CHARITABLE GIFT ANNUITIESCHARITABLE GIFT ANNUITIES

The gift annuity program of the Lutheran Community Foundation (LCF) provides a way for a donor to make a contribution to the LCF, and receive, in turn, guaranteed payments for life. The minimum contribution for a gift annuity is $10,000, and income payments can begin immediately or be deferred to a specific date.

Target Audience

Immediate Gift Annuity Deferred Gift Annuity
  • Older clients (70+)
  • Clients who are fiscally conservative
  • Clients seeking additional income
  • Clients who already have a gift annuity
  • Clients who wish to give cash or appreciated stock
  • Clients with stock who are seeking ongoing income for longterm care or wealth replacement insurance premiums.
  • Younger clients (50+)
  • Clients who want a charitable tax-deduction now but have no need for additional income until retirement age
  • People who want to establish a supplemental retirement plan
  • Clients who wish to give cash or appreciated stock
  • Clients who have maxed out qualified retirement plan contributions, but still need additional retirement income.

Tax and Financial Benefits of Creating a Gift Annuity

  • Your client receives fixed, guaranteed payments for life (based on the full faith and credit of the LCF).
  • The donor receives a charitable income tax deduction in the year of the gift.
  • For gifts of cash, the annual deduction limit is 50% of the donor’s AGI.
  • For gifts of long-term appreciated securities, the annual deduction limit is 30% of the donor’s AGI.
  • Unused charitable deductions may be carried over an additional 5 years.
  • The donor bypasses a portion of capital gains on gifts of appreciated securities; any capital gain is recognized over the lifetime of the annuitant.
  • A portion of each gift annuity payment is usually tax-free.

Benefits to You, the Financial Representative

Helping your clients give through the LCF not only simplifies your work, you’re also compensated for your efforts. Charitable gifts that come to the LCF through the work of Financial Representatives are invested in Thrivent investment products or American Funds, and you receive the corresponding compensation from those companies. Find out more about compensation for Financial Representatives.

You don’t need any special qualifications to facilitate gifts to the LCF, and we support you with the tools and information necessary to complete your client’s gift.

More about Gift Annuities

Gift annuity payout rate. The LCF uses the American Council on Gift Annuities rate table to determine the payout rate on a gift annuity contract. Rates are based on the age of the annuitants and gender is irrelevant. A donor may request a lower payout rate and in return receive a higher charitable income tax deduction.

Tax-free income. Portions of gift annuity payments are usually tax-free. Gift annuities established with cash always have some tax-free income. If a gift annuity is established with appreciated stock, the tax-free income depends on the amount of capital gain in the stock. The higher the stock basis, the higher the tax-free income from the gift annuity.

Gifts of appreciated stock. When giving appreciated stock, the annuitant will recognize a portion of the gain over his or her lifetime. If a spouse wishes to contribute separately owned stock for a gift annuity to benefit both the husband and wife, the Foundation recommends transferring the stock into joint ownership before the gift is made so that the gain will be recognized over a longer period of time, and so tax-free income will be received sooner.


How to Establish a Gift Annuity at the LCF

  1. Request a personalized illustration for your client using our request form.
  2. The Foundation sends you an illustration packet to review with your client.
  3. If your client wishes to proceed and establish a gift annuity, complete and return the Gift Annuity Application and Fund Workbook included in the illustration packet.
    • If the client is giving cash, you may send the check at this time.
    • If the client wishes to give stock, include copies of either the stock certificates or the most recent brokerage statement. LCF will contact you with specific instructions on how to transfer the stock.
  4. Review your compensation options from Thrivent or American Funds.

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