Charitable Gift Annuities
Income for Today, a Legacy for Tomorrow
A charitable gift annuity with Early Childhood Alliance can provide you and/or another beneficiary with stable income for life. You may also receive an immediate income tax deduction.
How it Works
- You create an annuity by irrevocably transferring $10,000 or more in cash, securities, or other property to ECA.
- You and/or up to two beneficiaries received fixed annual payments for life at an attractive rate based on the age of the beneficiaries.
- You can begin receiving payments immediately (if you are 50 or older) or defer payments for a year or more. The older you are when your payments begin, the higher your rate of return.
- You are eligible for an immediate tax deduction. If you donate appreciated assets, you may save on capital gains taxes as well.
- The principal passes to ECA after the lifetime of the income beneficiaries.
How You Benefit
- You and/or your beneficiary receive payments for life.
- You receive an immediate income tax deduction for a portion of your gift.
- Your lifetime annuity is backed with a reserve and the full assets of ECA.
- Your annuity payments are treated as part ordinary income and part tax-free income. If the gift is funded with appreciated property, your annuity payments are also part of capital gains income.
- You will be making a gift that will benefit you right now and provide high-quality early childhood education in the future.
Sample Annuity Rates
By establishing a charitable gift annuity, you will help ensure all children have access to early childhood education, while also receiving payments for life. Below are sample rates, you can also calculate the benefits of a gift annuity with gift calculators.
Charitable Gift Annuity Payment for a $10,000 Gift
| Age | Rate | Annuity | Tax Deduction |
| 60 | 4.9% | $490 | $3,937 |
| 65 | 5.4% | $540 | $4,064 |
| 70 | 5.9% | $590 | $4,400 |
| 75 | 6.6% | $660 | $4,774 |
| 80 | 7.6% | $760 | $5,143 |
| 85 | 8.7% | $870 | $5,660 |
| 90+ | 9.7% | $970 | $6,334+ |
The figures above are sample rates for a single beneficiary and are for illustration purposes only. The deduction is variable and based on the highest available monthly IRS Discount Rate.
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Charitable Lead Trusts
Help provide early childhood education now and help your heirs later.
A charitable lead trust transfers the income from trust assets to Early Childhood Alliance for life or a term of years, after which the assets become available to you or your heirs. This option allows you to immediately provide early childhood education and later leave your heirs assets at a greatly reduced tax rate.
How it Works
Trust assets are often distributed at greatly reduced gift and estate tax rates. Depending on rates at the date of funding, you or your heirs can also receive significant appreciation in these assets with no additional tax consequences.
Here’s the process:
- You transfer assets to a trustee of your choice (Early Childhood Alliance can’t serve as trustee) and create a charitable lead trust.
- The trustee invests the trust assets. Please note that the rate of taxation and the benefits you will receive vary depending on the type of lead trust you establish.
- The trust makes payments (either a fixed percentage of the principal or a fixed dollar amount, depending on the type of trust) to ECA for life or a term of years.
- When the trust terminates, the remaining principal is paid to you or your heirs.
How You Benefit
- You may able to reduce your gift or estate taxes; the tax benefits vary based on the type of trust you create.
- You avoid taxes from all appreciation on assets held within the trust.
- You may be able to set the amount and term of the payments to reduce or even eliminate transfer taxes when the principal reverts to you or your heirs.
- You help build better futures for children now and reduce the taxes due on transfers to you or your heirs later.
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Charitable Remainder Trusts
Generate revenue for yourself today and provide education tomorrow.
Charitable Remainder Trusts allow a beneficiary to receive distributions from the trust each year for life or a term of years, after which the assets become available to Early Childhood Alliance.
How it Works
- You transfer assets to a trustee of your choice (Early Childhood Alliance can’t serve as trustee) and create a charitable remainder trust.
- The trustee invests the trust assets. Please note that the rate of taxation and the benefits you will receive vary depending on the type of remainder trust you establish.
- The trust makes payments (either a fixed percentage of the principal or a fixed dollar amount, depending on the type of trust) to your beneficiary (must be 76 or older) for life or a term of years.
- When the trust terminates, the remaining principal is given to Early Childhood Alliance.
How You Benefit
- You may able to reduce your gift or estate taxes; the tax benefits vary based on the type of trust you create.
- Provides a predictable income for life or over a specific time period.
- You leave a legacy of helping build better futures for children.
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Agency Info
Mailing Address
Early Childhood Alliance
516 E Wayne St
Fort Wayne, IN 46802
Federal Tax ID
35-0953465
