Charitable gift annuities
A gift annuity is an agreement between MIT and a generous donor.
The donor makes a contribution in exchange for MIT’s promise
to pay one or two annuitants a fixed income for life. The donor may contribute
either cash or securities to establish the gift annuity. He or she receives
an income tax deduction in the year of the gift, which can be carried
forward for five more years. Payments to the beneficiaries—which
may begin immediately—are made quarterly for life.
Gift funds remaining after the death of the last annuitant will be
used by MIT for purposes specified by the donor at the time of the gift.
The minimum contribution to fund a charitable gift annuity is $10,000.
Additional gifts require the establishment of separate gift annuity agreements.
Charitable gift annuities have been providing consistent and secure
incomes to MIT donors and their loved ones for many years. In fact, the first
such fund was established in 1865—almost a century and a half
ago—and they have been a favored form of giving to MIT ever
since.
Sample one-life rates for a $10,000 charitable gift annuity
| Age |
57 |
60 |
65 |
70 |
75 |
80 |
85 |
90+ |
| Rate |
5.6% |
5.7% |
6.0% |
6.5% |
7.1% |
8.0% |
9.5% |
11.3% |
| Income |
$560 |
$570 |
$600 |
$650 |
$710 |
$800 |
$950 |
$1,130 |
To request a personalized proposal, please use our electronic
form and
provide us with some basic information.
Or, feel free to contact MIT’s Office
of Gift Planning at
gift_planning@mit.edu or 617.253.6463
with your questions.
Case study: Establishing a charitable gift annuity
Lawrence Hamilton, 78, and his wife, Sarah, 77, want to make a gift
that will provide them with a steady income, while also supporting MIT.
Hamilton—who received his Ph.D. in chemistry at MIT in 1960,
and who went on to a successful career as a researcher at Kodak—wants
to repay the Institute for the graduate fellowship he was awarded almost a half-century
ago. The Hamiltons hold stock worth $100,000 that they acquired several
years ago for $40,000. The stock has been yielding two percent ($2,000)
per year.
The Hamiltons decide to transfer the stock to MIT in exchange for a
gift annuity to be paid them by the Institute. They will begin receiving
an annual income of $7,100, based on the two-life annuity rate for their age bracket of 7.1 percent.
A portion of the annuity payment is tax-free, and a portion is reportable
as tax-favored capital gains income. The balance of their annuity income
is taxed as ordinary income.
By establishing a gift annuity, the Hamiltons have—
- provided a graduate student in chemistry with critical financial
aid,
- increased their annual income from this asset more than threefold,
- reduced their capital gains taxes, and
- received an immediate federal income tax deduction of approximately
$41,415.
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