Gift Annuities

How do gift annuities provide annual income payments?

As part of the gift annuity contract, the LCMS Foundation will make payments to you for the rest of your life. The amount of those payments is determined by many factors, including your age and the annuity rate offered at the time of your deposit. You can begin receiving payments immediately or choose to defer them until retirement or some other future date in exchange for higher payments then.

The payment amount is guaranteed and fixed—it will never change, won’t fluctuate with inflation or decrease if investment returns are lower than expected. Couples can also create a gift annuity. Payments still begin whenever the couple chooses, but will continue until both individuals have passed on to Heaven.

Click below to use our online calculator to find your estimated annual annuity payout, based on your age, and your anticipated charitable deduction for tax purposes.

Calculate Your Rate Today

How do gift annuities provide tax benefits?

In addition to an annual income stream, annuities often allow donors to take a partial tax deduction in the year you set up the annuity. The deduction is based on the amount the IRS calculates will ultimately go to the charity, based on your life expectancy and payments you’ll receive back from the annuity during your lifetime. 

A portion of your annual payments is also tax-free. A larger percentage will be tax-free if you transfer cash to fund your gift annuity; a lesser percentage if you transfer securities.

However, if you fund your annuity by transferring securities (or other appreciated assets), you may also be able to avoid or minimize the capital gains tax you’d pay on those assets if you sold them outright. See more about donating appreciated assets here.

How does my annuity become a gift to ministry?

Annuity funds are carefully invested so that they earn enough interest to provide annual payments to you while you're alive, while leaving a good portion of the original principal intact as a future gift to ministry. The amount that’s ultimately given to the ministry you designate is based on how long you receive payments. 

As a guideline, about half of your gift annuity’s original amount will become a gift to your ministry of choice. For example, if you fund an annuity with $10,000, and receive payments until your average life expectancy, approximately $5,000 will be gifted to the ministry you chose to bless.

The Foundation has decades of experience ensuring annuity contracts are fulfilled according to the donor’s wishes, and that congregations, LCMS schools or other ministries receive gifts promptly.