Gordon L. Nelson, CPA, CFP® is a planned giving specialist. Want to get your questions answered? Write him or call him at 435.213.9986.
January 2024
Dear Gordon,
I recently learned about the concept of charitable gifts that can provide a return of income to the donor. I’m curious to understand more about how these types of gifts function. Could you elaborate?
-Curious Donor
Pensacola, FL
Dear Curious Donor,
Absolutely, there are indeed several gift options that can provide income back to you, and they’re gaining popularity. One such option, which many find particularly appealing, is the Charitable Gift Annuity (CGA). Let’s explore why CGAs are attracting attention:
- Attractive payout rates: Currently, CGA payout rates are at their highest in over a decade, making them an appealing choice for many.
- Stability in uncertain times: In an environment where financial markets may seem unpredictable, a CGA offers a sense of security by providing fixed, annual payments for life. This consistent income stream can be a reassuring factor during volatile periods.
- Tax benefits: When you establish a CGA, you’re eligible for a charitable income tax deduction for the portion of the gift that is considered a donation.
- Partially tax-free payments: A portion of the payments you receive from a CGA may be tax-free, enhancing the financial benefits of this arrangement.
- Supporting a cause beyond your lifetime: After your passing, the remaining balance of the CGA goes to the Foundation*, contributing to a lasting legacy in support of wildlife conservation.
- New opportunities: As of January 1, 2023, if you’re 70 ½ or older, there’s an exciting new option. You can now make a one-time qualified charitable distribution/rollover of up to $50,000 from your IRA to fund a CGA, tax-free. This development opens up additional possibilities for tax-smart giving.
If you are interested in more details or in seeing how this could work for you personally, we offer customized illustrations. These include:
- Your personal payout rate tailored to your specific situation.
- Applicable income tax deduction calculated based on your gift.
- Capital gains tax savings.
To delve deeper into how a Charitable Gift Annuity could benefit you or to explore other similar options, feel free to contact me directly for a personalized, confidential discussion. Together, we can explore how you can support wild Florida while also receiving financial benefits.
Best,
Gordon
*The Foundation uses a capable third-party administrator for their gift annuity program in which the Fish & Wildlife Foundation of Florida is listed as the beneficiary of the contract.
