Q: Who might be interested in taking out a Catholic Gift Annuity?
Current or potential donors, who are committed to supporting future Catholics by creating a legacy gift to the Catholic organization of their choice and are interested in an additional source of stable income for life.
Q: What is the minimum amount and age to establish a Catholic Gift Annuity?
The minimum amount is $5,000 and the minimum age to start receiving payments is 55. A younger donor can establish a deferred annuity, with payments beginning after age 55 or some point in the future.
Q: How does a Catholic Gift Annuity differ from a commercial annuity?
A commercial annuity, typically sold by banks and life insurance companies, will provide the owner with fixed or variable income based on commercial rates of return. These plans establish their annuity payments based on the assumption that all of the assets in the plan will be used up by the end of the income beneficiaries’ lives. A charitable gift annuity is part annuity and part charitable contribution. The donor receives a partial income tax deduction based on the assumed value of the gift the organization will ultimately receive. A gift annuity establishes its payments on the assumption that there will be something left for the organization at the end of the contract. In most cases, payout rates for gift annuities are lower than payout rates of a commercial annuity because of the charitable component in the contracts.
Q: How are your rates determined?
Catholic Gift Annuity program follows the American Council on Gift Annuities (ACGA) rates. The ACGA was formed in 1927 as the Committee on Gift Annuities for the purpose of providing educational and other services to American charities regarding gift annuities. The Rates Committee develops its schedule of suggested maximum rates by targeting a residual gift to the charity equal to 50% of the funds transferred. The Committee uses a set of assumptions for annuitant mortality, expenses, and investment returns to identify for each age a suggested rate which will produce the targeted nominal residual gift.
The ACGA current rates have been in effect since July 2018.