Life income gifts serve a dual purpose: They provide philanthropic support for MACU while also providing both a charitable income tax deduction and an income stream to you and/or your loved ones. These gift vehicles can provide income benefits comparable to—or in some cases exceeding—those that might be earned in ordinary investments. Many donors establish life income gifts with assets that are producing a very small amount of income, such as cash or appreciated stocks that do not earn dividends.
A charitable gift annuity is a simple contact between you and Mid-America Christian University. In exchange for your irrevocable gift of cash, securities, or other assets, MACU agrees to provide one or two annuitants you name a fixed income for life. The interest rate is based on the age of the donor, set at the time of the gift, and payments are guaranteed by the general resources of MACU. When you establish a charitable gift annuity, you get to decide what program at MACU the annuity assets will ultimately support.
A charitable remainder annuity trust provides a fixed income like a gift annuity, but the tax treatment of the payout may be preferable for donors giving highly appreciated assets. The "trust" is a legal instrument – a receptacle – into which a person can place ownership of assets in order to accomplish specific financial and charitable goals. As an annuity trust donor, you irrevocably transfer assets, usually cash or securities, to a trustee of your choice (for example, MACU or a bank trust department). During the trust's term, the trustee invests the trust's assets. Each year, the trustee provides a fixed dollar amount to one or more income beneficiaries named by you on an annual, semi-annual or quarterly basis. Payments must be at least 5% of the trust's initial value and are made up of trust income, or trust principal if income is not adequate.
A charitable remainder unitrust makes payments that fluctuate with the market and therefore may provide a hedge against inflation. The income to the donor is based on a specified percent of the trust principal, revalued annually, and reflecting an increase and/or decrease in the value of the trust's assets. The trust assets become property of MACU upon the donor's death, or in a pre-established time period. Additional contributions can be made to the trust. Income tax deductions for the donor are based on present value of the remainder interest going to the university.