Charitable Gift Annuities

Transcription

1 EWU Policy Effective October 12, 2007 Organization Unofficial Entities Charitable Gift Annuities History: This publication is new. It was adopted during open session of the EWU Board of Trustees on October 12, 2007 and is effective as of that date. Summary: This policy establishes the authority under which Charitable Gift Annuities may be issued for Eastern Washington University. Applicability: This policy applies to the Office of Advancement at Eastern Washington University, or any other university persons involved with the management of Charitable Gift Annuities. Proponent: The proponent of this policy is the Office of Advancement. Authority: The authority for establishment and modification of this policy is the EWU Board of Trustees (BOT). Changes to this policy must be approved by the BOT and must conform to the procedures for changing policies contained in EWU Policy Delegation: The Board of Trustees delegates authority for modification of appendices to this policy to the Office of Advancement. Review: This policy will be reviewed every three years. Supplementation: Supplementation of this policy and establishment of local guidance and procedures in support of this policy is granted to colleges and departments, so long as any such supplementation does not conflict with university level policy or higher authority. Suggested improvements: Users are invited to send comments and suggested improvements to: Office of the President ATTN: Policy Administrator Eastern Washington University 214 Showalter Hall Cheney, WA CONTENTS Chapter 1 General Purpose Paragraph 1-1 Description 1-2 Chapter 2 Financial Rates 2-1 Minimums/Maximums 2-2 Tax Treatment 2-3 Investments 2-4 Residuum 2-5 Appendices A. Example Forms EWU Policy Oct 12,

2 CHAPTER 1 GENERAL 1-1. Purpose The purpose of this policy is to authorize EWU to issue charitable gift annuities Description The board of Eastern Washington University is authorized to issue charitable gift annuities (CGA s) to residents of the state of Washington pursuant to RCW 28B and is exempt from regulation by the state insurance commissioner (RCW ). The obligation to make annuity payments is not an obligation of the state nor is it a general obligation of the university (RCW28B ). The obligation to make annuity payments is secured by and limited to the assets given in exchange for the annuity and reserves established by the board. Any CGA s issued to residents outside the state of Washington will be subject to the laws of their state of residence. The CGA is a legal contract between the donor and EWU, in which EWU promises to provide annuity payments for one-life and two-life annuity agreements throughout his/her or their lives. Deferred CGA s will also be offered at this time. One hundred percent (100%) of the CGA assets shall be invested in a reserve for the lifetime of the respective annuitants to meet liabilities that result from the gift program. EWU Policy Oct 12,

3 CHAPTER 2 FINANCIAL 2-1. Rates The annuity rate offered will not exceed the American Council on Gift Annuities (ACGA) rates at These rates are designed to provide an average residuum (amount remaining for the charity when the last beneficiary has died) of 50 percent of the original contribution Minimums/Maximums The minimum age for either a one-life or a two-life CGA is 50. No physical examination is required. The minimum gift principal is $10,000, with no maximum amount Tax Treatment There are several tax consequences associated with the creation of a charitable gift annuity. Donors will always be advised to seek independent counsel. EWU will provide follow up information to aid the donor in reporting the gift to the IRS and claiming the appropriate tax deductions Investments One hundred percent (100%) of the CGA assets shall be invested in a reserve for the lifetime of the respective annuitants to meet liabilities that result from the gift program. CGA reserve funds shall be managed following the Prudent Investor Rule and the EWU Investment Policy. Funds will be managed to insure annuity payment streams through expected maturities, with projected total annual return of a minimum of 6% over the years Residuum At the termination of the CGA, the remainder goes to Eastern Washington University for the charitable purposes designated by the donor. If the donor wishes to state a specific purpose, a Memorandum of Understanding (MOU) will be completed any time prior to maturity. EWU Policy Oct 12,

4 APPENDIX A EXAMPLE FORMS REVISED: OCT 12, 2007 CGA Agreement Example Notary Example Schedule A Example EWU Policy Oct 12,

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