Charitable Gift Annuity
by Lisa P. Sierk, Director of Endowment Ministries
LSierk@rrumc.org | 216.926.1702
A charitable gift annuity (CGA) allows individuals to donate (including a one-time distribution from an IRA) to a qualified charity – including RRUMC – and receive income for life.
A CGA is a lifelong contract between donor(s) and a 501(c)(3) qualified public charity, such as RRUMC.
When you donate, the church, through our partnership with the Methodist Foundation of Ohio, invests the gift and pays you a fixed income for life, based on your age, life expectancy, and whether there are one or two beneficiaries. At the end of your life – or your spouse's if you're giving as a couple – the church receives the remainder of the gift.
Thanks to a provision in the SECURE 2.0 Act, individuals ages 70½ and older can make a once-in-a-lifetime distribution directly from their IRA to one or more CGAs, which will be treated as a qualified charitable distribution (QCD) and will count against your annual QCD limit.
(For 2025, CGA and QCD limits are $54,000 and $108,000, respectively, and will be indexed to inflation going forward.) This distribution is excluded from your taxable income, and it may be used to satisfy all or part of the IRS-mandated required minimum distributions (RMDs) that begin at age 73 (75 for those born after 1959).
Starting in 2026, cash gifts will be deductible only to the extent the contribution exceeds 0.5% of your AGI. For example, say your AGI for 2026 is $100,000 and $2,000 of your cash gift goes to charity. Under the new tax rule, only $1,500 ($2,000 – $500) of your contribution would be tax deductible.
Contributions that exceed the AGI limits can be carried forward and used for up to the next five tax years, but after 2025, the excess amount for cash gifts must also exceed the 0.5% AGI limit.
by Lisa P. Sierk, Philanthropic Advisor, Director of Endowment Ministries
Ultimately, a CGA is just one way to make philanthropic contributions and should always be considered in the context of your overall wealth and estate plan.
Whatever you decide, I applaud your commitment to charitable giving and your interest in maximizing your impact.
As always, before making any gift, you should consult your tax advisor to determine the best funding method for your situation.
Is an annuity through RRUMC / Methodist Foundation of Ohio right for you? Please let me know if you have any questions or how I can help.
Lisa can be reached at LSierk@rrumc.org or 216.926.1702.