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Charitable Gift Annuity

There is more reason than ever to create a charitable gift annuity with Jewish National Fund. JNF offers planned giving opportunities that give you a generous return, the benefit of tax savings, plus recognition in Israel. At the same time, JNF receives much-needed support to continue ensuring the prosperity of the land of Israel through their generosity and partnership with the people of Israel.

What is a Charitable Gift Annuity?

A charitable gift annuity is a simple contract between a donor and Jewish National Fund. In exchange for an irrevocable gift of cash or securities JNF agrees to pay one or two annuitants a fixed sum monthly, quarterly, semiannually or annually for life. JNF's general resources guarantee the payments. Charitable gift annuities may be created with a gift of $5,000 or more. Additional contributions create new annuity contracts rather than build on existing annuities.

How is the annuity rate determined?

The annuity rate depends on the age of the annuitant(s) at the time of the gift. The older the annuitant(s), the more income JNF can agree to pay. The rate in effect when you acquire the annuity never changes and is guaranteed for life.

Following are annuity rates JNF is currently offering:

Single-Life Gift Annuity
Age(s) Rate (%)
65 5.5
66 5.5
67 5.6
68 5.7
69 5.8
70 5.8
71 5.9
72 6.0
73 6.1
74 6.3
75 6.4
76 6.5
77 6.7
78 6.8
79 7.0
80 7.2
81 7.4
82 7.5
83 7.7
84 7.9
85 8.1
86 8.3
87 8.6
88 8.9
89 9.2
90 & Over 9.5

*Two life rates will vary. Rates as of April 1, 2012.

Am I entitled to an immediate charitable deduction?

Yes! You can claim an income tax deduction for the portion of the gift annuity that represents the charitable gift. The amount of the deduction is determined by an IRS formula and is claimed in the year the gift is made.

Your donation to a charitable gift annuity funded with cash is deductible up to 50% of your adjusted gross income (AGI). Gifts of long-term appreciated securities (held at least a year and a day) are deductible up to 30% of your AGI.

If your income is insufficient to use the entire deduction in one year, you can carry forward the unused portion for up to five years.

Are there any other benefits?

Yes! In some cases, part of each payment is tax-free, increasing each payment's after-tax value. The tax-free portion is greatest when the annuity is funded with cash. If you give appreciated property to fund a gift annuity, only that portion of the reportable gain attributable to the annuity interest is deemed taxable; the taxable portion of the gain is spread over the life expectancy of the donor and passed through the annuity payments.

Your Benefits Include:

  • Federal income tax charitable deduction.
  • Fixed annual income for life for up to two named annuitants, guaranteed by the general resources of JNF.
  • If you fund the annuity with an appreciated stock, bond or mutual fund, a portion of the income will be considered a capital gain distribution. If you are named an annuitant, this tax will be spread out over your life expectancy.
  • Your estate may enjoy reduced probate costs and estate taxes.
  • You will provide generous support to JNF to help continue our important work in land reclamation, afforestation, building dams and reservoirs, establishing parks and recreation areas.

Example:

Rose is 82 years old and has been investing primarily in fixed income investments to supplement her income. Rose has $50,000 and decides to put it into a JNF Charitable Gift Annuity.

Based on Rose’s age, JNF is able to create an annuity that will pay her 7.5% annually on her 50,000. As a result of making this gift, Rose is entitled to an income tax deduction of 24,002. She will receive a yearly annuity of $3,750. Furthermore, approximately 83.5% of each annuity payment is tax-free for the next 8.3 years. After her death, the proceeds from the charitable gift annuity will be used to plant a grove of trees in her memory in Israel.

The Deferred Payment Charitable Gift Annuity

Many retirement arrangements such as IRAs, Keoghs and 401(k) plans have contribution limits. An alternative, if you are younger and wish to supplement your retirement plan, is the deferred payment charitable gift annuity. This program enables you to give cash or securities now and receive annuity payments at a later specified time, such as at retirement. Deferring annuity payments yields higher payouts when payments begin and a significantly larger income tax deduction in the year the annuity is established.

Example:

Howard, age 65, has maximized his contributions to all of his retirement plans. He is an active supporter of JNF and is looking for creative ways to save for his planned retirement at age 70. By contributing $25,000 now to a deferred payment charitable gift annuity that will begin at age 70, Howard is entitled to an immediate income tax deduction of $5,779 – more than 23.11% of the total gift. Additionally, when he reaches age 70, JNF will pay him a lifetime annuity of $1,800 annually, which represents a 7.2% return on his initial $25,000 gift.

To speak to a JNF Planned Giving Specialist, please call (800) 562-7526. Or, go to JNF’s Benefits Calculator to run your own illustration.

 

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Earn up to 9.5% on your money.

Choose from one of the many planned giving options and consult with a JNF Planned Giving specialist by filling out an information request.

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