Executive Director's Update

Join the Legacy Circle

Our board member Charles Weinrich, Senior VP at the Wellington Group of Morgan Stanley Wealth Management in Naples has put together information on how you can support our organization through a charitable gift annuity.

Charles explains how supporting the Parkinson's Association of Southwest Florida with a charitable gift annuity provides tax benefits and a guaranteed income for life.

A gift annuity agreement is a lifelong contract, not a trust, between a single nonprofit organization and an individual or couple, who are referred to as annuitant(s). The terms of this agreement will lock in the rate, amount and timing of all payments the annuitant(s) receive. The fundraising or planned giving department of the nonprofit you are interested in supporting will be able to provide information about whether it offers charitable gift annuities and at what rate; the fundraising or planned giving departments are typically the point of contact.

Because a gift annuity agreement is a contract with a single charity, there is no way to establish a charitable gift annuity that can support multiple charities at the same time.

Charitable gift annuity donors (annuitants) receive payments for the rest of their lives. The size of your payment is determined by many factors, including your age(s) when you set up the charitable gift annuity. (For example, younger donors will typically receive more payments but they’ll be smaller.) The amount is fixed and will never fluctuate or adjust for inflation. But it’s also guaranteed, backed by the charity and underlying insurance company’s entire assets, not just your gift, and will continue for the lives of the donors no matter how well or poorly the investments of the annuity perform.

You may be eligible to claim a partial charitable tax deduction for the year in which you set up the charitable gift annuity. Why only a partial deduction? The IRS views one portion of your contribution as a gift, to be used immediately by the charity for its tax-deductible charitable purposes. The other portion is viewed as an investment for you, which ultimately generates your payments.

A second tax benefit may come by donating long-term appreciated stock or other property if the charity is able to accept these assets in place of cash. By donating non-cash assets directly, it is possible to reduce or eliminate the capital gains tax you’d ultimately pay if you sold them first and then donated the proceeds. This capital gains tax benefit is not exclusive to establishing a charitable gift annuity; it also applies when you gift long-term appreciated securities or personal property to any public charity that’s equipped to accept them, including The Parkinson'a Foundation of Southwest Florida.

However, there is a potential tax drawback of a charitable gift annuity: part of your annuity income is taxable at the federal level, and possibly at the state level as well, depending on whether the state you live in has an income tax. The rules can be complex, so consider discussing the specifics of your situation with a tax advisor.

Charitable gift annuity rates vary from charity to charity and are based on several factors, including the amount of the gift, as well as the donor’s age(s) at the time of the gift. Younger donors may often see significantly lower rates based on the longer expected term.

For illustrative purposes, a 60-year-old who donates $100,000 may receive a rate of 4.4% (paying $4400 annually) while an 85-year-old will see a rate of 5.5% (paying $5500 annually) for the same gift. Some charities offer higher rates for donors who agree to wait a number of years before starting to receive payments.

Compared to a traditional, non-charitable annuity, though, rates of return may be lower because the primary purpose of a charitable gift annuity is to benefit the charity. This is a consideration for anyone thinking about how to best balance their charitable goals with their financial plans.

·     You want to maintain or increase your income.

·     You want the security of fixed, dependable payments for life.

·     You want to save income taxes or capital gains taxes.

·     You would like income that may be partially tax-free.

·     You are considering a gift amount of $50,000 or more.

·     You are at least 65 years of age.

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The Urso Crisis Fund at the Association provides financial assistance to qualifying families/individuals impacted by PD. Families/individuals my apply for up to $500 a year to help cover the expense of medication, physician visits, medical equipment and home health care.

They provide a single point of access to more than 475 public and private patient assistance programs, including 180 programs offered by pharmaceutical companies. Call 1-888-477-2669