Charitable Gift Annuities: Wise Investments that Leave a Legacy

?It?s just the right thing to do.?

IT?S IN THIS SIMPLE WAY that retired Infantry Capt. Martin ?Mac? McDonald explains why he set up a Charitable Gift Annuity (CGA) with Children?s Hospital of Orange County (CHOC). Mac decided to donate to CHOC while being treated for cancer at St. Joseph?s Hospital. He saw some young patients from CHOC receiving treatment at one of the shared service centers, and he knew they needed help.

A CGA is a way for individuals to make a charitable gift and still receive income for themselves or others during their lifetime. In Mac?s case, he has more than 20 charitable gift annuities. Setting up a CGA with CHOC allowed him to take advantage of income tax benefits, receive a steady income stream, and do something positive for CHOC and the children of Orange County.

A CGA is a simple contract between you and CHOC. In exchange for your irrevocable gift of cash, securities or other assets, the Foundation agrees to pay one or two annuitants you name a fixed sum each year for life. Gift annuity payments are based on rates recommended by the American Council on Gift Annuities. The payments are guaranteed by the general resources of the Foundation and backed up by a reserve account. The minimum initial gift is $10,000.

BENEFITS TO THE DONOR
CGAs provide lifetime income for donors, plus:

• Fixed income for life
• Rates of return up to 10 percent for single life (slightly less for two lives)
• A charitable income tax deduction for a portion of your gift
• Tax-advantaged income (your payments will be partially tax-free under most circumstances)
• Reduced capital gains tax (you pay capital gains tax only on the gain attributed to your retained income interest)
• The potential reduction of estate tax liability
• The satisfaction of making a substantial gift to CHOC during your lifetime

Mac discovered that setting up a CGA with CHOC allowed him to receive a steady income stream for life and the hospital to benefit from his generosity. To learn more about charitable gift annuities or other gift planning vehicles, please call Jeri Stathis, Manager, Trust and Estate Gifts, at 714.532.8690 or e-mail jstathis@choc.org. She will be happy to provide you with a no-obligation, confidential illustration of the benefits of a CGA.