Stelter’s senior gift planning consultant, Lynn M. Gaumer, J.D., is back to give you an update on the new schedule of CGA rates.
The American Council on Gift Annuities has released a new schedule of suggested maximum gift annuity rates for gifts established on or after January 1, 2024. On average, rates will increase approximately 0.4% depending on the age of the annuitant.
The table below shows selected current and new comparative rates. A more complete listing of the current and new rates can be found here. If you are interested in learning more about how the ACGA sets rates and the basic assumptions that go into the rates, you can view a video from David G. Ely, CFA, VP of Rates & Regulations for the ACGA.
Your Donors Will Benefit: An Illustration
Under the current rate schedule, Barbara, 80, transfers $25,000 in exchange for a charitable gift annuity. She will receive annual payments of $1,900, a rate of 7.6%. Instead, if Barbara waits to make her gift on or after the new rate schedule is in place on Jan. 1, the same gift amount will provide $2,025 in annual payments, reflecting a 8.1% rate.
Two Years Running: And the Best Planned Gift of 2024 Goes to….
Earlier this year, I presented the CGA with my best planned gift award for 2023. You can read about it in my blog or listen to my Oscar-themed webinar. Given the three rate increases in the last 18 months, 2024 is shaping up to be another great year for gift annuities. In addition, your donor has options on how they would like to fund their gift annuity. They can use traditional assets such as cash or appreciated securities or, if they are 70½ or older, give through their IRA by making a one-time election of up to $53,000.
If your organization does not offer CGAs, now is the time to look into either creating a CGA program or working with a third party to offer them. The National Gift Annuity Foundation is an excellent resource that can help your organization minimize risk and easily offer CGAs by working with a third party.
Stelter Is Here to Help You Prepare
We recommend you begin creating a strategic marketing plan for 2024 that highlights the many benefits of CGAs. To assist you with this, we are providing a letter that you can customize and use for your donor communications. Download it by clicking the button below.
[…] gift annuities. Rates on CGAs are the highest they’ve been in 16 years, making CGAs a popular choice, at least for the first half of the year. Higher rates mean more […]
[…] New, higher payouts mean donors get more in return. CGA rates went up Jan. 1, the highest they’ve been in 16 years. […]