Charitable Gift Annuity

A charitable gift annuity is part gift and part purchase of an annuity and results in an income tax deduction. With this option, a donor can transfer cash or an asset to the Frederik Meijer Gardens & Sculpture Foundation and, in return, the Foundation will agree to make regular fixed payments to the donor for life. The annuity is paid out of the Foundation’s unrestricted funds. The donor may also name a second beneficiary to receive payments at donor’s death.

Example

A potential Foundation donor age 80 wants to install a clematis arbor in memory of donor’s deceased daughter. Donor owns $76,000 in appreciated stock, with a basis of $7,000, but is hesitant to give it away because donor needs the income. The stock pays an annual dividend of $2,812 (3.7%). The donor establishes a charitable gift annuity with the Foundation, and receives an annual income for life and a tax deduction for a portion of the gift ($38,617) based upon donor’s age and IRS tables.

Charitable gift $76,000
Federal income tax savings ($38,617 x 25%*) - $9,654
Federal capital gains tax deferred** ($76,000 - 7,000) x 20% - $13,800
MI income tax deferred** ($76,000 - 7,000) x 4.35% - $3,001
Estimated net cost to the donor $49,545
Plus annual income for life to donor ($76,000 x 6.8%) $5,168

Benefit to the Foundation

The Foundation will sell the stock and use the money to pay the donor $5,168 per year for life. On the donor's death, athe Foundation will use the money remaining after paying the annuity to install and maintain the clematis arbor in memory of donor's daughter.

Charitable Gift Annuity Rates

The charitable gift annuity rates are approved by the American Council on Gift Annuities. They change periodically, and the most recent rates can be found at the ACGA website.

* Individual federal income tax rates vary.
** Capital gain taxes are deferred. Capital gains taxes are paid as income is distributed to the donor.

  • Join a Society

    The Bonsai Society is made up of individuals who have made gifts of $100,000 or and the Perennial Society is for those who have given $10,000 to $99,999.

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  • Federal Tax ID (EIN)

    Tax ID: 38 3118579

  • The alternatives described are meant to provide general guidance. They may be subject to technical rules that could affect their use by a donor. You need to consult with your own advisor or a FMG&SF representative to determine which technique is best for you.