Some
donors
prefer
to make
outright
gifts of
cash or
other valuable
assets
to their
favorite
charity.
Other individuals,
although
they would
like to
make an
outright
gift, either
depend
on the
income
from their
assets
for daily
needs or
simply
do not
wish to
part with
the income
during
their lifetime.
Typically,
these donors
wait and
transfer
assets
to a charity
through
their Will
or Trust.
The
Winter
Haven Hospital
Foundation
recently
introduced
a gifting
technique
that allows
a donor
to make
a charitable
contribution
to our
Foundation,
while at
the same
time retaining
a guaranteed
lifetime
income
either
for themselves
only, jointly
with a
spouse,
or for
someone
else entirely.
This technique
is known
as a "Charitable
Gift Annuity."
A
Charitable
Gift Annuity
is a "split
interest"
gift. The
ownership
interest
in the
donated
gift (which
could be
cash, stock,
or many
different
types of
assets)
is divided
into 2
parts,
a stream
of income
for one
or more
lifetimes,
known as
the income
interest,
and the
principal
remaining
after the
income
term or
the remainder
interest.
So, in
effect
a donor
transfers
an asset
to The
Foundation
and in
return
receives
a current
income
tax deduction
and a lifetime
income,
some of
which is
tax-free.
In
a lot of
situations,
the Charitable
Gift Annuity
actually
has the
potential
to immediately
increase
an individuals
current
income
from the
donated
asset.
A portion
of this
income
will be
income
tax-free,
thus giving
the person
another
increase,
plus an
income
tax deduction
from the
asset transferred
to the
Foundation.
As an example;
a 75-year-old
donor wishes
to utilize
a certificate
of deposit
(CD) for
her gift.
In this
case she
would receive
a guaranteed,
lifetime
income
of 8.2%
of the
amount
of the
CD.
In addition
approximately
55% of
that income
would be
completely
tax-free.
Based upon
current
CD rates,
which are
around
5%, the
charitable
gift annuity
would substantially
increase
her income.
This, of
course,
does not
consider
the fact
that she
will receive
an up-front
income
tax deduction.
The Charitable
Gift Annuity
offered
through
the Winter
Haven Hospital
Foundation
offers
great benefits
for those
who, under
current
circumstances,
would like
to give,
but want
to maintain
or increase
current
income.
