Charitable gift annuities are a great way to enhance your financial picture and take advantage of tax benefits while making a lasting gift to God’s Kingdom work.
A gift annuity is a relatively simple contract between you and the Louisiana Baptist Foundation.
You transfer cash or other liquid assets, such as stock, bonds, or mutual funds, to the Foundation; the Foundation pays you a fixed income – an annuity – for life. The contract can be written for the life of an individual or for two lives.
The gift annuity agreement allows you to name the ministry that will receive the remainder of the fund after your lifetime. That beneficiary can be your church, a Baptist institution or ministry, or divided among several ministries.
Creating a charitable gift annuity (CGA) offers several tax advantages to you, the donor.
n Gift Annuities qualify for a partial income tax deduction in the year the gift is made.
n A portion of each annuity payment is considered to be “return of principle” during your projected life expectancy and is not subject to income tax.
n Capital gains tax on appreciated securities can be partially avoided at the time of the gift. Federal estate and gift taxes are generally avoided on the amount donated to a gift annuity for you and your spouse.
One thing to keep in mind: Recently several non-profits and ministries are suggesting that CGA’s can be used as a retirement plan.
While the annuity can enhance income during retirement years, it should not be viewed as a retirement plan on its own merits.
The stream of income from a gift annuity is “guaranteed” by the organization that issues the contract. Particularly in today’s cultural climate, changes in legislation could affect the ability of the organization to honor its agreement.
The CGA should always be viewed as a gift first, then as a potential stream of income.
Here are a couple of stories of Charitable Gift Annuities issued by the Louisiana Baptist Foundation.
The Bowers:
Rev. St. Clair and Annie Bower gave so much of their life to so many, especially in South Louisiana where they established many churches. They are still giving even now that they have gone home to be with the Lord. In 1986 the Bowers established a gift annuity with the Louisiana Baptist Foundation.
Subsequently they received an annual income over the next 18 years until Mrs. Annie’s death. The total income they received exceeded the amount of the original gift.
The remaining gift balance, which also exceeded the original gift, continues to provide Bibles to people in the community where they lived and for scholarships for students pursuing Christian vocation.
Pastor and his daughter:
A well-known Louisiana pastor and theologian established a gift annuity that payed an income to himself first and then to his daughter after his death.
The original Charitable Gift Annuity was established in 2003 with $30,000.
Over the next 11 years the annuity payments to the pastor and his daughter totaled $19, 800. The remainder was left to benefit scholarships for Christian education was $18,500.
For more information regarding charitable gift annuities or other types of gifts that can benefit Baptist ministries, contact the Foundation at 877.523.4636 or go to www.LBFinfo.org.
