Charitable Gift Annuity
A Covenant charitable gift annuity is an irrevocable contract where 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.
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 February 1, 2009. 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 |
$530 |
$353 |
$3,474 |
5.3% |
| 1 @ age 75 |
$630 |
$464 |
$4,543 |
6.3% |
| 1 @ age 85 |
$810 |
$658 |
$5,678 |
8.1% |
| 2 @ age 65 |
$490 |
$326 |
$2,525 |
4.9% |
| 2 @ age 75 |
$560 |
$408 |
$3,694 |
5.6% |
| 2 @ age 85 |
$700 |
$559 |
$4,900 |
7.0% |
(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.
For more information, we suggest you read our brochure on Covenant Charitable Gift Annuities.
If you’d like a personalized example of how a charitable gift annuity might work for you, contact your local Covenant Trust Company Financial Services Representative. [view Directory] Examples are also available on our Gift Legacy pages–select ‘Create Your Plan.’