Ways to Give

  • Annuities

    06 April 2011

    Now there is a way to achieve your financial goals while helping the New Israel Fund (NIF) work to strengthen Israel's democracy and to promote freedom, justice and equality for all Israel's citizens.

    Creating a charitable gift annuity is a way to contribute to NIF, receive a generous, guaranteed income, and benefit from tax savings.  At the same time, NIF receives much-needed support to continue our important work.

    What is a Charitable Gift Annuity?
    A charitable gift annuity is a simple contract between a donor (you) and the New Israel Fund.  In exchange for an irrevocable gift of cash or securities, NIF agrees to pay one or two annuitants a fixed sum monthly, quarterly, semiannually or annually for life.  NIF's general resources guarantee the payments.  Charitable gift annuities may be created with a gift of $10,000 or more.  Additional contributions create new annuity contracts rather than build on existing annuities.

    How is the annuity rate determined?
    The annuity rate depends on the age of the annuitant(s) at the time of the gift.  The older the annuitant(s), the more income NIF can agree to pay.  The rate in effect when you acquire the annuity never changes and is guaranteed for life.

    Following are annuity rates NIF is currently offering:

    Illustrations based on a 5.4% AFR
    The illustrations presented here are based on financial assumptions as of August 6, 2007.  Actual results will vary depending upon the date of the gift.  For a personal illustration, contact Steve Rothman at 415-543-5055 or via email at .

    Am I entitled to an immediate charitable deduction?
    Yes! You can claim an income tax deduction for the portion of the gift annuity that represents the charitable gift.  The amount of the deduction is determined by an IRS formula and is claimed the year the gift is made.

    Your donation to a charitable gift annuity funded with cash is deductible up to 50% of your adjusted gross income (AGI).  Gifts of long-term appreciated securities (held at least a year and a day) are deductible up to 30% of your AGI.

    If your income is insufficient to use the entire deduction in one year, you can carry forward the unused portion for up to five years.

    Are there any other benefits?
    Yes! In some cases, part of each payment is tax-free, increasing each payment's after-tax value.  The tax-free portion is greatest when the annuity is funded with cash.  If you give appreciated property to fund a gift annuity, only that portion of the reportable gain attributable to the annuity interest is deemed taxable; the taxable portion of the gain is spread over the life expectancy of the donor and passed through the annuity payments.

    Example

    Karen Lazar is 82 years old and has been investing primarily in fixed income investments to supplement her income.  She has a $50,000 Certificate of Deposit that is maturing, but the reinvestment rate is only 5%.  She decides to put the $50,000 into a NIF Charitable Gift Annuity.

    At her age, NIF can create an annuity that will pay Ms. Lazar 8.5% annually on her $50,000.  As a result of making this gift, she is entitled to an income tax charitable deduction of $25,788.  Ms. Lazar will receive a yearly annuity of $4,250.  Furthermore, approximately 68% of each annuity payment is tax-free for the next 8.3 years.  After Ms. Lazar's death, the proceeds from the charitable gift annuity will be used to fund NIF's existing program or to address a new situation that Israel may be facing at the time.

    Your Benefits Include:

    • Federal income tax charitable deduction.
    • Fixed annual income for life for up to two named annuitants, guaranteed by the general resources of NIF.
    • If you fund the annuity with an appreciated stock, bond or mutual fund, a portion of the income will be considered a capital gain distribution.  If you are named an annuitant, this tax will be spread out over your life expectancy.
    • Your estate may enjoy reduced probate costs and estate taxes.
    • You will provide generous support to NIF to help continue our important work.

    The Deferred Payment Charitable Gift Annuity
    Many retirement arrangements such as IRAs, Keoghs and 401(k) plans have contribution limits.  An alternative, if you are younger and wish to supplement your retirement plan, is the deferred payment charitable gift annuity.  This program enables you to give cash or securities now and receive annuity payments at a later specified time, such as at retirement.  Deferring annuity payments yields higher payouts when payments begin and a significantly larger income tax deduction in the year the annuity is established.

    Example

    Mr. Nahum, age 50,, has maximized his contributions to all of his retirement plans.  He is an active supporter of NIF and is looking for creative ways to save for his planned retirement at age 65.  By contributing $25,000 now to a deferred payment charitable gift annuity that will begin at age 65, Mr. Nahum is entitled to an immediate income tax charitable deduction of $12,484.75. Additionally, when he reaches age 65, NIF will pay him a lifetime annuity of $3,075, which represents 12.3% return on his initial $25,000 gift.

     


     

    Note: The foregoing is designed to provide general gift, estate and financial planning information.  If you have any questions, or if you and/or your financial advisor, tax advisor or attorney would like an appointment, without obligation, to consult with us with reference to your gift plans, please contact Steve Rothman at 415-543-5055 or via email at .

    The information on this site does not constitute legal or tax advice. It is important that you consult with your financial or tax advisor before making any gifts, and certainly with your attorney before drafting any trusts or your will.

    The New Israel Fund makes no representations, warranties or assurances as to the accuracy or completeness of the information provided herein, and are not liable for any damages related to your reliance thereon.

    NIF is a charitable organization, registered in the United States, Canada and Great Britain.  Contributions to NIF are tax deductible to the extent permitted by law in the United States.

    Donors in Canada are encouraged to contact the NIF Canada office at (416) 781-4322 or by email at to arrange for your tax deductible gift.

    Donors in Great Britain are advised to consult the appropriate legal or tax counsel.


    At this time, only U.S. tax receipts are issued online.