You’ve heard the old adage: If it seems too good to be true, it probably is.

In a world with big promises and little follow-through, it is wise to think carefully about any offer that seems too wonderful. There are, however, a few exceptions to this adage—and a Charitable Gift Annuity (CGA) is one of those exceptions. Why? Because a CGA allows you to give to your favorite charity while receiving a fixed, stable stream of income.

How does this happen? Through these 3 important parts of a CGA:

1. The Gift
2. The Contract
3. The Payment Stream

The Gift

A Charitable Gift Annuity begins with the desire to make an impact in the world through generous giving. If you are passionate about making God’s Word available to everyone so they can experience its life-changing message, considering a CGA with American Bible Society might be a great way to accomplish that mission while gaining the security and confidence that you need to meet your financial goals. Because a CGA begins with a gift, there may be significant tax benefits through a charitable deduction. We have a team of gift planning experts who are glad to discuss these benefits with your professional advisors.

The Contract

A Charitable Gift Annuity is a contract in which a charity agrees to pay a fixed amount of money to one or two people for their lives in return for a gift of assets. Using guidance from the Internal Revenue Service (IRS) as well as the guidance from the American Council on Gift Annuities (ACGA), the organization calculates how much it can pay over the anticipated life of the donor while preserving some of the gift value for their mission. Unlike commercial annuity rates which often plan to use the entire principle for payments, ACGA—an independent, non-profit organization—employs experts to help calculate rates based on standard life expectancy that will leave 50% of the gift value to the organization.

The Payment Stream

The clear benefit of a CGA is payments for life. Payments from an annuity will be larger than what you could typically earn by investing in an interest-bearing account or CD. The payment is made up of two parts. One part of the payment is a return of the original principal spread over time and the second part of the payment is interest earned by the principal over the time period. The portion that is calculated as returned principal is a tax-free payment. The IRS provides values to determine how much of the payment falls within each category.

Ready to learn more?

There are many great ways that a Charitable Gift Annuity with American Bible Society can help you accomplish your ministry and financial goals. Call our team at 800-549-3328 or visit our team page to learn how you can maximize your giving.