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Planned Giving for Financial Advisors

Charitable Gift Annuity — Deferred

Deferred Gift Annuity Gift Diagram

How they work

  • Your client transfers cash or securities to Harper College Educational Foundation in exchange for a deferred gift annuity. Our minimum funding value is $10,000.
  • Beginning on a specified date in the future, Harper College Educational Foundation pays your client, your client and her spouse, or up to two other beneficiaries your client names, fixed annuity payments for life. Your client can also retain the right to “commute” those payments into a shorter period of time.
  • Beneficiaries must be at least 65 years of age when annuity payments begin. Each beneficiary must be at least 40 years old when the contract is created.
  • At the end of the contract term, the remaining contract balance (residuum) will be applied by Harper College Educational Foundation to the purpose your client stipulated when she signed the annuity contract.

Benefits to your client

  • Your client will receive an immediate income tax deduction for the charitable portion of her gift. Deferral of payments yields a higher annuity rate and generates a larger charitable deduction.
  • Your client can target annuity payments to begin when they are needed, such as when retirement begins or when a child's tuition payments will be due.
  • Your client or her named beneficiary/ies will receive dependable, fixed income for life.
  • The annuity payments will be treated as part ordinary income, part capital gains income and/or part tax-free income, depending on the assets used to fund the contract.
  • Payments are typically much higher than the return on low-earning savings accounts and CDs or low-dividend stock.
  • Your client can target annuity payments to begin when they are needed, such as when retirement begins or when a child's tuition payments will be due, and she can retain the right to elect to “commute” all of the annuity payments into a defined period of time, typically four or five years.
  • Your client will have created a meaningful gift for Harper College Educational Foundation while providing income for herself or her named beneficiary/ies.

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