National Lutheran News

Gift and guarantee

Charitable giving is an opportunity to leave a legacy

Every day, resource development professionals are inspired by the faith of generous stewards who make gifts in support of ministry. During the past year, while many donors’ faith in the financial markets may have been tested, their faith in the ministries they support seems to hold firm. Recently, while many donors have been limited in their ability to make gifts of appreciated property, an increasing number have inquired about gifts that provide a steady, dependable stream of income back to the donor.

A charitable gift annuity is such a gift, providing a guaranteed income to the donor for the rest of their life. “What’s left” at death or when you no longer need the annuity is directed to the organizations named as beneficiaries. The key benefits of a gift annuity include:

Fixed, regular payments: The donor makes a gift of cash or other assets and receives fixed, regular payments. Gift annuity rates might be particularly attractive when considering a gift and financial planning.

Tax-free payments: A portion of each annuity payment is considered a tax- free return of principal that continues through the donor’s estimated life expectancy. The tax-free payments may lower the donor’s adjusted gross income for income tax purposes.

Charitable income tax deduction: Donors who itemize their taxes would be entitled to an income tax deduction for the gift portion of the annuity amount.

Flexibility: A deferred gift annuity allows a donor to receive an income tax deduction now, but defer the annuity payments to a later date, e.g., upon retirement. This will also provide a higher annuity rate.

Confidence and trust: Gift annuity payments are backed by all of the assets of the issuing charity. It is income that can be depended upon every month, quarter, or year for the rest of the donor’s life.

Support for ministry: The greatest benefit of a charitable gift annuity reported by most donors is the joy received, knowing their gift will benefit one or more ministries of their church. They may designate any ministries they choose — a congregation, synod, social ministry organization, camping ministry, college, campus ministry, seminary, churchwide ministry, Metro Lutheran, or other ministries special to them — to ultimately benefit from the gift. Many donors of charitable gift annuities have also found that the combination of a fixed income stream and tax benefits helps them increase their overall annual support for ministry.

If a charitable gift annuity might fit well into a donor’s gifting, financial, and retirement planning, she or he can contact a local church body office for a referral to a professional gift planner who can prepare an illustration for them, or they can contact the development office at one of their favorite ministries.

Brenda J. Moore, CFRE, is a gift planner for the Lutheran Planned Giving Partnership of Minneapolis and St. Paul. The Partnership provides charitable gift planning and asset stewardship education services for individuals, congregations, and ministries of the Evangelical Lutheran Church in America throughout the Twin Cities region. All services are available without cost or obligation. Congregations and individuals can contact Moore by calling 507/934-4614 or writing to brenda.moore@elca.org.

The information provided is for illustrative and educational purposes and should not be considered tax or legal advice. Please consult tax or legal counselors before proceeding with an estate plan.