You may know the benefits of a Charitable Gift Annuity: you make a charitable gift to the your congregation Foundation and in return receive a charitable deduction and a guaranteed, fixed payment for life. But you may not want or need additional current income at this time. A Deferred Payment Charitable Gift Annuity allows those in their peak income years to make a gift now (and obtain a charitable income tax deduction in the year of the gift) while deferring guaranteed annual lifetime payments to a future date. Through this one gift for ministry, you can receive current and future benefits.

Advantages of a Deferred Payment Charitable Gift Annuity
• You provide a gift for the your congregation
• Because your payments are deferred, your immediate charitable income tax deduction (if you itemize deductions) will be larger than through a typical Charitable Gift Annuity. The longer the payments are deferred, the larger the charitable deduction.
• Your payout rate will be higher once payments begin.
• You receive guaranteed annual lifetime payments, starting when you choose. Generally, you will benefit from being in a lower income tax bracket when you begin to receive your annual payments.
• Your gift has increased your overall retirement package. In addition, you can add to that package every year with a new Deferred Payment Charitable Gift Annuity.

Giving through a Deferred Payment Charitable Gift Annuity - Your Deferred Payment Charitable Gift Annuity can be made with gifts of cash, long-term appreciated stocks, bonds, mutual funds or incentive cash bonuses. When funding such a gift with long-term appreciated assets, part of the capital gains tax is bypassed; the rest is prorated over your life expectancy.
Using Deferred Payment Charitable Gift Annuities as Part of Retirement Planning
- Unlike most qualified retirement plans and IRAs that have contribution limits, the Deferred Payment Charitable Gift Annuity allows you to contribute an unlimited amount as often as you like. The minimum gift is $1,000 ($2,500 in California).
Each gift creates a new annuity. You may like the idea of a current charitable deduction while supplementing your retirement income but you cannot make one large gift in a year. One option is to make gifts of a smaller amount for several years, funding multiple Deferred Payment Charitable Gift Annuities that will all begin payments in the same year.

How does a deferred payment charitable gift annuity work?
Sam and Jane are 55 and 53, respectively. They are at the peak of their careers. Although they want to make a significant gift to their favorite ministry, they don’t need additional income now, but may when they retire. Sam and Jane decide to gift their appreciated stock, which has a current value of $9,500 with a cost basis of $4,000 for a Deferred Payment Charitable Gift Annuity. Their 10-year deferral will provide an immediate charitable tax deduction of $2,236, based on government rates for July 2002. When they begin receiving their quarterly payments in 2012, their annuity rate will be 10.9% or $1,036 annually. They will receive that payment for their successive lives.