Charitable gift annuities

A charitable gift annuity is a contract between you and the University of Chicago. In exchange for your irrevocable gift of cash or securities, the University agrees to pay you a fixed income each year for your lifetime (or, in the case of a joint annuity, for your life and that of another annuitant, such as your spouse).

Immediate payment

You can transfer cash or securities to the University of Chicago now, in return for an annuity that pays a fixed income for life to you and/or your spouse. Annuitants must be age 55 or older. An annuity requires a gift of $10,000 or more, which is backed by the full faith and credit of the University. With this type of gift annuity, your payments begin immediately and will be made on a quarterly basis.

In addition, a gift annuity entitles you to take a charitable tax deduction. The amount of your charitable deduction depends on the ages of the annuitants, the annuity rate, and the value of the gift. Part of each annuity payment will be taxed as ordinary income, part may be taxed as capital gains if appreciated property is used, and part may be tax-free.

Deferred payment

You may wish to defer receiving income from your annuity for a specified term of years. Because payments are deferred, you and/or your spouse will receive annuity payments significantly higher than those associated with the immediate payment gift annuity. An effective retirement planning tool, the deferred payment charitable gift annuity still entitles you to an immediate charitable deduction at a time when your income tax bracket is likely to be higher than in retirement.

You may postpone receiving income until you retire, when your income tax bracket may be lower. The donor or the annuitant may determine the age at which income payments begin. Part of each annuity payment will be taxed as ordinary income, part may be taxed as capital gains, and part may be tax-free.

Disclaimer: The information above is intended to assist you in your tax, estate, and charitable planning. It is not legal advice and should not be relied upon as such. Learn more about the information on this website.