Charitable Gift Annuity
If you are like many people, you have watched your investments fluctuate with the markets. There isn't much security in knowing that your financial future can be tossed around like the wind. You might be wondering if there is any way to create true security for you or a loved one, while also making a gift to UNM. The good news is that with a Charitable Gift Annuity, you can receive fixed income that never changes, with payments made to you or your loved ones for life, and you create a charitable legacy.
How a charitable gift annuity works
Lynn Richards, 75 years old has watched interest rates fluctuate for years. She has not been satisfied with her money market fund currently earning 1.5%. She has looked at ways she could get back to the 5-6% rate of return she is used to. However, she did not want to increase her market risk by investing in securities that would fluctuate in value.
Lynn is an alumna of the University of New Mexico and supports Zimmerman Library with an annual gift. Lynn expressed her disappointment with her money market fund to a Development Officer who suggested a Charitable Gift Annuity. The Development Officer explained that a Charitable Gift Annuity is a contract between Lynn and the UNM Foundation. The UNM Foundation will promise to pay Lynn a fixed rate of return for her life. In this case, Lynn was thinking of a $50,000 annuity. Based on the market conditions and other factors, such as her age, the rate suggested by the American Council on Gift Annuities (ACGA) is 5.8%. This means that the charity promises and guarantees to pay her $2,900 a year, regardless of changes in interest rates, for the rest of her life. Lynn will receive a charitable income tax deduction for the portion of the annuity that is a gift. Once Lynn passes away, UNM receives the remaining funds for the purpose at UNM that Lynn designates - in this case Zimmerman Library. *
Now is the time to lock in a rate based on your age. To find out your payment rate and learn about the specifics of establishing a Charitable Gift Annuity, please contact us.
*This is an example and is used for illustrative purposes only.
If you have any questions about charitable gift annuities, please contact us. We would be happy to assist you and answer your questions.