Planned Giving
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Charitable Gift Annuities

Charitable gift annuities are a very flexible way to make a gift to the Eight/KAET. They can be designed to provide a fixed income for life for you and/or others you choose. They are easy to create and can be funded with gifts of relatively modest amounts (starting at $10,000.) Charitable gift annuities are the second most common vehicle donors use to make a legacy gift.

Here’s how the Eight/KAET charitable gift annuity works:

  • You transfer cash or other assets to the ASU Foundation on behalf of Eight/KAET. This involves the completion of a simple agreement and can normally be done by mail.
  • You will receive generous fixed payments annually (or more frequently, if desired). The amount of your payment is a percentage of your gift at the time your gift is funded and will not change with interest rate and investment market fluctuations.
  • You will be entitled to an immediate charitable income tax deduction. In addition, part of each annual payment is received tax free for a period of time.
  • If you would like, you can also choose to name another person (typically a spouse, parent, or sibling) to receive payments with you, instead of you, or following your lifetime for the remainder of his or her life.
  • The assets used to fund your gift annuity will generally be removed from your estate for probate and tax purposes.
  • You make a significant charitable gift to Eight/KAET equal to a portion of the amount used to fund your gift annuity agreement.
Many persons choose to fund more than one gift annuity agreement with the Eight/KAET over time. As payment rates increase with age, each gift annuity generally features larger payments.

When property such as stock, mutual funds, or other securities that have increased in value is given for a gift annuity, the charitable deduction is typically based on the full value of the property, not just its original cost.

In addition, the part of the capital gains tax that would be due on a sale of the gift portion can be avoided at the time of the gift, and the rest of the gain can be reported over the annuitant’s life expectancy. The use of appreciated, low-yielding assets to fund a gift annuity can thus be an excellent way to completely bypass capital gains tax at the time of your gift, enjoy a current charitable income tax deduction, and gain the advantage of reporting a portion of each payment at lower, more favorable capital gain tax rates for a number of years.

Typically, charitable gift annuities are created for a single life or for two lives. The rates are established by a national body that most charitable organizations and the ASU Foundation follow. The rates are based on actuary tables of life expectancy. Therefore, the rates go up as the donor ages; and the rates for two lives are typically lower than for a single life. Generally, charitable gift annuities are most attractive for donors who are at least 70 years of age. Also, in the case of a "deferred gift annuity" when the payouts will be delayed to a future date, a larger amount may be paid out.

Eight/KAET will be happy to calculate the rates and benefits for any prospective participant for a current or deferred gift annuity. All we will need to know is the date of birth of the donor or donors that would be covered by the charitable gift annuity.

 

All Planned Giving Options:

Wills and Living Trusts              Charitable Gift Annuities Charitable Remainder Trusts
Retirement/Life Insurance Gifts Real Estate Gifts             Charitable Lead Trusts         

 

Gary McMahan For more information, please contact:
Gary McMahan
Associate Director, Development

602-496-9693
gary.mcmahan@asu.edu