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Life Income Gifts – Gifts that give back


Gifts that give back to the donor are called Life Income Gifts. They may range in size from very small gifts to multi-million dollar trusts.
Do you want to make a sizable gift to AU during your lifetime and increase your personal income?

Many of us make gifts to Anderson University throughout our lifetime, using the financial resources we have available to us. At some time in our lives, we may hope to make a more sizable gift, but believe that to do so today might make it difficult to maintain our current level of income. You may be able to accomplish both these things - and even possibly increase your annual cash flow - by making a Life Income Gift.

What is a Life Income Gift?

With careful planning and use of a "Life-Income Gift" you can make a significant gift now and generate income for yourself or another beneficiary. Here is how it works:
  • You make a gift of cash, securities, real estate or some other asset
  • The gift generates a substantial income tax deduction that saves you taxes right now
  • You or your designated beneficiary receive an income based on the value of the gift for life (or for an agreed upon term in some cases)
  • Anderson University receives a significant that otherwise might not have been possible

What are the benefits of a life income gift?

Benefit to AU: We ultimately receive a larger gift than may otherwise have been possible.
Benefit to the Donor: 
  1. You are able to make a more significant gift to AU during your lifetime.
  2. You are able to maintain or even increase your current income.
  3. You have the satisfaction of knowing you are greatly impacting the lives of AU students.
Tax Implications: 
  1. You receive a tax deduction for the value of the charitable portion of your gift, based on your life expectancy.
  2. You can bypass the penalty of capital gains tax on the later sale of appreciated property.
  3. You realize gift and estate tax savings and probate cost savings.
Examples: 
  • Charitable Remainder Unitrusts
  • Charitable Remainder Annuity Trusts
  • Charitable Gift Annuities
  • Deferred Payment Gift Annuities


Will you tell me a little about trusts?

Some of us are new to the discussion of trusts. Here is some preliminary information that might be useful.

What is a trust?

A trust is simply an agreement between two parties that assets place in the trust will be managed and distributed according to the terms set out in the trust document.
  • The person creating the trust is called the "settlor."
  • The person accepting responsibility for carrying out the trust terms is the "trustee."
  • Trusts can be established for a variety of purposes.
  • Charitable Remainder Trusts provide life income for trust beneficiaries after which remaining trust assets to the charity.
Tell me more about the two types of charitable trusts.

There are two types of Charitable Remainder Trusts:

Charitable Remainder Trusts (CRTs) provide lifetime payments to beneficiaries that can either be fixed or variable.
  • A Charitable Remainder Annuity Trust (CRAT) provides fixed income.
  • A Charitable Remainder Unitrust (CRUT) provides income that changes based on the changing value of the trust assets. This may provide a hedge against inflation.

The trusts are the same in that:

  • You/designee receive current income
  • You receive a income tax deduction for the charitable portion of your gift, based on your life expectancy.
  • You avoid taxes on capital gains on the sale of the appreciated securities or real estate.
  • You reduce potential estate taxes.

The main difference between the two trusts listed above is the way your annual income from the trust is determined.

Charitable Remainder Annuity Trust Charitable Remainder Unitrust
  1. An annual payout amount is determined when the trust is established based on its original value.
  2. Beneficiaries receive the same annual payout rate for life.
  3. After the death of the beneficiaries the remaining trust assets are given to Anderson University.
  1. An annual income payout is made based upon a fixed percentage determined when the trust is established. 
  2. Beneficiaries receive a variable payout from year to year, for life.
  3. After your death, the remaining trust assets are given to Anderson University.  


Will you tell me a little about annuities?

Many people have used annuities in their financial planning. Commercial annuities are issued by financial institutions and are a source of either fixed or variable income.

Charitable gift annuities utilize these same principles to enable donors to make substantial gifts and retain a source of income. They combine elements of "gifting" with elements of "a purchase" of an annuity to create a vehicle that produces a charitable income tax deduction and a continuing source of income. You are entitled to a deduction because the cost of a comparable commercial annuity is less than the amount you contribute for a charitable gift annuity.

Tell me more about the two types of charitable gift annuities.

Anderson University can offer two types of gift annuities - Immediate Charitable Gift Annuities and Deferred Charitable Gift Annuities.

  • Both are easy to create.
  • Both can be established for a contribution of $5,000 or more.
  • A Gift Annuity is a contract between you and the university.
  • The annual payment is guaranteed and backed by all of the assets of the university.
  • In exchange for that, we guarantee to pay you (or a beneficiary that you designate) a fixed amount of money for life.
  • You will receive tax deductions for the value of the charitable portion of your gift.
  • A portion of the payments will be tax-free.
  • You have the satisfaction of knowing you have made a sizable gift to AU during your lifetime.
Immediate Charitable Gift Annuities Deferred Payment Gift Annuities
1. You establish a contract with Anderson University in which you transfer an asset (cash, securities, etc.) to us.

2. We agree to pay you (or your designee) an agreed upon/fixed amount of money for life.

3. You / or your designee will receive the same fixed payment beginning immediately.

4. A portion of your gift qualifies for an income tax deduction.

5. Some of the payments you / or your designee receive will be tax-free.

6. Income payments begin when the contract is established and the asset is transferred.

1. You establish a contract with Anderson University in which you transfer an asset (cash, securities, etc.) to us.

2. We agree to pay you / or your designee an agreed upon/fixed amount of money.

3. You / or your designee will receive the same fixed payment beginning at a pre-designated future date.

4. A portion of your gift qualifies for an income tax deduction.

5. Some of the payments you / or your designee receive will come to you tax-free.

6. Income payments are deferred until a future date of your choice. Many people elect to have the payments begin when they retire.


I am interested in talking with someone about Life Income Gift opportunities.

As you can see, these gift options are creative, and can benefit both you and Anderson University. To someone reading this for the first time, it may feel overwhelming. To others, it may appear to meet a financial planning need. If you are interested in learning more about these creative gift options, send us a message about Life Income Gifts, or phone our office at (800) 421-1025.

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