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Deferred Payment Charitable Gift Annuity

A deferred charitable gift annuity provides fixed payments for life to you (and/or one other person)  in exchange for your gift of cash or securities. The payments start on a date you choose that is at least one year after you make the gift.  If you are unsure exactly when you want payments to begin, you may choose a date within a five year window. Deferred gift annuities are easy to set up and the payments you receive are backed by the all of the resources of Mount Holyoke College for as long as you live. 

A deferred charitable gift annuity could be right for you if:

  • You have sufficient income now but want to supplement your cash flow later, for example, when you retire.
  • You want the security of fixed, dependable payments for life.
  • You want to save income taxes or capital gains taxes.
  • You want income that may be partially tax-free.
  • You are considering a gift amount of $10,000 or more.

Diana Brassard

Diana Brassard '90

"Establishing a deferred gift annuity not only benefited my retirement plans, but also allowed me to pay it forward so that Mount Holyoke women get the support they need. ”  

Read More ›

Print information on Deferred Gift Annuities.

You are invited to consult with Mount Holyoke’s experienced gift planning staff about gifts tailored to meet your individual circumstances. You may also use the tool below to help estimate how a deferred charitable gift annuity might benefit you.


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

Fixed payments for life, starting when you want them
In exchange for your irrevocable gift of cash, securities, or other assets, Mount Holyoke will pay you, and or one other person, a fixed amount each year for life.

  • You choose when payments start. For example, you can specify that payments start in the year you plan to retire.  Or, you may specify a five year window in which you would like payments to begin.
  • Once payments start, they will last for your lifetime. 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, no matter what.
  • Payments are very secure. They are backed by all of the resources of Mount Holyoke, not just by the assets you donate.

Tax-advantaged payments
Typically, part of each payment will be tax-free for many years. This tax-free portion makes your payments more valuable than an equal amount of fully taxable income.    

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 a child, a sibling, or an employee.  

Payment amount depends on age and years until payments start
As shown in the table below, the older you are when you start receiving payments and the longer you wait until your payments start, the greater the payment rate you will receive.

Sample Deferred Annuity Rates for a $10,000 gift

Age at GiftYears DeferredPayment RatePaymentDeduction


Tax benefits

Income tax savings 
You will earn an immediate income tax charitable deduction in the year of your gift, providing tax savings if you itemize. The amount of this deduction will depend on several factors. If you cannot use the entire deduction in one year, you may carry forward your unused deduction for up to five additional years.

Capital gains tax savings
If you give appreciated property, such as stock, to create a deferred gift annuity, you will pay tax on only some of your capital gain in the property. Even better, if you are the payment recipient of your deferred gift annuity, this capital gain will be spread out in installments over many years and won't start until the year you begin to receive payments. In this case, your capital gain income will replace some of the tax-free portion you would receive if you were to give cash.

Estate tax savings
By removing the gift assets from your estate, you may also reduce future estate taxes and probate costs. The amount of these savings will depend on the size of your estate and on estate tax law (both at the state and federal leval) in force at the time your estate is settled.


Gina '72, age 55, works full time and expects to work for another 10 years or so. She owns CDs and a money market account, both of which pay about 2% interest each year.

Gina would like to make a significant gift to Mount Holyoke College, but she wants to be sure she has adequate cash flow after she retires. She can dramatically increase her after-tax cash flow in her retirement by giving some of her CD or money market account funds to Mount Holyoke College in exchange for a deferred gift annuity.

The table below illustrates the results if Gina gives $50,000 to create a deferred gift annuity that starts making payments in 10 years. Gina is able to significantly increase her cash flow from the $50,000, and will receive an immediate income tax deduction that may provide tax savings!

 Tax benefitIncome before taxIncome after tax (37% tax rate)
Gina keeps $50,000 in CD/Money MarketNone$1,000$630
Gina funds a 9.0% gift annuity with payments deferred 10 years$23,712* income tax deduction$4,500$3,325

*Deduction amount may vary depending on the timing of the gift. 


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