Merced College Foundation Offers Gift Annuities

Aside from those gifts established through a bequest, the gift annuity is the oldest form of charitable giving. But, it's new to the fund raising efforts of the Merced College Foundation.

"We have linked our efforts with other community college foundations around the state in offering gift annuities," said Executive Director Robin Shepard. "We believe that this form of charitable giving offers outstanding benefits to the donor and can make their philanthropic dreams come true for their community college."

Through a legal partnership with the non-profit Community College League of California and the Network of California Community College Foundations, the Merced College Foundation is issuing gift annuity agreements. Simply, a gift annuity allows a donor to make a substantial gift to a charitable organization while receiving a lifetime income.

Gift annuities offer donors several economic benefits:

• "You are entitled to a sizable income tax charitable deduction."
• Annuity income and your tax savings usually produce increased spendable income.
• "When you donate appreciated securities, capital gains taxes may be avoided."
• The donated assets are removed from your estate for gift and estate tax purposes.

In exchange for an irrevocable contribution of cash or securities, the donor will receive a fixed annual income for life. A portion of each annuity payment is deemed to be a tax-free return of principal. If cash is used to fund a gift annuity, you may claim a deduction in an amount of up to 50 percent of your adjusted gross income (AGI). Gifts of appreciated securities are deductible up to 30 percent of your AGI. Any unused deduction may be carried forward for five years.

How is the annuity amount determined?

The Merced College Foundation uses rate tables prepared by the American Council on Gift Annuities (ACGA), a national non-profit organization. Annuity rates are determined by the age(s) of the annuitant(s).

Who may be an annuitant?

One or two people may be annuitants. The donor names the annuitant(s) when the gift contract is prepared. Usually, the annuitant is also the donor.

What is the minimum gift amount?

The minimum gift amount to establish a charitable gift annuity is $5,000. The minimum age to begin receiving payments is 60.

Are the gift annuity payments guaranteed?

Yes. The gift annuity payments are guaranteed by the Community College League of California, which holds the license on behalf of the state community colleges. How will my gift be invested? All charitable gift annuities are held in trust through the Charitable Management Group of Wells Fargo Bank. Gifts remain in the fund until the gift contract expires.

What will my gift annuity support?

Your gift annuity will support the mission of Merced College, which is to provide the best education programs and services for residents of our local communities. With costs of education rising each year, the challenge for community colleges is to close the gap between those actual costs and state support. Private giving allows the college to achieve excellence in its academic and community service programs.

For more information on the gift annuity program at Merced College Foundation, call
Robin Shepard at (209) 381-6470.