LightHouse supporters often ask us how they can help fund LightHouse programs and services after they pass away. In 2015, for the first time, the LightHouse now offers donors the possibility of creating a Charitable Gift Annuity. We asked attorney Rebecca Dupras to talk about them.
A charitable gift annuity is a great way to make a gift and create an income stream for you or a loved one. In exchange for your charitable gift, you or your loved one will receive a fixed annuity for life, part of which may be tax-free. Additionally you will receive a charitable tax deduction and a potential reduction in gift and estate taxes. The size of the payment is determined at the time the gift is made and will not fluctuate with the financial markets.
Your gift to establish a charitable gift annuity also assures the mission of the organization you support. LightHouse has partnered with the Silicon Valley Community Foundation (SVCF) to issue charitable gift annuities at amounts of $25,000 or more. With assets of approximately $6.5 billion under management, SVCF provides the expertise and financial resources required to back LightHouse’s Legacy Society charitable gift annuities.
Why are gift annuities so appealing?
- You will become a member of the LightHouse’s Legacy Society, your annuity income payments are fixed and are not affected by market turbulence.
- Your payments are secure, backed by all of SVCF’s unencumbered assets.
- You may qualify for a tax-deductible donation.
- There may be a potential to increase your cash flow, especially if the annuity is funded with low-yielding assets.
- A portion of the payments you receive may be tax-free.
- Donors might receive a capital gains tax advantage if the annuity is funded with long-term appreciated assets.
- The security of fixed payments can be directed to you or to a loved one, such as a parent, sibling or child.
Best of all, the residuum will be used for the long-term benefit of our community.
You can contribute cash or publicly traded securities to fund the gift annuity. If you have owned the securities for more than one year and they have appreciated in value, you will not be taxed on the gain when you transfer the securities, provided you are the payment beneficiary. If you are the beneficiary, a portion of the payments you receive will be taxed partly as capital gains and partly as ordinary income, with possibly an additional portion treated as tax-free return of capital. If you contribute cash, your payments will be partially tax-free and partially ordinary income. In short, everybody wins!
Rebecca E. Dupras, Esq.
Vice President, Development
Silicon Valley Community Foundation
Rebecca Dupras, Esq. assists individuals and corporate donors, as well as other nonprofits, to craft meaningful philanthropic strategies. She joined Silicon Valley Community Foundation in 2014 as the director of planned giving. She is skilled at working with donors and their professional advisors to craft deferred gifts to meet their philanthropic goals.
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