What is a Charitable Gift Annuity?
A contract agreement through which a donor makes a gift of cash or property to MBF in exchange for MBF’s promise to make fixed payments for the lifetime of one or two individuals. Funds remaining in the annuity account upon death of the annuitant(s) are used by MBF to support the donor’s church or another Christian ministry selected by the donor.
A donor wants to make a gift to their church or another Christian ministry and receive fixed income for the future.
Donor and MBF enter into a charitable gift annuity agreement.
- Fixed Payments for Life – Fixed payments to one or two individuals for life.
- Tax-Free Payments – A portion of each payment may be tax free.
- Rates by Age – Annuity payout rates are based on the annuitant’s age.
- Tax Deduction – Donor receives a federal income tax deduction.
Person who desires fixed payments for life. Beneficial for persons with cash or appreciated property that produces little or no income.
- Duration – A donor gives cash or appreciated property to MBF. In exchange, MBF makes fixed payments for the lifetime(s) of one or two individuals.
- Payout Rate – Gift Annuity payments are based on a rate schedule. MBF follows rates suggested by the American Council on Gift Annuities (ACGA). Under the ACGA rates, the older the age of the person receiving the gift annuity payments, the higher the rate.
- Taxation of Payments – A predetermined portion of each gift annuity payment is tax free, and the remaining amount of each payment is taxable at either capital gain or ordinary income tax rates.
- Timing – A Gift Annuity contract can begin making payments immediately (a Current Gift Annuity) or defer payments for at least one year (a Deferred Gift Annuity). MBF gift annuity payments are typically made on a calendar quarter basis.
Want More Information?
Download a printable version of Charitable Gift Annuity information.
MBF representatives meet confidentially with individuals, couples, and families to assist with estate and gift planning. Contact us if you would like to meet with a representative.