Did You Know You Can Provide for the Foundation and Receive Fixed Payments?

Roland J. Hymel, Jr., nationally renowned retired insurance executive and Foundation donor, took the time to answer questions regarding charitable gift annuities from Charley Strickland, executive director of the St. Tammany Hospital Foundation.

Who should consider a charitable gift annuity? First, it should be someone with charitable intent; for example, a grateful patient who wants to do something special for the hospital by making a substantial gift to the Foundation without reducing their income.

What are the tax advantages? The donor receives an immediate charitable income tax deduction of about 40 percent of the gift and around 70 percent of the annuity income is tax free.

Can you give me an example? For a person 75 years old who makes a gift of $10,000 to the foundation, the income tax deduction is $4,252 and the annual annuity is $640 with $463 of it tax free. But if the donor invested the $10,000 in a long-term CD at 3 percent, he would have an annual income of $300 and would have to pay income tax on the full amount.

Are there advantages to the donor's estate? The gift amount is removed from the estate.

Any other advice? I like using the required distribution from an IRA to fund a charitable gift annuity. You do have to pay income tax on the distribution, but you get a charitable deduction for the gift. The upside is as you get older each year, you can create a new annuity at a higher rate based on your new age.

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For more information on charitable gift annuities, contact Nicole Suhre, CFRE at 985-898-4171 or nsuhre@stph.org.