Charitable Gift Annuities Consider a gift annuity if any of the following would be of benefit: Receive guaranteed fixed payments for life or a period of years, Convert a savings account or other low-yielding asset into partially tax-free income for life. Transfer appreciated stock in return for lifetime payments saving income and capital gain taxes. Help some of the world’s children most in need. A Save the Children charitable gift annuity is a contract that allows you to make a gift to Save the Children using cash, appreciated securities or other assets, and guarantees fixed payments to you and/or a loved one for life or a term of years. Payout rates are based on age and are very attractive for older donors. A portion of your payment will be treated as a tax-free return of principal, and you will receive a charitable income tax deduction for the year of the gift. When the contract ends, Save the Children will use your gift for our work with children in need. Example: Mrs. Jordan has been supporting Save the Children for many years through child sponsorship and annual gifts. She would like to make a larger gift, but feels she may need the income from her assets for future living expenses. After learning about charitable gift annuities, she decides to make a gift of $50,000. At her age, she will receive annual payments of $4,000, or 8% of the amount donated, for as long as she lives. In addition, she will be entitled to a charitable income tax deduction for a portion of the amount transferred. But most importantly, Mrs. Jordan is satisfied knowing that she has made a significant gift to support Save the Children’s mission of helping children in need. Representative charitable gift annuity payout rates as suggested by the American Council on Gift Annuities: Single Life Two Lives-Joint and Survivor Age 60 – 5.7% Ages 60 & 60 – 5.4% Age 70 – 6.5% Ages 70 & 70 – 5.9% Age 80 – 8.0% Ages 80 & 80 – 6.9% Age 90 – 11.3% Ages 90 & 90 – 9.3% Frequently Asked Questions What is a charitable gift annuity? A charitable gift annuity (CGA) is a formal contract between Save the Children and you. When you initiate a CGA, you make an irrevocable gift to Save the Children and in turn you’re guaranteed to receive a payment stream for the remainder of one or two lives. Or if you prefer, you can set up a CGA to make payments for a fixed period of years. Please read the Disclosure Statement for more information. Who can be an annuitant? You can establish an annuity for yourself, yourself and your spouse or other loved one, or for one or two other people. If an annuitant is not a spouse, there may be gift and estate tax issues to consider. Also, you may only assign your right to receive payments to Save the Children. What type of tax deductions may I be entitled to? You may be entitled to income, estate and gift tax deductions equal to the difference between the value of the asset you transfer and the present value of the annuity payments you may expect to receive over your lifetime. It is recommended that you consult with your tax advisor on specific tax issues. How is the payment rate determined? Rates are determined by the age of the annuitant(s). Save the Children follows the annuity rates suggested by the American Council on Gift Annuities, a national tax-exempt association of charitable organizations. Will my payments change due to stock market fluctuations? No. The payment amount is set permanently when you make the gift, and it never changes once payments begin. How are my payments guaranteed? State insurance laws require that we maintain a reserve fund to ensure future payments. In addition, the promise to pay the annuity is a general obligation of Save the Children, backed by all of its assets How will my payments be taxed? Federal tax law treats a portion of each annuity payment as a tax-free return of principal over the life expectancy of the annuitant(s). The other portion of each payment will be taxed as ordinary income. If the annuity is funded with long-term appreciated securities, a portion of each payment will be considered capital gain. If I use appreciated securities to fund a CGA, can I avoid capital gains tax? You will avoid capital gains tax on the part of the property that is considered a gift. The rest of the gain will be spread over your life expectancy, if you are one of the payment beneficiaries. What type of paperwork do I need to complete? You only need to complete a one page Annuity Information form providing Save the Children with information necessary for establishing a gift annuity agreement. Once the gift and form is received by Save the Children, we will prepare a CGA agreement for your signature. How can I learn more information? You may contact Cynthia Dileo at 203-221-4152 or 800-544-4470 to obtain specific information on how a charitable gift annuity may benefit you. You may also send an e-mail inquiry to plannedgifts@savechildren.org and one of our staff members will promptly respond to your request. Our mailing address is: Save the Children, 54 Wilton Road, Westport, CT 06880