You can transfer money to a charitable gift annuity and receive income for life.
Interest rates on charitable gift annuities are usually attractive compared to certificates of deposit (CDs) and other bank rates. The payouts are fixed and guaranteed so that they will not fluctuate in unstable economic times. Plus you can receive a charitable deduction from your income tax.
What is a charitable gift annuity? San Francisco Opera charitable gift annuities are contractual agreements between you and the Company’s trustee or administrator for these annuities.
How does a charitable gift annuity work? It’s simple! You make an irrevocable contribution of cash or appreciated securities to San Francisco Opera’s trustee, and you receive fixed annual payments for the rest of your life at an appealing rate. The payments are based on the age of the annuitant(s) and carry certain tax advantages. The older the annuitants are at the time of the gift, the greater amount of money they will receive. When the payments cease, most or all of the remaining funds in the annuity are distributed to San Francisco Opera.
Do I receive an income tax deduction? Yes, when you establish the annuity you are entitled to a charitable deduction for the estimated portion that will remain for San Francisco Opera. The older the annuitant(s), the larger the deduction.
Are there other tax benefits? A portion of your income payment is tax exempt, while the rest of the payment is taxable for your life expectancy. If you use an appreciated asset to create the annuity, a portion of the income payment is subject to capital gains taxes, while another portion returns basis to the annuitant, tax-free.
Do my income payments start immediately? Charitable gift annuities are flexible and offer a variety of options. Current charitable gift annuities begin the payments immediately. Deferred charitable gift annuities offer the option to defer your first payment for a number of years, and plan the payments to begin when you will need them. These payments will have increased rates since the contributed funds have been growing over time, and have not been diminished by payouts. They can be an excellent way to supplement future income such as retirement, or provide income for education needs while also helping San Francisco Opera in the future.
How can I create a charitable gift annuity?
- Contact San Francisco Opera’s legacy giving staff. We will provide you with information on how a charitable gift annuity would work for your age and specific situation.
- A charitable gift annuity contract is prepared for your signature and you transfer the assets to the trustee. The gift is complete.
How do CRTs work? CRTs are highly flexible and can be customized to meet your specific financial, tax, and estate planning needs.
- A variable income trust, known as a Charitable Remainder Unitrust, pays out a percentage of the assets, resulting in income payments that rise or fall depending on the annual value of the trust assets.
- A fixed income trust, known as a Charitable Remainder Annuity Trust, generates income that is determined at the beginning and never varies.
- If you do not need additional income now, but want to have more in your later years — and want the income tax deduction now and tax-free growth while you wait — you may wish to create a Deferred Charitable Remainder Trust, a trust variation that accrues income until a future date.
What can I contribute to a CRT? You may give cash, securities, or other property, such as real estate. Contributions of appreciated securities (stocks, bonds, mutual funds) are particularly attractive because they may enable you to benefit from capital gains tax savings. It is often possible to increase your income when low-yielding assets are contributed, then reinvested for higher return.
What are the benefits of a CRT?
- Highly flexible and can be customized to your needs and goals.
- Generates income while making an important future gift to San Francisco Opera.
- May increase income from the assets you donate.
- Qualifies for an immediate income tax deduction.
- Allows you to diversify your portfolio and avoid any capital gains tax on the assets used to fund the trust.
- Receives professional asset management.
- Reduces possible estate taxation.
What else should I know about CRTs?
- You may choose a fixed dollar or fixed percentage income payout, no less than 5 percent, and generally no more than 6-7 percent, depending on age.
- Payments are immediate unless you choose to defer them.
- You have the option of benefiting multiple beneficiaries.
- CRTs can be a good way to supplement retirement funds, plan for future retirement, or provide support for a parent, child, or others who depend on you.
How can I create a CRT?
- Contact San Francisco Opera’s legacy giving staff to review your goals and assets to fund a CRT. We will provide you with illustrations of how a CRT operates.
- Along with your legal and/or financial advisor, meet with us to review your trust plans, discuss alternatives, and refine your charitable purpose.
- Gift terms are finalized and documents prepared. You should review any agreement with an advisor.
- You and the trustee sign the agreement, and you transfer the assets to the trustee. The gift is complete.
A pooled income fund is made up of gifts that are pooled and invested together. Income is distributed to those you choose, will vary based on the performance of the fund and is taxable to the beneficiary. Upon the beneficiary’s death, San Francisco Opera will add the principal to its endowment.
With this kind of gift, you can create a lifetime source of income for yourself or someone else, claim a current income tax deduction, and provide joy for future generations.
Can the beneficiary be someone other than myself? Yes. You may name a spouse, a child, a parent, an older relative, or anyone else as your beneficiary.
What can I contribute to a pooled income fund? You may give cash or securities (stocks, bonds, or mutual funds). Contributions of appreciated securities are particularly attractive because you may benefit from capital gains tax savings.
What are the benefits of giving to a pooled income fund?
- Create a source of lifetime income for yourself or a beneficiary.
- Possibly increase earnings from your assets.
- Receive an immediate charitable income tax deduction.
- Diversify your portfolio and avoid any capital gains tax on the assets used to fund the trust.
- Obtain professional asset management.
- Reduce estate taxation, when applicable.
- Make an important future gift to San Francisco Opera.
What else should I know about pooled income funds?
- Pooled income fund gifts are established with assets of $10,000 or more.
- Payments are immediate and continue for life.
- Income from the fund can be a good way to supplement retirement funds or provide support for a parent, child, or others who depend on you.
- Income to the beneficiary is taxable.
How do I make a pooled income fund gift?
- Contact San Francisco Opera’s planned giving staff to review your goals and potential gift assets. We will provide information detailing the benefits of a pooled income fund gift for your review.
- Along with your legal and/or financial advisor, meet with San Francisco Opera staff to review your pooled income gift plans, discuss alternatives, and refine your charitable purpose.
- Trust agreements will be prepared by San Francisco Opera. You should review any agreement with an advisor.
- You and San Francisco Opera sign the agreement, and you transfer the assets to the trustee. The gift is then complete.
To learn more about supporting San Francisco Opera with a charitable gift annuity, please contact Kyle J. Polite at 415.551.6226 or firstname.lastname@example.org.