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By Mark P. Cussen, CFP, CMFC
How to Create a Gift Annuity
Contact the charity of your choice about the asset management services and rates it can offer for your charitable gift annuity.
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By Mark P. Cussen, CFP, CMFC
OverviewCreating a gift annuity is not a difficult process, while it can provide for years of satisfaction as you see your money going to fund a charity that you believe in. An annuity is the gift that keeps on giving, and giving and giving. The charity usually does all the investment management.Step 1List your charitable goals and aspirations on paper and begin researching charities to see which ones best fit your philanthropic ideals. Most charities have websites that outline their philosophies and methods. You may also need to do a verbal interview with an officer of the charity to get inside information.Step 2Ask each charity that you consider about the level of asset management services it offers. Most larger charities will be able to provide what you need, but not all. There may be an annuity calculator already on the charity’s website. This can give you some idea of what kind of payment you can expect.Step 3Consult your financial or tax adviser to verify that your current financial status matches the methods and needs of the charity of your choice. If you are unsure of what rates to realistically expect in the current market environment, visit the American Council on Gift Annuities website for a list of rates. The charity should pay rates at or close to those listed on this site.Step 4Establish an agreement with the charity you choose and negotiate the rate of interest that they will pay you on your gift. Get a contract in writing promising the amount that it quotes for your records and protection.Step 5Make certain that you properly arrange for a monthly receipt of the money, whether it be by mail or direct deposit. Be sure to take the proper tax deduction.skill3ingredientCash or assets to gift to charityingredientsCash or assets to gift to charitytipIf you gift a tangible asset, use its appraised or fair market value as a basis for your tax deduction.tipsIf you gift a tangible asset, use its appraised or fair market value as a basis for your tax deduction.keywordgift, charity, annuity, investment, interest rateskeywordsgiftkeywordscharitykeywordsannuitykeywordsinvestmentkeywordsinterestkeywordsratesResourcesreferenceAmerican Council on Gift AnnuitiesreferenceIRS Website
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