Gift annuities: A way to maintain giving after retirement and secure an income
Catholic Foundation president explains how annuity helps donor, charitable organization both
By Denver Catholic Register

A charitable gift annuity of The Catholic Foundation can help retirees secure fixed payments for life and ensure a promising future for the Church in northern Colorado, organization leaders said.
Gerald J. “Bud” Laber, president of the foundation, said that a charitable gift annuity is a contractual agreement between a donor and a charitable organization in which the donor transfers assets in exchange for the organization’s promise to pay an annuity.

“By donating through a gift annuity,” he said, “No. 1, you contract for fixed payments for yourself or another individual and, No. 2, you make a gift to benefit a charitable organization of your choosing.”

Laber described the simple process.

“A donor makes a gift to the foundation benefitting a Catholic mission or ministry of their choice and the foundation agrees to pay fixed payments for life,” he said. “The donor receives a current income tax charitable deduction for their gift and the fixed payments are partly tax free.”

“As an example, someone age 75 could donate a maturing $10,000 certificate of deposit,” Laber said. “If they need continuing income we could offer a one-life charitable gift annuity that the foundation issues at the rate of 6.7 percent, or $670 per year.”

If the person in that example itemizes their deductions, they would earn an immediate federal income tax charitable deduction of $4,197. Additionally, $468 of the $670 payment would be considered a return of their contribution and would not be subject to tax for the projected life expectancy.

“When the term of the gift annuity expires, “ Laber said, “the remainder of the gift and its earnings is then used to financially support a specified charitable organization or becomes an unrestricted gift allowing the foundation to meet the needs of our Catholic schools, parishes, seminaries and humanitarian causes as those needs change over time.”

The Catholic Foundation offers a wide variety of charitable planned giving opportunities that aim to help the faithful both meet their current and future financial goals and provide support for Catholic causes and charitable organizations.

“We offer solutions tailored to each individual and family situation to meet current and future financial and charitable goals” said Laber. “One of our donors established annuities to supplement her retirement income and that of her two sisters.”

The foundation grants almost $5 million annually through the generosity of its donors to Catholic schools, parishes, the archdiocesan seminaries and humanitarian causes meeting the needs of the whole community.

“Charitable gift annuities are an excellent way to achieve your philanthropic goals while providing income for you or a loved one,” Laber said.