Charitable Gift Annuity
A charitable gift annuity is one of the nation's oldest and most popular gift arrangements. The donor makes a gift to Amherst College, receives an income tax deduction in the year of the gift, and the College provides fixed quarterly payments to the donor and/or another annuitant for life. The minimum gift is $10,000. In an economy with low interest rates, a gift annuity may be an excellent way increase income on assets that are earning little interest.
The payment amount stays the same for life, and is based on the age(s) of the annuitant(s) when the gift is made. The older the annuitant, the greater the amount of income. A single annuitant, age 65, will receive an annuity rate of 4.7% of the gift amount. An 80-year-old annuitant will receive a 6.8% annuity rate. Annuitants must be 60 years of age or older.
With a gift of cash, a large portion of each payment will be tax-free income. With a gift of appreciated securities, if the donor is also the annuitant, the capital gain is spread out over the donor’s life expectancy in the payments, and taxed at the capital gains tax rate.
Contributions can be in the form of cash, appreciated securities or mutual fund shares, or other property acceptable to the College. All gifts of appreciated property should be held long term by the donor (at least a year and a day).
Individuals who may not need immediate income may consider a deferred payment gift annuity, which defers the start of the payments to some future point in time, most commonly retirement. This increases the payout rate while still affording the donor a charitable deduction in the year of the gift.
To see gift annuity rates and deductions based on information you enter, please use our gift illustrator.
For more information about making a planned gift to Amherst, please contact the gift planning staff.
Information contained in this website should not be considered legal, accounting, or other professional advice. Individuals considering a planned gift to Amherst should consult with their financial advisor.