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CHARITABLE GIFT ANNUITIES

 

Issued by the Southern Baptist Foundation

 

     An annuity is a payment of a fixed amount of money at regular intervals of time.  A charitable gift annuity (CGA) involves giving cash or securities to an organization in exchange for them paying you regular income for the rest of your life. The agreement is documented in a fairly standard contract that does not require a lawyer to complete.

 

     To help in the Lord’s work in Hawaii, the national Southern Baptist Foundation (SBF) became licensed to issue CGA’s in Hawaii.  The SBF will contractually agree to make annuity payments in exchange for a gift that will eventually go to the charity designated by the purchaser of the CGA. The designated charity can be a ministry within the Hawaii Pacific Baptist Convention.

 

      CGAs are designed to provide attractive fixed payments for the annuitant (the beneficiary).  The rates are higher the older the annuitant. Currently the rates are:

 

                      One annuitant              Two annuitants

                      Age        Rate              Ages        Rate

                      65          4.7%             65-65       4.2%

                      70          5.1%             70-70       4.6%

                      75          5.8%             75-75       5.0%

                      80          6.8%             80-80       5.7%

                      85          7.8%             85-85       6.7%

 

      The rates are lower if there are two annuitants, as the payments continue until the last annuitant passes on.  

 

How A CGA Works

 

       -  You transfer cash or securities to The Southern Baptist Foundation.            In exchange, they pay you fixed income for life.

 

       -  The fixed income can be quite high depending on your age.

 

       -  A portion of your income stream will likely be tax-free.

 

       -  You will receive a charitable deduction for a portion of your gift.

 

       -  Ultimately, your gift will be passed on to the ministry you              designate.

 

The charitable gift annuity is a contract between you and The Southern Baptist Foundation.

 

 

Payments

 

     Payment start times can vary, making CGAs ideal in planning and providing for retirement.

 

     The payments on most CGAs start soon after the gift is received by the Southern Baptist Foundation.

 

     The CGA contract can call for payments to start at a specific later date or at a date between ages 65-75 to be determined later.  The interest rate on a Deferred Payment Gift Annuity is higher than for an Immediate-Payment Gift Annuity, since the payments don’t start right away.

 

An Example  

      Herb, 75, and his wife Edith, 74, decide to use $50,000 from maturing CDs to make a gift in return for an immediate-payment charitable gift annuity that pays them $2,500 (5%) annually until the second of them dies (two annuitants).  They get an immediate tax deduction of $18,573 and $1,918 of each year’s payment is tax free.

     In their tax bracket, they would have to find a taxable investment paying 6.9% interest to receive the same after tax benefit as the charitable gift annuity will provide.

 

Your Case  

 

If you’d like to see how much income you could receive from a CGA and what the effective, after tax, rate would be, we invite you to click on the Southern Baptist Foundation’s Gift Annuity Calculator.  The information you enter and the results of the calculations will be available only to you, unless you later elect to make it available to the SBF.

 

Or call us at 973-1111 and we will be happy look it up for you.

 

Advantages of Giving Through SBF Charitable Gift Annuities

 

     They are standard “cookie cutter” contracts that don’t require engaging        lawyers to execute.

 

     They provide comparatively high interest income.

 

     They result in meaningful gifts to kingdom causes.

 

     They save income taxes, both immediately and over time.

 

     The regular payments are guaranteed by the assets of the Southern        Baptist Foundation.

 

     If you’d like more information, or would like to proceed to enter into a Charitable Gift Annuity Contract with the Southern Baptist Foundation, please give them or us the opportunity to be of assistance.

 

                                        SBF                              HBF

 

        Telephone           800 245-8183                808 973-1111

 

        Website                 sbfnd.org                      hbfnd.org

 

        Address      901 Commerce St., Ste. 600   1801 S. Beretania St.

                         Nashville, TN  37203               Honolulu, HI  96826  

Charitable Gift Annuities

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