Immediate Payment Gift Annuity

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An immediate charitable gift annuity provides fixed payments to you (and/or one other person) for life in exchange for your gift of cash or securities to Mount Holyoke College–with payments beginning six months after the date of your gift. Gift annuities are easy to set up and the payments you receive are backed by all of the resources of Mount Holyoke College for as long as you live.   

An immediate charitable gift annuity could be right for you if:

  • You want to maintain or increase your income.
  • You want the security of fixed, dependable payments for life.
  • You want benefical income tax or capital gains tax implications.
  • You want income that may be partially tax-free.
  • You are considering a gift amount of $10,000 or more.
  • You are at least 55 years of age.

Download a PDF on Immediate Payment Gift Annuity.

 

 

 

 


How Your Gift Helps

Your gift is an investment in today's Mount Holyoke students, in women, and in the world. Mount Holyoke women look forward and give back.

See Your Impact »

 

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A simple contract
An immediate charitable gift annuity is a simple arrangement between you and Mount Holyoke College that requires a one or two page contract. There are no costs to you to establish the arrangement and no costs to maintain it.    

Fixed payments for life
IIn exchange for your irrevocable gift of cash, securities, or other assets, Mount Holyoke will pay you, and/or one additional beneficiary a fixed amount each year for life. 

  • Payments last for the lifetime of the beneficiary(ies). You cannot outlive your payments.
  • Payments are predictable. Your payments will not be affected by investment performance or market conditions. You will get the same amount each year. 
  • Payments are very secure. They are backed by the all of the resources of Mount Holyoke College, not just by the assets you donate.

Tax-advantaged payments
Part of each payment typically will be tax-free for many years. This tax-free portion makes the payments more valuable than an equal amount of fully taxable income. The amount of this tax-free portion will be greater if you give cash than if you give stock or other appreciated property.

Who can receive payments?
You decide who will get the payments from your gift annuity. Usually, this will be you, or you and your spouse. You can, however, select any one or two people to receive the payments from your gift annuity. For example, you may wish to provide income for parents, a sibling, or an employee.  

Payout rate depends on age
The older the beneficiary is when you make your gift, the greater the payment rate received. If you choose other people to receive the payments from your gift annuity, their ages at the time of your gift will determine their payment rate. The minimum age for an immediate charitable gift annuity at Mount Holyoke is 55.

Sample Annuity Rates

Gift Amount Age Payment Rate Annuity Deduction

$10,000

55

4%

$400

$2,655

$10,000

66

4.8%

$480

$3,570

$10,000

67

4.8%

$480

$3,789

$10,000

68

4.9%

$490

$3,884

$10,000

69

5%

$500

$3,988

 

Tax benefits
You will earn an income tax charitable deduction in the year of your gift. If you cannot use the entire deduction that year, you may carry forward all unused deduction for up to five additional years. 

If you give appreciated property such as stock to create a gift annuity, you avoid tax on a portion of your capital gain in the property. Even better, if you are also the beneficiary of your gift annuity, you will be able to pay the tax on the rest of your capital gain in installments over many years.

By removing the gift assets from your estate, you may also reduce future estate taxes and probate costs.

Assets to consider
Cash currently held in a savings account, bank CD, or money-market fund makes excellent funding assets. Usually, a gift annuity will provide you with larger payments than any of these investments.
Securities, especially highly-appreciated securities that you have owned for one year or more, are also an excellent funding asset. Giving them to us in exchange for a gift annuity will allow you to unlock their value to increase your cash flow and avoid substantial capital gains tax at the same time.

 

Example

Helen '63 is a 71 year-old widow. She would like to make a significant gift to Mount Holyoke College, but she is dependent on the income produced by her investments. One of these investments is stock in XYZ Widget Corporation that she and her late husband purchased many years ago for $3,000.

Her stock is now worth $10,000 but provides little income - about $121 after tax. Helen is reluctant to sell her XYZ Widget stock to reinvest in higher yielding assets because she will have to pay $1,400 in capital gains tax in the process. This will leave her with just $8,600 to reinvest.

Helen is pleased to learn that she can make a significant gift to Mount Holyoke College and increase her cash flow by giving her XYZ Widget stock to Mount Holyoke in exchange for a gift annuity. She can also save substantial income and capital gains taxes at the same time.

  Tax result Cash flow before tax Cash flow
after tax
(39.6​% tax rate)

Helen keeps her stock

None

$200

$121

Helen sells and reinvests for 4.0% yield

Owes $1,400 capital gains tax

$344

$208

Helen funds a 5.3% gift annuity

$4,108* income tax deduction
Avoid tax on $2,875* of capital gain

$530

$419

*Deduction amount may vary depending on the timing of the gift.  The charitable deduction is equal to the gift portion used immediately by Mount Holyoke College and designated to a fund of your choosing. For California donors, the gift portion is preserved until the annuity ends.