Charitable Gift Annuity

What is a Charitable Gift Annuity?

A Charitable Gift Annuity is a gift vehicle that provides fixed income for life. In exchange for your gift you receive income periodically each year. You are eligible to take a tax deduction in the year the gift is made and in most cases a large portion of each payment is tax free.

Advantages to Charitable Gift Annuities

  • Receive fixed income for life with a portion being tax free
  • Receive a charitable income tax deduction in the year you make the gift
  • Make a gift to Hesston College that helps the college and students for years to come

If you let Hesston know of your plans, you will become a Legacy Partner

How a Gift Annuity Works

A Charitable Gift Annuity is a contract between Everence (Hesston College) and you, the donor. When the contract begins you give cash, securities or other assets to fund the contract. You then receive fixed income payments on a schedule you choose for your lifetime. Since this is a charitable annuity you receive a tax deduction the year the annuity is formed. Each payment also has a considerable portion that is tax free income for a set number of years. Once the tax free portion of those payments end, you continue to receive the whole payment amount as taxable income. The amount of interest paid on the annuity changes with a person’s age, if the annuity is for one or two lives, and if the payments are delayed or taken immediately. Through a Charitable Gift Annuity Hesston College on average receives about 50% of the initial gift amount after your lifetime. Charitable Gift Annuities can be set up for one or two lives. This can be a great way to make a charitable gift while also providing fixed income for you, you and your spouse, or a loved one.

Example: Give a Gift that Pays you Back

Mr. & Mrs. Hess, who are 68 years old, decide they would like to give $25,000 to Hesston College. They would be able to take a $6,059 charitable tax deduction this year. They will also get fixed income for life. Every year they will receive $1,000 with $869 of that being tax free. The Hesses would receive a payout rate of 4% and if you factor in the tax savings, 5.26%. A Charitable Gift Annuity can be a great way to support the Hesston Experience and Christ-centered education at Hesston College.

If we use the same example but it is funded with appreciated stock, it would look like this: Mr. & Mrs. Hess, who are 68 years old, decide they would like to give $25,000 to Hesston College using appreciated stock. The stock has a cost basis of $10,000 with a current value of $25,000. Through using a Charitable Gift Annuity they experience a partial bypass of capital gains tax on the transaction saving them $800. Additionally, they would be able to take a $6,059 charitable tax deduction this year. They will also get fixed income for life. Every year they will receive $1,000 with $869 of that being tax free. The Hesses would receive a payout rate of 4% and if you factor in the tax savings, 5.26%. A Charitable Gift Annuity can be a great way to support the Hesston Experience and Christ-centered education at Hesston College.

(Rates are subject to change. Please contact us today to see a personalized illustration.)

If you are interested in learning more about or making a Charitable Gift Annuity, please contact your development officer. We are excited to announce that we have partnered with Everence and their financial planners to work alongside you in offering enhanced charitable giving options. If you have a preferred financial institution that you would like to work with we are happy to do that as well. Please note that the information provided is not legal or tax advice.