Charitable Gift Annuities: Sound and Worthy Investments
A charitable gift annuity is an excellent way to achieve your philanthropic goals while assuring yourself, or a designated beneficiary like a spouse, child or other loved one, a guaranteed income for life. Many people, especially retirees, invest some of their savings in fixed-income investments such as certificates of deposit or treasury bills, thereby locking up a reliable stream of lifetime income. If you are philanthropically inclined, a charitable gift annuity may be the perfect fixed-income choice for you.

A gift annuity is a contract between you and Volunteers of America, in which you transfer cash or securities – such as stock, bonds or other assets – in exchange for guaranteed, lifelong payments. At this time, rates for an annuitant (donor) age 60 or over, range from 5.7% -11.3%. Our financial obligations to our annuitants are backed by all of the assets of the organization, making a charitable gift annuity from Volunteers of America a safe and dependable investment option.

We Offer Three Types of Charitable Gift Annuities
A Single-life Gift Annuity provides fixed payments to only one person (you). The amount of the payment is based on your age at the time you enter into the annuity and cannot be changed once the annuity is signed. Payments begin immediately. The minimum purchase amount is $10,000; you must be at least 60 years of age.

A Two-life or Joint Gift Annuity allows you to name a second beneficiary (for instance a spouse or child) so that both of you receive fixed payments. When one beneficiary passes on, payments continue to the survivor. The amount of the payment is based on the ages of both annuitants. Again, the minimum purchase amount is $10,000 and you must be at least 60 years of age.   

A Deferred Payment Gift Annuity allows you to defer receipt of your payments to a later time of your choosing. This can be beneficial if you wish to receive a tax advantage now, but prefer to begin receiving payments during your retirement, when your income is likely to be lower. Many retirement accounts such as IRAs, Keoghs and 401(k) plans limit how much you are allowed to contribute, so for a younger person who wishes to put additional money aside for their retirement, the deferred payment gift annuity is a viable alternative. Deferring annuity payments yields higher payouts when payments begin and a significantly larger income tax deduction in the year the annuity is established.
A Volunteers of America deferred payment gift annuity is available as either a single-life or two-life annuity. The minimum purchase amount is $5,000; you must be at least 50 years of age.   

It Pays to be Charitable
A guaranteed fixed income for the rest of your life provides a sense of security. You can depend upon these payments throughout your lifetime, knowing the income is a fixed amount and will never change. Payments are established when the annuity is funded using the current rates as recommended by the American Council on Gift Annuities. The older you are at the time you establish the annuity, the larger your payments will be.
 
Lifelong income for a loved one as well as yourself. If you elect the Two-life or Joint Annuity, you will be assuring an income to someone you love and whom you want to care for, even after you’re gone.    

You are protected by the security of an established institution. Volunteers of America was founded more than 100 year ago, in 1896, in New York City. Our services have steadily grown and our reputation as excellent providers of social services continues to inspire confidence. We are fiscally well-managed, with more than 90 cents of every dollar going directly to client care; our overhead is one of the lowest among charities in the nation.

You are entitled to an immediate charitable deduction. If you itemize deductions on your tax return, you may deduct the original value of your charitable gift. Cash gifts are deductible up to 50% of your adjusted gross income and securities are deductible up to 30% of your adjusted gross income. If your income is insufficient to use the entire deduction in the first year, you may carry forward the unused portion for up to five additional tax years.

Part of Your Payments are Tax-free. In most cases, part of each annuity payment you receive is considered a tax-free return of principal, which increases each payment’s after-tax value. When you make a cash donation, the tax-free portion of the payments you receive will be even greater than if you funded the annuity with securities. A portion of the annual return is received as tax-excludable income for a number of years, based on the annuitant’s life expectancy.

You May Lower Your Capital Gains Tax by transferring securities directly to Volunteers of America in exchange for an annuity, you avoid paying capital gains tax on what is considered the charitable gift portion. The remaining capital gain is prorated over a number of years depending on your life expectancy.  You avoid paying capital gains tax on what is considered the charitable gift portion. The remaining capital gain is prorated over a number of years, again depending on your life expectancy.

How Much Income You Can Expect
The annuity rate depends upon your age at the time you make your gift; the older you are, the higher the rate of payment. If your birthday is less than six months from the date of the gift, the rate is calculated on your approaching age. Volunteers of America follows the payment rates recommended by the American Council on Gift Annuities.

The payment rate at the time you make an annuity, establishes the fixed annual payment you can count on for life.  It will never change.  Annuity payments are generally made on a quarterly basis.

While the rates for many fixed income investments such as certificates of deposit, treasury bills and money-market funds, have declined significantly from their high levels in years past, the cost of living continues to rise. If these trends affect you, and it is important to you to support the work of Volunteers of America, we invite you to consider a charitable gift annuity with our organization. The gift annuity rate will likely be higher than the rate of return you are now receiving on your current fixed-income investments.

Please call our development department at (212) 496-4312 for a personalized calculation of what your investment in Volunteers of America will provide in terms of quarterly payout and tax deductions.

To make a gift today online, please use our secure online donations page.

The information contained in this section is not intended as specific legal advice. Consult your own attorney, accountant, or other professional tax and estate planning advisors when considering any legal matter. State laws which govern wills and contracts vary and are subject to change.