Before Rick Graber recommends a charitable gift annuity to his clients, he makes sure they “check all the boxes,” as he puts it.
- Are they charitably minded?
- Are they looking for a steady stream of guaranteed income in retirement?
- Do they own appreciated assets that could bypass capital gains taxes as a charitable gift?
The veteran financial advisor introduced a new client to charitable gift annuities after observing her dedication to their church for years. “When I had the opportunity to become her advisor, I could ask if her church will miss her financial support when she’s gone,” Rick says. “It made her think and want to know more.”
A charitable gift annuity is especially effective with securities that have been held for a long time and may have significant gains. He says, “If they gift those to Thrivent Charitable, they won’t pay taxes on the gain and the income stream lasts a lifetime. It helps take longevity risk off the table.”
Rick acknowledges that not all clients have tax advantages on their mind when considering long-range gifts to charities and churches they support. But he adds, “I have yet to find anybody who doesn’t like minimizing taxes.”
Donors claim a tax deduction in the year their gift is made and may carry forward an additional five years. Also, part of the gift annuity income is typically free from taxes.
Where their heart is
One of Rick’s favorite questions to ask prospects and clients is, “What’s important to you?” Their answers can take the conversation in many directions.
“I ask about their financial house, but I also ask where their heart is,” he says. “I never assume somebody does or does not have charitable intent. I’m intentional about asking everyone,” he says.
How charitable gift annuities work
With charitable gift annuities, the donor gives cash or securities ($10,000 minimum) to Thrivent Charitable and receives a lifelong stream of income. Your clients can choose either immediate or deferred gift annuity set up for one life or two, joint or successive.
Ongoing quarterly payments remain constant, regardless of investment performance. Even if the gift annuity is eventually depleted, Thrivent Charitable will pay income out of reserves. At death, the remaining assets are directed to a donor advised fund and distributed to charities selected by the donor over time.
Contact our team of gift planners to discuss unique solutions for your clients.