Life Income Gifts

If you are considering a major gift, a “life-income” gift may be an excellent year-end gift. Such a gift can increase your own income!

You could transfer cash or stock to us and establish a “charitable remainder unitrust” or “charitable remainder annuity trust” that would provide you with 5% or greater annual return. This income would be paid to you and/or a loved one for life, after which the assets would be distributed to us. Through such an arrangement, you would be increasing your income and making a meaningful (and tax-deductible) contribution to us at the same time.

Example: Suppose Mrs. Barnes, age 75, purchased some stock many years ago for $10,000 and that the stock is now worth $100,000. But, she receives only $2,000 per year in dividends, or a 2% yield. By transferring the stock to a charitable remainder trust and specifying that she wanted a 6% return for life, she could:

  1. Triple her annual income (from $2,000 to $6,000)
  2. Avoid the capital gains taxes that would otherwise be incurred on a sale of the stock; and
  3. Be entitled to a charitable contribution deduction of approximately $55,000. (The amount of the deduction depends upon the age of the donor, the rate of return specified in the trust, the size of the gift, and other factors.)