Interest Rates and Fixed Incomes

Planned giving potential donorOne of the ways to market planned giving is through consistent, coherent communications that appear in your newsletter.  The idea is to stimulate an idea in someone’s mind so that they raise their hand and say, “I would like to know more about how I can save taxes, increase my income and alleviate my worries about financial management.”

Here is an example of one such “column” you might run in your newsletter.

Many individuals on fixed incomes have been hurt by lower interest rates. Certificates of deposit that once paid 7% or more are being rolled over at less than 2%.  For those on fixed incomes, this represents a real loss of earnings.  As an alternative, many individuals have looked to the stock market as a way to recoup their shortfall in income.  However, “blue chip stocks” pay only between 1% and 2% in dividends, if at all.

Not surprisingly, many of our friends and donors have turned to us to provide streams of income paying 6.2% to 10.2% or more, depending on the age of the donor and the gift option selected.  Our programs also enable the donor to obtain a charitable income tax deduction, which provides important tax savings.

For donors and friends who want to benefit our agency and obtain a guaranteed life income, one of our most popular planned giving vehicles is the Charitable Gift Annuity.  A CGA allows donors to make gifts to benefit our organization; receive a guaranteed income for life, and perhaps for a spouse’s lifetime; and obtain a charitable income tax deduction at the time the gift is made.  The CGA can be funded with appreciated securities thereby allowing the donor to avoid capital gains taxes.  This vehicle requires a minimum gift of $10,000.

Your CGA to our agency pays real dividends.  There are several options to choose from, depending on your age, your needs, and the way you fund your gift.  A life income gift provides the following benefits:

  • A guaranteed stream of income—a portion of which is tax free—for the lifetime of the donor and/or the donor’s spouse
  • A current charitable income tax deduction
  • An opportunity to establish an endowed fund in your name or the name of a loved one
  • Avoidance or reduction of capital gains taxes on gifts of appreciated property
  • Membership in The Heritage Society
  • A potential reduction in federal estate taxes

If you would like to have a whole series of these columns and a design as to how to implement a planned giving program for your organization, receive a personalized financial analysis that shows you how a life income gift can benefit both you and our agency, or simply to discuss other gift planning options, please email David A. Mersky.