Celebrating 100 Years of Giving Through Charitable Gift Annuities
In 1910, Catholic Extension's founder, Father Francis Kelley, saw the potential of a relatively new financial tool for the Catholic Church, which today is still a bedrock of Catholic Extension's fundraising. He convinced the Board of Governors to approve the Catholic Extension Charitable Gift Annuity Program, a valuable resource that is one of the longest-running programs of its kind in the country.
The Charitable Gift Annuity is called the gift that gives back, but how does it work?
When you make an irrevocable gift in the form of a Charitable Gift Annuity, you receive fixed payments based on your age at the time the Gift Annuity is established, for the rest of your life. The rate is higher for older annuitants, up to 9.8 percent. You also receive an immediate one-time charitable deduction of 10 percent or more, and part of each payment is tax-free over your life expectancy.
How does a Catholic Extension Charitable Gift Annuity support mission dioceses across the country?
The gift portion of an annuity will be used to support the work of Catholic Extension. Many Catholics are not aware that 86 dioceses in the United States are mission dioceses and rely on outside support to sustain their many ministries. These dioceses are home to 11 million Catholics and represent 70 percent of the country's land mass. Your annuity's gift portion helps these dioceses through:
- Salary subsidies for priests, women religious and lay leaders
- Scholarships for seminarian education
- Grants for church buildings
- Funds for religious education and faith formation programs
- Emergency support
There has been an explosion recently of annuity programs in charitable organizations. Why do so many donors like Catholic Extension annuities?
Because arranging a Catholic Extension Charitable Gift Annuity is a unique way to achieve goals both for our donors and for our work in dioceses across the country.
When you take out a Charitable Gift Annuity, it's as easy as opening an account at your local bank. After you submit the necessary application form and check to Catholic Extension, we calculate your annuity payment (either annually, semi-annually, quarterly or monthly), explain what portion of your payment is taxable and what is tax-free, and determine the amount you can deduct as a charitable gift. At year's end, we provide you with the appropriate form for filing your taxes. You can estimate your annuity payments by using the annuity payment calculator here.
For your security, we prefer to electronically transfer your payments directly into your checking or savings account rather than sending a check, but the choice is yours. Catholic Extension also prides itself on providing personal service and customizing plans to meet our donors' specific needs. In some cases, a Charitable Gift Annuity may not be the right choice, and our knowledgeable, trained professionals will advise you about better ways to maximize the value of your savings for yourself, your family and the Church through an outright gift, a charitable trust or other giving options.
Are there restrictions for income tax charitable contribution deductions if I establish more than one Catholic Extension Charitable Gift Annuity in a year?
If cash is used to fund your Charitable Gift Annuity, you may deduct the gift portion of the annuity for up to 50 percent of your adjusted gross income. If appreciated securities are used, you may deduct the gift portion of the annuity for up to 30 percent of adjusted gross income. There is a five-year carryover for any excess.
How can Catholic Extension offer high annuity rates when bank interest rates are so low?
Our annuity rates are based on the standard rates published by the American Council of Gift Annuities. For younger annuitants who may want to take advantage of higher rates, we suggest Deferred Gift Annuities. This way, they can take out an annuity and receive an immediate tax deduction, but start payments at a later date at higher rates.
Can you structure Charitable Gift Annuities to benefit a loved one?
Yes, parents can set up Charitable Gift Annuities for their children, young adults for their parents, and aunts and uncles for their nieces and nephews. In addition, some parishes have set up deferred gift annuities for their staff to ensure guaranteed income when they reach retirement age.
If I decide I no longer need payments from my gift annuity, what can I do?
Gift annuity regulations allow annuitants to terminate their gift annuities at any time and release the gift remainder for immediate use by Catholic Extension. In most cases, early termination affords the donor an additional charitable deduction, as they will be making a present gift of the future payments they have opted to forego.
For more information regarding Catholic Extension Charitable Gift Annuities, please contact Judy Blackmer, Catholic Extension Charitable Gift Annuity Specialist, by email: jblackmer@catholicextension.org or call 1-800-842-7804.
This is not legal advice. Any prospective donor should seek the advice of a qualified estate and/or tax professional to determine the consequences of his or her gift.