Charitable Gift Annuity

Charitable Gift Annuity

The charitable gift annuity if not a trust, but is a contract between the Monticello Area Education Foundation and the donor whereby the Foundation promised to pay a fixed annuity to a maximum of two beneficiaries (beginning immediately or deferred to a later date) in exchange for the irrevocable transfer of assets by the donor to the Foundation. Annuity payments are based on the initial market value of the assets contributed and the ages of the income beneficiaries. A portion of the annuity payment may be considered a tax-free return of principal. An income tax deduction is allowed for the difference between the value of the gift and the present value of the annuity.