Charitable Gift Annuity
What is it? A lifetime annuity for one or two people issued by The Minneapolis Foundation in exchange for a contribution. The annuity rate varies positively with age. The annuity is backed by the full faith and credit of the Foundation.
When is it used? When a donor wishes to receive an annuity for life in exchange for a contribution to benefit the community.

When an individual has an appreciated, liquid asset yielding a low return, but is reluctant to sell the asset and reinvest because of capital gains tax exposure. Cash may also be used to create a charitable gift annuity.

The minimum gift required is $5,000 and annuitants must be age 55 or older when payments begin.
How does it work? Gift Annuities are the oldest form of life-income gift, dating to the 19th century. A simple one-page contract prepared by the Foundation promises to pay the donor a fixed annuity for life. The payments are backed by the full faith and credit of the Foundation.

The donor receives an income tax deduction when the annuity is issued that equals the present value of the assets remaining in the future.

A portion of the annuity may be tax-free to the donor; capital gains are also spread over the annuitant's life expectancy. The Foundation uses the remainder to establish a fund as instructed by the donor.

The Foundation also issues deferred Charitable Gift Annuities in which the annuity payments to the donor are delayed for a period of years. The donor receives a higher income tax deduction in exchange for the deferment, and the higher annuity rate offered reflects the donor's age when payments begin.

Sample Current Gift Annuity Rates*:

age annuity
established

age payments
begin

 payment rate
55
62
8.2%
55
65
9.7%
60
62
6.4%
60
65
7.6%
65
67
6.8%
65
70
8.2%

Sample Deferred Gift Annuity Rates*:

age annuity
established

one person

payment rate

age annuity established

two persons

payment rate
55
5.5%
55 & 57
5.0%
65
6.0%
65 & 67
5.7%
75
7.1%
77 & 77
6.5%
85
9.5%
85 & 87
8.1%
90+
11.3%
95 & 97
11.1%
*Rates effective 7/1/04; subject to change. Click here for actual, current rates.
  We're happy to help you find the charitable giving or estate planning option that works best for your situation. We can work directly with you or through your professional advisor. Call us today at (612) 672-3874 or e-mail us at development@mplsfoundation.org.