n an era of uncertainty about many retirement income vehicles, at least one remains guaranteed - the income payment you can receive from a charitable gift annuity (CGA).

Hospice Foundation is pleased to be among just a handful of Monterey County nonprofits that is licensed through the State Department of Insurance to offer a Charitable Gift Annuity. CGAs are a great way to benefit you and/or a loved one today well into the future, and then ultimately used to fund end-of-life care and comfort services for Monterey and San Benito county residents and families.

A charitable gift annuity is part investment and part donation. It is particularly attractive to a person who wants to receive income from assets that have risen sharply in value, such as stocks.

Because gift annuities may be new to you, this portion of our website will explain what a gift annuity is, how it works, and how it benefits you. We'll try to answer most of the frequently asked questions about gift annuities. If your particular question isn't answered, please email Susan Cortese, CFRE, Hospice Foundation Director of Development or call him at (831) 333-9023, ext. 11.

What is a charitable gift annuity?
A charitable gift annuity is simply a contract between the donor(s) and Hospice Foundation.

How does a gift annuity work?
In exchange for your contribution (a gift of cash or property), and pursuant to a signed agreement, Hospice Foundation agrees to make fixed, guaranteed payments for life to one or two annuitants (usually, but not necessarily, the donors). The amount of the annual payments will depend on the amount transferred, the ages of the beneficiary(ies), and the annuity rate schedule in effect at the time of the gift. Once the annuity is established, the payments remain fixed, regardless of the changes in the economy. This makes the gift annuity especially attractive to older donors (60 and above) who like the security of fixed, guaranteed payments.

What can a charitable gift annuity provide?
It can provide you supplemental income payments for your lifetime (and the lifetime of your spouse or another designee); significant tax breaks at the time of the gift and for the remainder of your life expectancy; and support for end-of-life care and services funded by Hospice Foundation in the future.

Who may receive payments from the annuity?
Payments may be made to up to two beneficiaries (also called annuitants. While typically the donor(s) name themselves, an annuity can also be established to benefit others, such as a parent or sibling.

What determines the amount of the annuity payment?
The annuity payments will be determined at the time the annuity is entered into, and will be based on the age/s of the annuitant/s at that time. Hospice Foundation follows the guidelines and adheres to the annuity rates established by the American Council on Gift Annuities.

How does a gift annuity benefit end-of-life care and services?
At the end of the annuitant's life (or, with a two-life annuity, the end of both lives) 100 percent of the remainder of the principal you have transferred will be used by the Hospice Foundation to fund quality, compassionate end-of-life care programs and services in Monterey and San Benito counties.

Can a charitable gift annuity be set up for more than one person?
Yes. Gift annuities are frequently arranged to provide payments for two persons. Under such arrangements, payments are made to both annuitants for their joint lifetime. Upon the death of the first annuitant, the payments are continued for the lifetime of the survivor. You may name any person you want as an annuitant.

Are there tax advantages with a gift annuity?
Yes. You, the donor, receives a charitable deduction immediately. In addition, the annuity payments you receive from Hospice Foundation are partially tax-free, representing a return on the principal contributed. Note: When a donor lives beyond his or her actuarial life expectancy, the entire annuity payment will be taxed as ordinary income.

Can I contribute securities for a gift annuity?
Yes. In fact, contributing highly appreciated securities which you have held for more than 12 months offers additional tax savings. The donor pays no tax on the capital gain attributable to the charitable gift portion of the contribution. If the donor is an annuitant, the gain attributable to the annuity payments does not need to be recognized in the year of the gift but can be reported ratably over life expectancy.

Is it possible to make an immediate contribution for a charitable gift annuity but delay actual receipt of the annuity payments until later?
Yes. The deferred payment gift annuity plan is designed to appeal to the younger donor, under 60, who has a high current income, can benefit from a current tax deduction, and is interested in augmenting retirement income on a tax-favored basis. It involves the current transfer of cash or marketable securities in exchange for an annuity starting at a future date - usually at the donor's retirement.

The donor realizes an immediate income tax charitable deduction for the gift portion.

Can a deferred gift annuity supplement a qualified retirement plan or an IRA?
Deferred payment gift annuities are an excellent means of supplementing retirement income.

Gift Annuity Table
The table below shows the approximate payout rate of a gift annuity based on the age of the participant.

One Life. Approximate Payout Rate
(As recommended by the American Council on Gift Annuities)
Effective July 1, 2003

A Two Life - Joint and Survivor Rate - is available by contacting the Development Department office at (831) 333-9023, ext. 11 or by emailing Susan Cortese, Director of Development.

Gift annuities are a popular gift vehicle, allowing people the opportunity to simultaneously make a gift while, at the same time, provide for their future financial security. We would be pleased to answer any other questions you have, send you a personal financial illustration, or schedule a meeting with you. There is no charge and you are under no obligation. Please call us at 333-9023, ext 11 or email Susan Cortese.

(Please note. You should consult your attorney about the applicability of the principles described here to your own situation. We would be glad to assist you and your advisor in obtaining the exact deduction for a gift you may be considering.)

If you would like more information, please contact Susan Cortese at (831) 333-9023 or send an email to Susan Cortese.

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