. If you are unable to take advantage of the full amount of the deduction the first year, you can carry it over for up to five additional years.
  • If you fund your WOU gift annuity with cash, you receive a significant portion of the payments tax-free.
  • If you use appreciated securities or other long-term assets to fund an annuity, you bypass much of the capital gains tax that would otherwise be due; and, if you name yourself as an annuitant, you can spread the tax due on any capital gain over your life expectancy at a more favorable capital gains tax rate.

A deferred gift annuity is a variation on a gift annuity. A gift is made and the charitable organization promises in return to pay you an income stream that begins on a future date you specify. Since the payments do not begin for a period of time, the fund will grow without withdrawls until the payments begin. With more money in the fund once payments begin, the payments will be larger than with an immedicate annuity.

An attractive benefit of this arrangement is that is enables a donor to make a gift now and take a charitable income tax deduction now while in a high tax bracket. Income may be deferred, for instance, until after retirement, when the rate of tax will presumably be lower. Deferred gift annuities are creative ways to delay income to pay for chidren's of grandchildren's college expenses, supplement your retirement income, or assist with assisted-care living arrangements that may be inevitable.

A part of each payment, as in any gift annuity, will be tax-free for a period of years. However, the precise amount of each payment will depend on the tax rules in effect when the payments start. Deferred and gift annuity payments cannot begin until one year from the gift date.

Good Tax News:

  • A deferred charitable gift annuity allows you to defer your annuity payment until needed, but you can enjoy the tax benefits associated with a charitable gift annuity in the year of your gift.
  • Both the tax deduction and the level of annuity payment increase with the length of the deferral.
  • Deferred gift annuities, when properly structured, can also provide a source of future income to children, free from gift and estate taxes.

Contact

WOU Foundation 503-838-8281 | or e-mail: foundation@wou.edu

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