Charitable annuities are an interesting gift option for older graduates who wish to make a gift, yet continue to receive income during their lifetime. There are two manners in which to set up a gift annuity:
Re-insured: many insurance or financial institutions offer annuities. Re-insured annuities are purchased through these institutions, with the charity (Bishop's University) receiving a minimum of 20 % of the initial capital at the outset (which may be used immediately), while you receive life-long income, much of which will be tax free.
Self-insured: Bishop's University has the ability to offer self-insured charitable gift annuities. With this option the “gift” portion of the annuity is only available to the University upon death.
As an example:
A female graduate, 75 years of age, donates $50,000 in November 2010 to establish an annuity at Bishop's.
| Annuity: | $50,000 | |
| Rate of Return: | 5.99 % | |
| Annuity Income: | $2,995 per year for life (of which 92 % is tax-free) | |
| Immediate charitable donation receipt: | $15,895.48 |
Dr. Roberta Cameron completed a second BA at Bishop's in 1978, and an MA in 1988. Since 2000 she has arranged an annuity annually with Bishop's University. When Roberta passes away, these annuities will establish the Roberta and Alex Cameron Trust Fund.
“I like the security of annual, tax-free income, and take pride and pleasure in knowing that, as a result of our charitable support, future students in the humanities will benefit from the same opportunities I enjoyed while studying at Bishop's.”
