Kenyon College currently administers charitable gift annuities ranging in size from $5,000 to $500,000. A gift annuity is a contract under which Kenyon, in return for a transfer of cash or other property, agrees to pay a fixed sum of money for a period measured by one or two lives. Payments on the annuity are a general obligation of Kenyon College.
The annuity, payable quarterly, is backed by Kenyon's entire assets, not just by the property contributed. The donor receives a charitable deduction in the year of the gift for the difference between the amount contributed and the present value (an actuarially determined value of what the gift is worth at present in tomorrow's dollars using a monthly I.R.S. discount rate) of the annuity payments. The annual annuity is determined by multiplying the amount contributed by the annuity rate, a rate determined by the American Council on Gift Annuities and based on the age(s) of the annuitant(s).
Establishing a gift annuity with Kenyon College is not, and should not be viewed as, an investment. Rather, it is a way to receive annuity payments while making a charitable donation. In this way, Kenyon's charitable gift annuity is different from a commercial annuity. However, there are tax benefits, including a current charitable deduction as described above, partially tax-free annuity payments, and future estate tax savings.
The gift annuity is the simplest of all life income gifts. The donor transfers the property, typically cash or appreciated stock, to Kenyon, and Kenyon sends back a simple charitable gift annuity contract, specifying the payment amounts, the name(s) and address(es) of the annuitant(s) (typically the donor or the donor and spouse), and the dates of the quarterly annuity payments. The donor signs and returns the copy of the annuity contract and Kenyon then proceeds to make payments on the last day of March, June, September, and December of each year. At the time of establishing the charitable gift annuity, the donor specifies the purpose at the College to be supported ultimately by the gift, typically to establish a scholarship or other endowment fund.
Kenyon also offers a "deferred-payment" gift annuity, designed to appeal to the younger donor in the 40 to 60-year age bracket who wishes to augment retirement income on a tax-favored basis. Cash or securities are transferred to Kenyon in exchange for which Kenyon agrees to pay an annuity beginning at a future date - for example, beginning at the donor's retirement.
To learn more about Kenyon's Charitable Gift Annuity Program, contact:
Kyle W. Henderson ’80
Associate Vice President for College Relations
Gambier, OH 43022