Many donors have found a charitable gift annuity to be a great way to support the University of Minnesota or M Health Fairview cause of their choice. With this type of gift, donors can receive fixed annual payments for life and an immediate income tax deduction.

The charitable gift annuity rates suggested by the American Council on Gift Annuities have increased. The University of Minnesota Foundation will offer these higher rates for new gift annuities created on or after July 1, 2022.

HOW CHARITABLE GIFT ANNUITIES WORK

You make a gift of cash or publicly traded securities to the U of M Foundation. The foundation then pays you (or up to two people you designate) a fixed amount annually for life. The remaining assets are used to support the campus, college, or program of your choosing.

Important things to know about charitable gift annuities:

• You choose the area of the University your gift will support.
• The minimum amount to fund a gift annuity is $10,000, and income beneficiaries must be 55 years of age or older when payments begin.
• Payments can be made to you, or up to two people you designate.
• Payout rates are based on age; typically, the older the income beneficiaries are when the gift is made, the higher the payout rate.
• In most instances, a portion of each annuity payment is tax free.
• You can claim an immediate income tax deduction for a portion of the gift, subject to applicable limitations.
• You can save on capital gains tax if you use appreciated securities to fund the gift annuity.

DEFERRED GIFT ANNUITIES: START PAYMENTS WHEN YOU'RE READY

If you want an immediate tax deduction but don’t need income now, you may prefer a deferred payment gift annuity. With this option, you make your gift now and select a date in the future for payments to begin. Because payments are deferred, the payout rate will typically be higher than for an immediate payment gift annuity. Donors often choose this option as a way to supplement future retirement income.

Not sure when you will need the income? You may also choose from a range of possible start dates and then determine on an annual basis whether to start payments that year or defer them for another year. The longer payments are deferred, the higher the payout rate. With this option, you have the flexibility to determine the timing of payments that best fits your tax situation or retirement plan.

Sample gift annuity rates*—payments deferred

For a 55-year-old making a gift:

*American Council on Gift Annuities suggested maximum rates effective July 1, 2022. Rates are for a single-life annuity; two-life annuity rates will be lower.

For more information or to receive a personalized gift annuity illustration, contact the University of Minnesota Foundation planned giving team or call 612-624-3333.