The charitable gift annuity  is a simple mechanism that can increase income, offer both current and future tax savings, and minimize capital gains.

The charitable gift annuity is the oldest life-income-producing gift known in the United States, dating back to 1843, when what is believed to be the first charitable gift annuity was issued by the American Bible Society.

The charitable gift annuity is, at its heart, a contract between the donor and Colby. A simple one- or two-page document, the charitable gift annuity guarantees that the College will pay a fixed annual amount, for life, to one or two beneficiaries named by the donor. Colby's obligation to make these payments is backed by the full faith and assets of the institution and is not subject to investment performance.

The amount of the annual payment (the annuity) is determined by the age(s) of the beneficiary(ies) and whether one or two beneficiaries have been named. The older the beneficiary(ies) at the time of the gift, the higher the payout rate and the higher the charitable deduction. In addition, the payments received by the beneficiary(ies) may be partially tax exempt.

The income tax charitable deduction generated by this gift may be taken in the year the gift is made, and the resulting tax savings have the effect of reducing the cost of the gift. The table below shows the income tax deduction and annual payout resulting from a $25,000 one-life charitable gift annuity.*

Age	Deduction Amount	Annual Payment	Tax-free Portion
60	$7,763.25	$1,425	$715.35
65	$8,882.25	$1,500	$810
70	$9,879.50	$1,625	$950.62
75	$11,081.75	$1,775	$1,121.80
80	$12,263.50	$2,000	$1,354

At Colby you may establish a charitable gift annuity with a minimum gift of $5,000 in cash or marketable securities.

*Calculations shown here are based on the discount rate in effect on May 1, 2005. This rate fluctuates monthly and can be expected to have some effect on the amount of the charitable deduction.