Charitable Gift Annuities (or CGA's) serve the needs of many donors who wish to give, but may be reluctant to do so because of worries about the future of their own financial needs and those of their loved ones. Charitable Gift Annuities are a way of furthering the causes you believe in while at the same time offering you the benefits of lifetime payments, management of your assets, and tax savings.

Here are just some of the advantages of creating a CGA to benefit Purnell School:

• You will receive income for life
• You will receive an immediate income tax charitable deduction
• Part of the income from your annuity may be tax-free
• You may reduce you estate taxes
• The rate of return from your annuity is fixed for life
• If you fund your annuity with appreciate securities, you will avoid the immediate capital gains taxes
• If you fund your annuity with low yielding securities or other acceptable property you may actually increase your current income
• You will have the satisfaction of knowing that you are supporting Purnell School

Did you know that you can make a provision in your will that a part of your estate be used to create a Charitable Gift Annuity for Purnell School? This is another way of helping to ensure supplemental income for a loved one after you are gone. This type of arrangement may have potential tax savings implications as well.

Since a portion of the gift will be used for charitable purposes, you are entitled to an immediate Federal tax deduction. In addition, a portion of each annuity payment is tax-free for a period of years (this is based on the life expectancy of the donor). The IRS will allow individuals to carry forward any excess deductions for up to five years if they are unable to use the entire deduction during one tax year. If the annuity goes to Purnell School at the end of your lifetime, then the amount of the asset which you used to fund your CGA will notbe included as a part of your taxable estate. Some estate taxes may be due if payments continue to a survivor other than your spouse however.

A Charitable Gift Annuity is a contract between a qualified charitable institution and the donor. The charitable institution agrees to pay the donor (or another person named by the donor) income for lifetime in return for a gift of cash, securities, or other property which may be subject to approval. The payments may also be continued for the life of a second individual, such as a spouse, depending on how the annuity contract is setup. The payment(s) are a fixed sum, the amount of which is based on the size of the gift and the number and ages of the beneficiaries. The interest rate for your gift annuity is fixed at the time the contract is signed. The interest rate remains the same over the lifetime of the donor, and guarantees a fixed dollar amount. This means that the payments are not affected by fluctuations in the stock market, or the economy. In all cases, the rate of return payable to annuitants is not likely to exceed those recommended by the American Council on Gift Annuities.

When deciding to establish a gift annuity, you must first decide how much you would like to contribute. Unlike the $2,000.00 maximum allowed for an IRA, you can place as much into your annuity as you want. Purnell's current policy requires a minimum amount of $10,000.00 for any annuity agreement.