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Deferred Gift Annuity
A deferred gift annuity is a simple contract between you and Chatham University. In exchange for your irrevocable gift of cash, securities, or other assets, the College agrees to pay one or two annuitants you name a fixed sum each year for life, with payments starting at least one year after your gift. The older your annuitants are at the time of the gift and the longer the payments are deferred, the greater the fixed income Chatham can agree to pay.
In most cases, part of each payment is tax-free, increasing each payment’s after-tax value. If you give appreciated property you will pay capital gains tax on only part of the appreciation. In addition, if you name yourself as the annuitant the capital gains tax will be spread out over many years rather than be all due in the year of your gift.
Benefits of a deferred gift annuity
- The annuitants you name will receive fixed annual income for life, in many cases a larger income than the gift property is presently earning for you, starting in the year you choose.
- You will qualify for a federal income tax deduction.
- If you fund the annuity with an appreciated asset, you will incur tax on only part of the gain. If it is funded with cash, a substantial part of the annual payments may be entirely tax-free.
- Your estate may enjoy reduced probate costs and estate taxes.
- You will provide generous support of Chatham University.
Example of a deferred gift annuity:
Mary K., class of 1978, irrevocably transfers $50,000 in cash to Chatham University. As a 45 year-old who wishes to defer her payments for 20 years, Mary K. qualifies for a 20.2% annuity rate and receives $10,100 in income each year starting when she is 65, $1,474.60 of which is tax-free. Mary K. also benefits from a $20,615 charitable deduction in the year that she makes the gift. Finally, Mary K. is able to support, in a major way, a Chatham program in which she is especially interested.
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Giving Back
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"I am Anne de Shazo Robertson Nerin ’51 & I’m finally in a position to donate to the Scholarship Fund, in appreciation of money I was given by Chatham. I believe in giving back…”
A powerful statement, followed by an even more powerful gesture. Through a combination of planned and outright gifts, Anne Robertson Nerin, class of 1951, has been able to achieve her philanthropic goal of establishing an endowed scholarship at Chatham University—helping to plan Chatham’s future while securing her own as well.
The Scott Robertson Endowed Scholarship Fund was established in 2001 during the Keep the Vision Splendid campaign to provide scholarship aid for deserving Chatham undergraduates. There are more than 80 endowed scholarships at Chatham that provide approximately $900,000 per year in financial aid; while this is a significant amount of support, building the pool of scholarship aid is an ongoing priority of the College. By establishing an endowed scholarship, Anne was able to celebrate her 50th Reunion by helping to finance a current Chatham student’s education.
When looking to establish her scholarship fund, Anne decided that a deferred gift annuity was the perfect giving method— a way to give back to Chatham and, by deferring for a year, receive fixed payments at a higher annuity rate for life, thus enabling her to make a substantial donation. “I went to PCW on a scholarship which I appreciated enormously. Therefore I wanted to give back what I had received. I began with one annuity that allowed me to: 1) give back to Chatham,
2) get a tax write off, and
3) provide me with a monthly income for life.
Three birds with one stone! That first transaction worked so well, I made a second and third annuity with the same three benefits. I now had given enough for an endowed scholarship which pleased me enormously.”
Anne is one of several alumnae and friends of the College who chose a unique and often overlooked giving tool—a life income gift. A wonderful way of giving back while looking towards the future. |
