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Temple Emanu-El Bulletin Blog

Giving and Receiving (Vol. 90, No. 2)
by Robyn Weinstein Cimbol, Senior Director of Development & Philanthropy


We’ve all been admonished that, “If it sounds
too good to be true, it probably isn’t.”

I want to tell you about a special type of contribution you can make to Congregation Emanu-El that sounds too good to be true but really is true: Charitable Gift Annuities (CGAs).

This donation allows you to make a gift to
Congregation Emanu-El while also:
  • Making fixed-income payments quarterly to you (and
    your spouse, should you wish) for life at attractive rates
  • Providing future tax savings because a portion of the
    income you receive will be treated as a tax-free return
    of your own principal
  • Offering you an immediate tax deduction because a
    portion of the asset you transfer is considered a charitable contribution
  • Minimizing your liability for capital gains tax if you contribute appreciated securities
  • Qualifying you for membership in the temple’s exclusive Heritage Society

What is a Charitable Gift Annuity?
A CGA is a simple, straightforward contract under which Temple Emanu-El, in exchange for a transfer of cash or marketable securities, agrees to pay you a guaranteed fixed income for life. Upon the death of the income recipient, Emanu-El receives the remainder (generally projected to be 50 percent of the original annuity amount). Both you and Emanu-El benefit!

Is it complicated?
A CGA contract is easy to understand, obligating Congregation Emanu-El to pay you a fixed annual income for life. The rate of income depends on your age at the time of your gift. The income is predictable, consistent and not dependent on investment performance. Unlike a private foundation or a charitable trust, which require extensive legal counsel, a CGA is not exclusively for the wealthy. Who can create a CGA, and how much must be given? Emanu-El makes CGAs available to all members and spouses starting at age 70. The minimum amount required is $10,000 for a single-income beneficiary and $18,000 for two beneficiaries. The combination of the tax savings and guaranteed future income make this an affordable option for those who are philanthropically minded.

Who can create a CGA, and how much must be given?
Emanu-El makes CGAs available to all members and
spouses starting at age 70. The minimum amount required
is $10,000 for a single-income beneficiary and $18,000 for
two beneficiaries. The combination of the tax savings and
guaranteed future income make this an affordable option
for those who are philanthropically minded.

How is the rate of life income determined?
Emanu-El, along with most charities issuing CGAs, follows the gift annuity rates recommended by the American Council on Gift Annuities (ACGA). The Council considers investment return projections and actuarial data. Of course, the older you are at the time of establishing a CGA, the higher your income. As a portion of the gift will be for charitable purposes, a CGA pays a lower rate of return than commercial annuities.

Who can benefit from a CGA?
Every individual, subject to age criteria, can benefit from a CGA. CGAs are attractive especially for our members seeking the security and predictability of fixed payments. For many, a CGA can increase cash flow as the income generally is considerably higher than what bonds, CDs and other fixed returns offer. Also, because of the tax benefits, CGAs are especially useful for those who own appreciated securities and have considered selling shares to reinvest for added income but are reluctant to do so because of the capital gains tax implications. Income from a CGA is not dependent on interest rates, and your income is guaranteed for life.

How much income can I expect?
The rate of income, paid in quarterly installments, depends on the number of income recipients and ages. For example, a 70-year-old donor could receive an annual income of 5.1 percent; an 80-year-old donor could receive 6.8 percent; and a 90-year-old donor could receive 9 percent. Also available are two life CGAs that continue to provide income payments through the survivor’s lifetime. If the CGA is to provide income for two lives, then the income depends on the specific ages and is slightly lower. For example, a husband and wife, both 70 years old, could receive 4.6 percent, while two 80-year-old annuitants could receive 5.7 percent.

Are you sure it is legal for Emanu-El to pay me to make a contribution?
CGAs, along with charitable remainder trusts, belong to a special classification of contributions known as planned gifts, life-income gifts or deferred gifts. The temple’s receipt of the donation is deferred during the annuitant’s lifetime. Upon the death of the income beneficiaries, the gift to the temple is completed.

Interested? Want to learn more?
Please contact me by telephone (212-507-9524) or by email ([email protected]) for a confidential conversation about how a CGA might work for you. I have worked with several Emanu-El congregants to establish CGAs, and I would love to help you augment your current income while making a contribution that will benefit Temple Emanu-El
in the future.

You are strongly urged to consult with your personal professional advisors (attorneys, accountants and financial planners) as to whether a charitable gift annuity is appropriate for your circumstances.



 




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