Gift annuity rates are highest in 16 years

03/01/2024

2024 is giving new reasons to consider a charitable gift that also pays you: a charitable gift annuity.

Set by the American Council on Gift Annuities, payout rates are at their highest in 16 years, making now a great time to consider this gift that benefits you and the Banner Health Foundation. This gift instrument provides you with stable, regular income, regardless of the economy. After your lifetime, the remaining amount becomes part of your legacy at the Foundation, allowing us to support vital health care programs and services well into the future. You can even designate today how you want the gift put to use in the future.

This gift instrument provides you with stable, regular income, regardless of the economy.

Here's how it works: you agree to make a gift to the Foundation and we, in return, agree to pay you (and someone else, if you choose) a fixed amount for the rest of your life. Your gift is invested to grow over time and upon your passing, the Foundation receives the balance.

“Charitable gift annuities are an exciting way to give if you are a donor looking for a gift that gives back,” explains the Foundation’s Director of Planned Giving, Emily Leva, MSW. “With three rate increases in the last 18 months, including the most recent rate increase on January 1, 2024, that means higher payouts so donors get more in return, all while making a philanthropic impact. It’s a win-win for both parties.”

You can also qualify for a variety of tax benefits depending on how you fund your gift. By donating cash or appreciated property, you qualify for a federal income tax deduction if you itemize. In addition, you can minimize capital gains taxes when you fund your gift with appreciated property. Another recent change approved by Congress now allows a one-time tax-free transfer of up to $53,000 directly from an IRA to fund a charitable gift annuity.

“There is still a belief that a charitable gift is only made with cash, but there are so many other giving vehicles that donors can utilize to make a real difference for organizations they care about,” says Leva. “Some of my favorite conversations with donors are around those other giving vehicles, such as stock, charitable gift annuities, and insurance policies. Many are thrilled to know that there are excellent tax advantages available while supporting cherished causes.”

Why are charitable gift annuities such an all-star way to give? “Because there is flexibility in the way they are funded, excellent tax benefits to the donor, and they are simple to set up,” Leva says, adding that Charitable Gift Annuities are created with a simple contract between the donor and the Foundation that does not require the services of an attorney.

An example of how it works

Dennis, 77, and Mary, 75, want to make a contribution to the Foundation but they also want to ensure that they have dependable income during their retirement years. They fund a $250,000 charitable gift annuity with appreciated stock that they originally purchased for $100,000.

Based on their ages, they will receive an annual payout of 6.3%, which means that they will receive $15,750 each year for the remainder of their lives. They’re also eligible for a federal income tax charitable deduction of $99,986 * when they itemize. *Based on a 5.8% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.

Begin the conversation at home

Download your free Estate Planning Tool Kit. Also, learn more about the many benefits of a charitable gift annuity in our FREE guide Charitable Gift Annuities: Gifts That Give Back.

Ready to talk?

Contact Emily Leva at 480.335.4876 for first steps or additional information on charitable gift annuities and the many other giving vehicles available that help to support Banner Health.