​Charitable Gift Annuities

Rotunda at night

​Charitable Gift Annuities

Overview

Receive Guaranteed Income for Life

A charitable gift annuity is a simple contract between the donor and the University. The donor makes a gift to the school or program of their choice, and in return, the University makes fixed payments to the donor for life. At the end of the contract term, the remainder is used for the purpose(s) the donor designated.

  • A gift annuity is an irrevocable gift to the University of Virginia.
  • A gift annuity may be established with a minimum of $5,000 (cash, appreciated securities, or real estate).
  • The minimum age to fund an immediate gift annuity is 55.
  • The amount of the annuity payment depends on the age of the individual receiving the income or the combined age of two beneficiaries.
  • You may claim a charitable tax deduction in the year of the gift or up to five years after the gift is made. The deduction is the present value of the expected future gift.
  • If you fund your annuity with appreciated assets, capital gains will not be realized in the year of the sale.
  • Usually, a portion of the annuity income is tax-free.

​Charitable Gift Annuities

Gift Examples
How Does a Charitable Gift Annuity Work?
One-Life Gift Annuity

Mr. Taylor is 75 years old and wishes to support the University. He decides to fund a gift annuity with $30,000 in cash. The gift annuity rate for an individual his age is 6.2%, so Mr. Taylor will receive quarterly checks in the amount of $465 (or $1,860 annually) for the rest of his life in exchange for his $30,000 gift.

In addition to receiving regular fixed payments, Mr. Taylor will receive a portion of this income tax-free. Mr. Taylor will also receive an immediate income tax charitable deduction of $13,935.30. When Mr. Taylor dies, the remainder of the annuity (estimated at $40,248) will support the University school or program designated in the contract he executed with the University of Virginia Foundation.

See Mr. Taylor’s charitable annuity illustration

Two-Life Gift Annuity

Mr. Taylor wishes to include his wife, age 72, in his gift annuity plan. Because there will be two individuals receiving income, the gift annuity rate will be 5.3%. The Taylors’ quarterly payment will be $397.50 ($1,590 annually). A portion of this income payment will be tax-free. When one beneficiary dies, the other will continue to receive the annuity payments.

See Mr. and Mrs. Taylor’s charitable annuity illustration

Flexible Gift Annuity

Ms. Pearce is 55 years old. She recently received a $50,000 bonus from her employer. She is interested in establishing a gift annuity but doesn’t need the income until she retires. Ms. Pearce decides to fund a gift annuity now but defer income payments until she is 65 years old. She will be able to claim an immediate income tax deduction of $20,978 on her current year federal tax form. In ten years, she will begin receiving quarterly income payments of $925 ($3,700 annually) for the remainder of her life. Because she deferred the payments for a decade, Ms. Pearce’s gift annuity rate will be 7.4%.

See Ms. Pearce’s calculation

Use our Gift Calculator to see how a gift annuity or flexible gift annuity can work for you.

Don’t need income now? Try a flexible gift annuity.

  • Similar requirements and benefits as a charitable gift annuity.
  • There is no minimum age requirement for establishing a flexible gift annuity although you must be at least 55 years of age to receive income payments.
  • You select a future “start” date (one year or later) to begin receiving income payments.
  • You receive a larger immediate income tax deduction.
  • You receive a larger annuity payment due to the delay in the start date.

Please Note: Due to individual state restrictions, UVA is not able to offer gift annuities in all states, among them California, New York, and New Jersey. Please call the Office of Gift Planning at 434-924-7306 or 800-688-9882 to determine if this option is available in your state.

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The University of Virginia does not provide legal, tax, or financial advice. We strongly recommend that you consult professional advisors on all legal, tax, or financial matters, including gift planning considerations. To ensure compliance with certain IRS requirements, we disclose to you that this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties.