The Rock - Sigma Nu Fraternity, Inc.

Earn Income for Life with a CGA

Establishing a charitable gift annuity is a safe way to produce a secure, steady fixed income for yourself while providing significant benefits to Sigma Nu.

With the unpredictability of the stock market and investment income, the timing is right to lock in a fixed rate of income for the remainder of your life. Without regard to the stock market or the economy, your investment in a charitable gift annuity will provide you with consistent annual payments.

Here’s how it works: A charitable gift annuity is a contract between you and the Educational Foundation. In exchange for your gift of cash, property, stocks, bonds or other assets, the Foundation agrees to

pay one or two people you name (called annuitants) a fixed amount each year for life. The amount you receive each year depends primarily on age; the older you are, the larger the payment.

Sample Rates

Age	Rate	Age	Rate
50	4.4%	80	7.1%
60	5.0%	90	9.5%
70	5.7%

A gift annuity is very similar to an annuity you might purchase from an insurance company. What makes the gift annuity unique is that you are also making a charitable donation to an organization you care about, so you receive a federal income tax deduction for your generosity. In exchange for the benefits you receive today—income for life and a charitable tax deduction—you can help make a substantial difference in Sigma Nu’s future.

A few advantages of a charitable gift annuity:

Increased Income
A charitable gift annuity can increase the amount of income you receive annually from your investments. For example, Brother Jones, age 75, has $25,000 in a Certificate of Deposit at his local bank paying him 3.5% interest. He would like to find a higher rate of return, but doesn’t want to invest in the stock market because he wants the income to be consistent.

Brother Jones qualifies for a 6.3% gift annuity through the Sigma Nu Educational Foundation. If he donates the $25,000 to the Foundation, he will receive annual payments totaling $1,575, almost doubling his income. (Payout rates change regularly based on upon the recommendations of the American Council on Gift Annuities. Please contact the Foundation for current rates.)

Charitable Deduction
When you establish a gift annuity, you also qualify for a charitable tax deduction on your federal tax return. Brother Jones, for example, receives a federal income tax deduction of $10,424 for his gift to the Foundation. If he can't use the full amount of the deduction in the first year, he can carry it forward.

Tax-Free Income
As a rule of thumb, some 25-50% of the annual income will be tax-free because the Internal Revenue Service considers part of the income a return of principal. In Brother Jones' case, three-fourths of his annual $1,575 payment will be free from income tax for the first 12 years. After that, the entire annuity payment is taxed as ordinary income.

Capital Gains
If you give appreciated property, such as stocks, you will pay capital gains tax only on part of the appreciation, and you may spread that tax over the term of your annuity; it isn't all paid at once. Although you cannot completely eliminate capital gains tax exposure with an annuity, the advantage is that your gains are reported over many years, not all at once.

Free e-brochure
To receive a free e-brochure explaining the benefits of establishing a charitable gift annuity, visit our web site and click on the e-Brochures icon in the left-hand column. Look for the brochure entitled: Strengthen Your Future With a Charitable Gift Annuity, about halfway down the list.

In Summary
With a charitable gift annuity, you receive:

Fixed income for life
Federal Tax Savings
Satisfaction of furthering the work of the Sigma Nu Educational Foundation

If you are interested in learning more, we would be pleased to provide you with a personalized, confidential illustration of how a gift annuity can benefit you. All information will be held in the strictest confidence. Please contact Brad Hastings at (540) 463-1869 or Brad.Hastings@sigmanu.org for more information.