Doing Well for Yourself by Doing Good for God
Did you know that you could make money by helping your parish?
Like a lot of people, I sometimes while away time surfing the Internet. And lately I've spent quite a bit of time poking around The Episcopal Church Foundation's information-packed Web site. The other day; however, I made a surprising discovery while surfing the Foundation's site. I found myself in a place on the Web site with this address www.giftlegacy.com/presents.jsp?WebID=GL2004-0231.
It's a page titled, "Your Plan," and it has several different calculators that generate examples about how people can help various Episcopal parishes by making a planned gift. There are all kinds of ways to make a planned gift, like designating your parish in your will. To see for myself how such a gift might work for me, I clicked on a link called "Charitable Annuity Trust." I love playing around with calculators, and it was by using this one that I made my remarkable discovery.
A Charitable Annuity Trust is a custom-designed and individually managed trust that enables you to retain a fixed income, claim a current income tax deduction and make a future gift to charity. So as a trial, I wanted to know what would happen if I took $25,000 I have in a CD (Certificate of Deposit) and used it to make this kind of a gift. Here's what I discovered:
I realized an annuity rate of 5.2 percent, the highest I can get given my age and the amount of money involved. So, if I transfer $25,000 to the trust and name my parish as the charitable remainder beneficiary, the trust will pay me $1,300 each year for my lifetime, no matter how long I live. The CD I have pays me only 3.4 percent or $850 per year. That means I can make $450 more per year by giving the money to my parish than I could by keeping it in the CD. But it's even better than that!
Since my parish will receive the remainder of the assets in the trust at the end of my lifetime - a whopping $29,153 - a portion of which is deductible for income tax purposes. So, my gift of $25,000 would give me a charitable deduction this year of $7,651.
What if I were 65 this year? The top interest rate goes up to 5.7 percent, translating into $1,425 a year in income for life-$575 more than I would get from a CD, and I'd get an immediate tax deduction of an eye-popping $8,637.
So, tell me this: Why would those who care about helping all their parish's wonderful ministries keep their money in CDs when they could make a gift to their parish that can actually make them money every year for the test of their lives?
(This article was re-printed from St. Stephen's newsletter, First Order. Since it was published in November 2008, annuity rates have been lowered.)
If you are interested in using the Episcopal Church Foundation as a resource, contact Matt Freeman at Matt@episcopalfoundation.org at (800) 697-2858. Also feel free to contact E. John White regarding any Legacy Stewardship matters at ejwhite@diocesewma.org or (860) 928-3705.
- by the Rev. Dr. Stephen L. White, assistant priest, St. Stephen's, Pittsfield