Charitable Gift Annuity

Income for you now and support for Colby in the years ahead
 campus lifeThe charitable gift annuity is a simple mechanism that can increase your income, offer both current and future tax savings, and minimize your capital gains exposure.

The annuity is the oldest life-income-producing gift known in the United States, dating back to 1843, when what is believed to be the first charitable gift annuity was issued by the American Bible Society.

At its heart, a charitable gift annuity is a contract between the donor and Colby. A simple one- or two-page document, the charitable gift annuity guarantees that the College will pay a fixed annual amount, for life, to one or two beneficiaries named by the donor. Colby's obligation to make these payments is backed by the full faith and assets of the institution and is not subject to investment performance.
  • Colby makes fixed annual payments to you or a loved one for life—backed by the College’s assets and not subject to market fluctuations.
  • You receive an immediate tax deduction and possible additional tax savings in the future.
  • You can support a Colby initiative that is important to you.
  • You become a member of the Willows Society, which recognizes those who have included Colby in their plans.
The amount of the annual payment (the annuity) is determined by the age(s) of the beneficiary(ies) and whether one or two beneficiaries have been named. The older the beneficiary(ies) at the time of the gift, the higher the payout rate and the higher the charitable deduction. In addition, the payments received by the beneficiary(ies) may be partially tax exempt.

The income tax charitable deduction generated by this gift may be taken in the year the gift is made, and the resulting tax savings have the effect of reducing the cost of the gift. The table below shows the income tax deduction and annual payout resulting from a $25,000 cash gift for a one-life charitable gift annuity using rates in effect as of Jan. 1, 2012.

Age Annuity Rate Annual Payment Tax-Free Portion Deduction Amount
55 4.0% $1,000 $715 $4,627
60 4.4% $1,100 $806 $5,578
65 4.7% $1,175 $885 $7,389
70 5.1% $1,275 $992 $9,228
75 5.8% $1,450 $1,156 $10,670
80 6.8% $1,700 $1,386 $11,978

At Colby you may establish a charitable gift annuity with a minimum gift of $5,000 in cash or marketable securities.

Calculations shown here are based on current Colby annuity rates at sample ages and the December 2011 IRS discount rate of 1.6 percent.