A Donor's Point of View on the Value of a Charitable Gift Annuity

September 12, 2017

Give and receive with a Charitable Gift Annuity

An annuity is the payment of an annual income or allowance. A charitable gift is, well, a gift to charity. Put them together and you have a Charitable Gift Annuity -- the giving technique with something for everyone. It’s an ideal plan for those who’d like to make a significant gift but depend on the income from their assets.

The Richland County Foundation offers Charitable Gift Annuities to donors as one option to help them fulfill their charitable intentions.

Merris Welge and his wife Jean recently set up a CGA at the Richland County Foundation. The Welge’s have two other CGAs; one with the Salvation Army and another with the Sertoma Club.   

Merris likes the investment because it can help a nonprofit organization and provide an income stream to the individual. Additional reasons Merris likes CGAs are the tax deduction and a higher interest rate than a traditional savings account or certificate of deposit.  Plus a portion of the quarterly interest payment may be treated as a capital gain depending on the source of the original gift, resulting in a lower income tax rate.

 “CGAs are good for people over the age of 65 because by that age you should have a better idea of your financial picture for the rest of your life. The logical age to sign up for a CGA is 70 to 80. Although any time past the age of 60, a CGA can be advantageous in certain tax situations,” said Merris.

Consult your professional advisor to determine if a CGA is a good investment for you.

What is a CGA?

A Charitable Gift Annuity (CGA) is a simple contract between a donor(s) and Richland County Foundation. In exchange for a contribution from a donor(s), the Foundation promises to make fixed payments for life to one or two annuitants.

The Foundation invests and manages the contribution, and when the last annuitant has died, uses the remainder of the contribution for its charitable purposes.

The amount of fixed payments paid is based on the age of the annuitant(s). Annuity payments are made in quarterly installments and may be deferred until you reach a specified age. Annuity payments and tax advantages are normally greater when you defer the payments to a later date.

How does it work?

  • Charitable Gift Annuities can be set up for individuals and couples starting at age 60.
  • The minimum amount to set up a CGA is a $10,000 gift to the Richland County Foundation—you can give cash, appreciated stocks, or other marketable securities.
  • If the total contribution is $25,000 or more, a separate named fund with your personal charitable directions will be established upon your death.
  • We set up a contract with you that combines annuity payments with a charitable gift.
  • You receive a stream of income that is fixed, regardless of market conditions.
  • You also receive an immediate tax deduction for the charitable portion of your gift as determined by IRS rules.
  • Upon your death, any residual balance will remain with the Richland County Foundation.
  • Your gift will be placed into an endowment that is invested for long-term return. Earnings from your fund are used to make grants addressing community needs in accordance with fund directions.
  • Your gift—and all future earnings from your gift—is a permanent source of community capital, helping to do good work forever.

 Richland County Foundation follows the annuity rates established by the American Council on Gift Annuities.

Sample one-life rates (lower two-life rates are available):



Annual Annuity Rate
















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