Will a Gift-With-Income Plan Work for Me?

The answer to this question begins with two other questions:

Would I like to make a gift towards St. Lawrence's future?

Would I and/or a loved one like to receive income payments after I make that gift?

For Martha Fiddler Ferguson '49, the answer to both questions was “yes.” When Martha spoke with St. Lawrence recently about creating a gift-with-income plan, she had a specific philanthropic goal in mind, “Prior to my 55th reunion in 2004, I decided it was time to thank the university for my years of education. There are different gift-with-income plans to choose from, and I chose the charitable gift annuity. The rate of payment to me during my lifetime was dependent on my age at sign-up. Over the years everyone gives thanks for his many blessings, and this gift annuity was an opportunity for me to express thanks for four wonderful years at St. Lawrence.”

A gift annuity is a simple contract between the donor and St. Lawrence that provides income payments for life. The payment amount is fixed, and payments are guaranteed based on all the assets of the University. The income rates offered are based on the age(s) of who will receive the income payments. St. Lawrence follows the rate schedule set by the American Council on Gift Annuities, an organization that has advised on gift annuity policy and rates since 1927. Based on her age, Martha locked in a rate of 7.2%.

It was best for Martha to make a gift of cash to create her annuity. Because she made a gift of cash, two-thirds of each of her annual income payments will be tax-free for the next 12 years, after which all of her payments will be taxed as ordinary income. In her case, she also received an income tax charitable deduction of over 40% of her gift amount.

Even though her income payments are guaranteed, Martha was pleased to learn that all of our gift-with-income assets are invested with State Street Global Advisors. State Street was founded in 1792. The Charitable Asset Management group is a specialized unit serving charitable organizations and their donors since 1984. The group manages over $2.1 billion in planned gift assets for over 23,000 donors and beneficiaries. St. Lawrence has invested its gift-with-income assets with State Street for over 15 years.

And finally, Martha elected to have her income payments deposited directly to her bank account via electronic transfer. It's easy, fast, and she doesn't need to worry about taking checks to the bank. She is very happy with the entire process, “The Manley Society did all the work, all I had to do was write the check! The part I really like about this gift is that some future student will benefit. Think about it and join the Manley Society!”

Is a gift annuity right for you? Request our workbook, Will a Gift-With-Income Plan Work for Me?