How a CGA works

The diagram below accompanies THIS article. You can take unused or underused assets like CDs and savings accounts that are yielding low returns to fund a charitable gift annuity. The income from these assets is currently being taxed. However, establishing a Wycliffe charitable gift annuity allows a portion of the income to be tax free. […]

The diagram below accompanies THIS article.

You can take unused or underused assets like CDs and savings accounts that are yielding low returns to fund a charitable gift annuity. The income from these assets is currently being taxed. However, establishing a Wycliffe charitable gift annuity allows a portion of the income to be tax free. The payout rate will also be considerably higher than what CDs or savings accounts currently yield.

Here’s how CGAs work:



For instance, a 90 year-old partner would receive a 9.5% rate (as of February 1, 2009). On a gift of $10,000, that would provide an annual income of $950, of which $799.90 would be tax free.

You can also use other assets such as appreciated stock or mutual funds. Using these would reduce your capital gains tax and provide you with tax-free income for life.