Charitable gift annuity

Charitable gift annuity

Make a gift and receive lifetime income

Are you interested in creating a reliable stream of fixed income payments for yourself or a loved one to supplement other sources of retirement income? You can do so in a tax-advantaged way with a charitable gift annuity (CGA) while providing important support for Indiana University.

It works like this:

  • You make a gift of cash or other assets to IU, and in exchange, we agree to make fixed income payments to you and/or one other person for life.
  • The payment amount is based on the gift amount, the age of the income recipient(s), when the payments begin, and the current rates for charitable gift annuities.
  • You qualify for an immediate income tax deduction for the gift portion of the transaction.

If you fund the CGA with appreciated assets (held for longer than one year), you may be able to spread out the capital gains tax due on the annuity portion. Additionally, part of each income payment may be free of income tax. We will use the CGA balance to support IU programs, education, and research.

See it in action

Cara, age 70, has always wanted to make a significant gift to Indiana University but is hesitant to make an outright gift. She decides that a charitable gift annuity is the right solution for her. She gives IU $25,000, and in return, we agree to provide her with income payments of $1,575 every year for as long as she lives—money that will supplement other sources of retirement income. Her gift qualifies for an immediate income tax deduction, and her income payments will be favorably taxed. The CGA provides Cara with the opportunity to do more for herself and for IU.*

*Example is for illustrative purposes only and uses a 5.8% applicable federal rate.

With a CGA, you have options

You can structure your CGA in a way that works best for your goals and circumstances. You choose:

  • Which assets to donate (cash, stocks, mutual funds, real estate, etc.)
  • The payment schedule (typically annually or quarterly)
  • When your income payments begin (now or in the future)

You can delay the start of income payment—and increase your payment amount.

If you want your income payments to start a year or more after you create the CGA, your gift still qualifies for an immediate income tax deduction, and you will secure a higher payment amount. It’s even possible to leave the start date unspecified.

Utilize your IRA

You can create a new CGA directly from your IRA if you are age 70½ or older, but slightly different rules apply to CGAs created in this way.

  • The IRA distribution to create the CGA is tax free (up to $53,000 in 2024) and counts toward your required minimum distribution (RMD) if one is due.
  • Income payments may only be made to the IRA owner and/or the owner’s spouse.
  • Income payments are taxed as ordinary income.
  • Spouses may combine distributions from their individual IRAs to create a joint-life CGA.