A charitable gift annuity provides fixed payments for life in exchange for a gift of cash or securities to Commonwealth School. Gift annuities are easy to set up, and the payments you receive are backed by the general resources of Commonwealth School.
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Charitable Gift Annuities
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How Your Gift Helps
Your planned gift helps make the Commonwealth experience possible—today and far into the future. Among many things, your support will help us:
Serve curious students who want to understand their world deeply—and work to improve it
Provide rigorous classes taught by caring faculty that challenge students to do their best work
Increase access to a Commonwealth education for students from communities too often ignored
How Your Gift Helps
A charitable gift annuity could be right for you if:
- You want to maintain or increase your cash flow.
- You want the security of fixed, dependable payments for life.
- You want to minimize income taxes or capital gains taxes.
- You would like income that is partially tax-free.
- You want to make a generous gift to Commonwealth.
- You are considering a gift amount of $10,000 or more.
- You are at least 70 years of age.
Assets to Consider
Cash currently held in a savings account, bank CD, or money-market fund makes an excellent funding asset. Usually, a gift annuity will provide you with larger payments than any of these investments.
Securities, especially highly appreciated securities that you have owned for one year or more, are also an excellent funding asset. Giving them to us in exchange for a gift annuity will allow you to unlock their value to increase your cash flow and avoid substantial capital gains tax at the same time.
Example
Yumi Campbell is a 71 year-old widow. She would like to make a significant gift to Commonwealth School, but she is dependent on the income produced by her investments. One of these investments is stock in XYZ Widget Corporation that she and her late husband purchased many years ago for $3,000.
Her stock is now worth $10,000 but provides little income—about $126 after tax. Yumi is reluctant to sell her XYZ Widget stock to reinvest in higher yielding assets because she will have to pay $1,400 in capital gains tax. This would leave her with just $8,600 to reinvest.
Yumi is pleased to learn that she can make a significant gift to Commonwealth School and increase her cash flow by giving her XYZ Widget stock to Commonwealth in exchange for a gift annuity. She can also minimize substantial income taxes plus avoid and defer capital gains taxes, and will receive an income tax deduction that may provide additional tax savings at the same time.
| Tax result | Cash flow before tax | Cash flow after tax (37% tax rate) | |
|---|---|---|---|
| Yumi keeps her stock | None | $200 | $126 |
| Yumi sells and reinvests for 4.0% yield | Owes $1,400 capital gains tax | $344 | $217 |
| Yumi funds a 6.4% gift annuity | $3,575* income tax deduction Avoid tax on $2,502* of capital gain | $640 | $501 |
*Deduction amount and capital gains tax avoided may vary depending on the timing of the gift.
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