Charitable Gift Annuity Program

March 2, 2011

In your retirement, give yourself, and those who benefit from the work of Columban missionaries, a most precious gift!

The Charitable Gift Annuity Program of the Columban Fathers dates back to the mid-1920s. A Columban Charitable Gift Annuity is a means of making an irrevocable gift to the Missionary Society of St. Columban through the transfer of cash, certificates of deposit (CDs) or other assets, such as securities or real estate.

The annuity may be for one person or two people (a Joint and Survivorship Annuity). In a Joint and Survivorship Annuity, the payments will continue for the life of both parties. The other party may be a spouse or any other person.

In return, the Society makes a contractual agreement to pay you a FIXED ANNUAL INCOME FOR LIFE!

Advantages of a Charitable Gift Annuity

Here are the benefits you will see from a Columban Charitable Gift Annuity:

  • Life income: Attractive annual income for yourself and/or your spouse.
  • Tax savings on the gift: A generous portion of your gift is immediately deductible as a charitable gift.
  • Tax-free income: A portion of your annual return is tax-free.
  • Possible estate benefits: If, at the time of your death, there is a remaining value in your annuity, your estate may claim this value to reduce taxes.
  • Capital gains tax savings: If you fund the gift annuity with appreciated securities, you can lessen the tax bite on the gain.
  • Your reward will be great in Heaven: Your gift will help Columban missionaries bring Christ’s love to others. Upon the death of the annuitant, the remainder value of that annuity is released to further the missionary work of the Missionary Society of St. Columban.

Is my investment safe?

Your Columban Charitable Gift Annuity is placed in a managed fund separate from other Columban investments. Currently, the Society administers a Gift Annuity portfolio of more than $8 million.

The income from this fund, together with a portion of the principal, helps make the payments. Your annuity is also backed by other assets of the Society.

Gift Annuities are regulated by the U.S. government and must conform to laws enacted in a number of states. The Internal Revenue Code permits nonprofit organizations, such as the Columban Society, to draw up Gift Annuity Contracts that allow the donor an immediate Charitable Gift Deduction of a portion of the principal. Part of each annual payment is tax-free.

How is the payment determined?

The rate of payment is based on the age of the beneficiary. The older you are, the higher the percentage return.

How does a Columban Charitable Gift Annuity work?

Here is an example of a Single Life Annuity (Rates and Dollar Amounts effective January 1, 2012):

Mary Simpson, age 70, transfers $10,000 to the Columban Fathers for a Gift Annuity. At that age, there is a return rate of 5.1%, giving her $510 annually for life. Of that, $390 will be tax-free for the period of her life expectancy. In the year in which she makes the transfer, she may claim a Charitable Gift Deduction of $3,946 on her tax return.
Benefits of a Single-Life Gift Annuity for $10,000

Age Return Rate Annual Income Tax-Free Portion Taxable Portion Charitable Deduction
90 9.0% $900.00 $841.50 $58.50 $6,212.70
85 7.8% $780.00 $698.88 $81.12 $5,528.80
80 6.8% $680.00 $575.28 $104.72 $4,822.20
75 5.8% $580.00 $475.02 $104.98 $4,302.00
70 5.1% $510.00 $404.43 $105.57 $3,728.80

Here is an example of a Joint or Two Life Annuity:

Mr. Harris, age 72, wants to take out a Gift Annuity to provide life income for himself and his wife, who is 70. Using principal of $10,000, they will receive an annual income of $470 until the death of the surviving spouse. Approximately $357 of that will be tax-free for the period of their life expectancy. In the year they take out the annuity, they may claim a Charitable Gift Deduction of $3,108.

Other Columban Charitable Gift Annuity Options:

The Deferred Payment Gift Annuity. This is a Charitable Gift Annuity that gives guaranteed retirement income and a tax deduction now.

The advantage of a Deferred Payment Gift Annuity is that you are making a worthwhile gift to the Columban missions. You get a substantial gift deduction now and generate immediate tax savings. You choose the year you want the payments to start.

The annual return rate is generous, and part of that return will be tax-free for the period of your life expectancy.

As a result, you relieve yourself of investment worries. You will receive income when you need it most.

Here is an example of a Deferred Gift Annuity:

Debbie Smith, now age 65, wants to take out a Gift Annuity with a principal of $10,000 with payments to begin at age 70. She can take an immediate Charitable Gift Deduction of about $4,230 on this year’s taxes. Starting at age 70, she will receive an annual income of about $590, part of which is tax-free for the period of her life expectancy.

Appreciated Stock. Many people own securities that have appreciated in value. In times of market uncertainty, they would like to sell them but hesitate to do so, since they could incur a large capital gains tax. An ideal way to make these securities work in your favor is by using them to fund a Charitable Gift.

Here is an example of using Appreciated Stock as a Charitable Gift:

Mrs. Regan, age 75, takes out a Gift Annuity using securities that cost her $4,000.00 and are now valued at $10,000. She will receive annual payments of $600.00 for life and get an immediate Charitable Gift Deduction of $4,684. What had been a capital gain of $6,000 is reduced to $3,189.12.

The tax bite on that gain is then lessened by being divided over her life expectancy. In practice, it means that she will only pay capital gains tax on $279.72 annually.

Establish a Columban Charitable Gift Annuity through your will

You can provide for someone in your will by designating a portion of your estate to set up a Columban Charitable Gift Annuity. It would be established immediately and payments would continue through life to your loved one.

Plus, you will have the satisfaction of knowing you were helping the work of Columban missionaries worldwide.

Variable Factors. The tax benefits for each annuitant may vary because of the following:

  • Your date of birth
  • The birth date of any other person who will receive annuity payments
  • When you want the payments to begin
  • The frequency of the payments (annual, semiannual, quarterly)
  • If funded by securities, the benefits could vary based on, a) The cost basis of the securities; b) Their present fair market value and holding period.

How can I get a Columban Charitable Gift Annuity proposal?

To receive your personalized proposal, simply complete our Proposal Request Form.

Then, we will send you the necessary information about your payments and show you the tax benefits of funding a Columban Charitable Gift Annuity.

There is no obligation to enroll when we send you the information, and all information you give us will be kept confidential.

Please examine this chart of the current rates of return:

Single Life Gift Annuity Rates Table*

*Effective January 1, 2012

Age Rate
70 5.1
71 5.3
72 5.4
73 5.5
74 5.7
75 5.8
76 6.0
Age Rate
77 6.2
78 6.4
79 6.6
80 6.8
81 7.0
82 7.2
83 7.4
Age Rate
84 7.6
85 7.8
86 8.0
87 8.2
88 8.4
89 8.7
90+ 9.0

This information is not intended to be specific legal advice.
Please consult your attorney in all legal matters.
Laws regarding contracts may vary in different states.

If you have any questions about the Columban Charitable Gift Annuity Program, please feel free to call us or e-mail us . We are always here to help.

You can reach our Planned Giving Office by calling toll-free at 877/299-1920.

Or, write to us at:

Planned Giving Office
Missionary Society of St. Columban
P.O. Box 10
St. Columbans, NE 68056

Thank you for considering our missionary work in your personal financial planning!

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