Hadassah

Examples of Charitable Gift Annuities

One Life Annuity for Yourself Using Cash

Miriam, 70, would like to support Hadassah and generate a secure stream of payments for herself. She establishes a charitable gift annuity with a donation of $10,000 in cash to Hadassah. Based on her age, she receives an annuity payout rate of 5.8 percent. Hadassah will pay her $580 each year for the remainder of her life, of which $422 will be tax-free to her throughout her life expectancy. She may also receive a charitable income tax deduction of $3,289 in the year she makes the gift if she itemizes on her federal income tax return.

Amount given to Hadassah $10,000 in cash
Immediate charitable income tax deduction $3,289
Annual payout for life $580
Tax–free portion (throughout Miriam's life expectancy of 15.9 years) $422
Taxed as ordinary income (throughout Miriam's life expectancy) $158

Miriam will continue to receive her annuity of $580 if she lives beyond her life expectancy, and the entire amount will then be treated as ordinary income. After Miriam's lifetime, the remaining amount will be used to support Hadassah.

Another Option Using Cash

Miriam, 70, currently owns $10,000 in stock that is producing low dividends. She purchased the stock several years ago for $6,000 and is looking for ways to increase her current income, minimize her capital gains tax, and help Hadassah. She decides to establish a $10,000 charitable gift annuity by donating her appreciated stock to Hadassah.

Amount given to Hadassah $10,000 in stock
Cost Basis $6,000
Immediate charitable income tax deduction $3,289
Annual payout for life $580
Tax-free portion (for her life expectancy of 15.9 years) $253
Taxed as capital gain income (for her life expectancy of 15.9 years) $169
Taxed as ordinary income $158

Miriam will continue to receive her annuity of $580 if she lives beyond her life expectancy, and the entire amount will then be treated as ordinary income. A great advantage of funding a charitable gift annuity with a donation of long-term appreciated stock is that the capital gains tax is eliminated on a portion of the gift. If Miriam had sold the securities, she would have immediately realized $4,000 in reportable capital gains. By donating the securities to Hadassah to establish an annuity, she has a total capital gain of only $2,684, reportable over her life expectancy of 15.9 years.

One-Life Annuity for a Loved One

Susan would like to provide her mother Esther, 80, with additional income, but knows that her mother does not wish to accept money from her. Instead, Susan gives $100,000 in cash to Hadassah to establish a gift annuity for her mother. Susan is eligible for an immediate income tax charitable deduction of $47,276 if she itemizes. Her mother will receive annual payments of $7,200 for the rest of her life. Of that amount, $5,609 will be tax-free to her until she reaches her life expectancy (9.4 years). If Esther lives beyond her life expectancy, she will continue to receive her annuity of $7,200, and the entire amount will then be treated as ordinary income.

One-Life Deferred Annuity for a Loved One

Vivian would like to supplement her daughter Carol's retirement income. Carol is 60 years old and plans to retire in 2023. Vivian contributes $50,000 in cash to Hadassah to establish a deferred gift annuity for her daughter, with payments to start on Dec. 31, 2023. Vivian is eligible for an immediate income tax charitable deduction of $14,929 if she itemizes. On Dec. 31, 2023, Carol will start receiving quarterly payments totaling $4,500 each year for the rest of her life. Of that amount, $2,205 is tax-free to her until she reaches her life expectancy (15.9 years). If Carol lives beyond her life expectancy, she will continue to receive her annuity of $4,500, and the entire amount will then be treated as ordinary income.

Two-Life Annuity for Spouses

Gloria, 77, and her husband Melvin, 79, wish to establish an annuity that will continue at the same level for both of their lifetimes. They donate $50,000 in cash to Hadassah to establish a two-life charitable gift annuity. Based on their ages, they will receive a payout rate of 6 percent ($3,000 each year for life) and are also eligible for a charitable deduction of $17,638 if they itemize. Of the $3,000, $2,280 will be tax-free for their joint life expectancy of 14.2 years. The annuity will continue after the first spouse passes away. After the second spouse passes away, the remaining amount will be used to support Hadassah's mission.

Two-Life Deferred Annuity for Spouses

Herman, 70, and his wife Barbara, 65, decide to contribute $250,000 in cash for a deferred gift annuity that will begin making payments when Barbara retires on Dec. 31, 2018. Their gift generates a charitable deduction of $55,807 in the year they establish the annuity, and they will receive a payout rate of 6.8 percent ($17,000 each year in quarterly payments beginning Dec. 31, 2018). Of the $17,000, $10,387 will be tax-free for their joint life expectancy of 18.7 years. The $17,000 annuity will continue after the first spouse passes away. After the second spouse passes away, the remaining amount will support Hadassah's mission.

All examples are for illustrative purposed only and are intended to represent only some examples of how your support can make a difference.

All examples are based on payout rates current as of July 2015. Examples assume a 2.4 percent charitable midterm federal rate and payment of the annuity in quarterly installments. Your actual tax benefits may vary depending on the timing of your gift and your specific financial circumstances. Federal income tax deductions for gifts of cash are limited to 50 percent of your adjusted gross income; for gifts of securities, the cap is 30 percent. You may, if necessary, take unused deductions of this kind over the next five years, subject to the same percentage limitations. For charitable gift annuities and deferred gift annuities established by the donor to benefit non-spouses (e.g. the donor's parent or child), the donor should confer with his or her financial advisor regarding potential gift tax issues. This information is provided for educational purposes only and we encourage you to consult with your own tax or financial advisor.

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A comprehensive guide to all of Hadassah's Planned Giving options


How to include a gift to Hadassah in your will or estate plan


How make a gift for Hadassah through a Charitable Gift Annuity


Deferred Charitable Gift Annuities


Using retirement assets to make a gift to Hadassah


Using life insurance to make a gift to Hadassah


Favorite ways to make a gift to Hadassah


Favorite ways to make a gift to Hadassah

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A charitable bequest is one or two sentences in your will or living trust that leave to Hadassah a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I, [name], of [city, state, ZIP], give, devise and bequeath to Hadassah [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Hadassah or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate, or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Hadassah as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Hadassah as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Hadassah where you agree to make a gift to Hadassah and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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