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Charitable Gift Annuity

A Covenant Charitable Gift Annuity is an irrevocable contract in which the Evangelical Covenant Church agrees to make payouts to the annuitant(s) for life in return for a contribution of cash or appreciated securities.(1) At the death of the last annuitant, the amount remaining in the annuity is distributed to one or more Covenant ministries designated by the donor. Covenant Charitable Gift Annuities have been offered for more than 60 years, and represent over 440 active annuity contracts that total more than $14 million in future gifts for Covenant ministries.


The table below shows current annual payout, tax-excludable portion, and charitable contribution deduction for a $10,000 cash gift, based on annuity rates effective January 1, 2012. Since the rates are established by the American Council on Gift Annuities, they are subject to change at any time.


Charitable Gift Annuity Information

Age of
Annuitants
Annual
Annuity
(2)
Tax-Free
Portion
(3)
 Charitable
Deduction
(4)
Payout
Rate
1 @ age 65 $470 $361 $2,811 4.7%
1 @ age 75 $580  $468 $4,186 5.8%
1 @ age 85 $780 $667 $5,461 7.8%
2 @ age 65 $420 $317  $2,101 4.2%
2 @ age 75 $500 $397 $3,490 5.0% 
2 @ age 85 $670  $561 $4,664 6.7%

      


Some states have special regulations which apply to charities offering gift annuities; the Evangelical Covenant Church complies with these regulatory requirements. 

If you would like a personalized example of Charitable Gift Annuity payouts, please contact us. [view Directory] You can also request more information from our info page.

(1) Unlike other types of life income agreements, a portion of the annual payout from a Charitable Gift Annuity is considered to be “return of principal” over the life expectancy of the annuitant(s).  

(2) These amounts reflect rates currently in effect. Annuity payouts may be made monthly, quarterly, semi-annually or annually. 

(3) A portion of the annual payout amount is tax-free over the actuarial life expectancy of the annuitant(s). After the life expectancy is exceeded, the payouts are fully taxable.

(4) The charitable deduction will vary depending on the monthly federal mid-term rate established by the IRS. The charitable deduction goes to the purchaser(s) of the gift annuity.

 
 
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