FAQ about donating real estate

Frequently Asked Questions:

What is a charitable gift annuity? A charitable gift annuity is a simple two-page contract between you and the issuing charity (the Orange County Community Foundation) wherein the issuing charity agrees to provide one or two individuals with a fixed income for their lifetime. In addition to providing a guaranteed lifetime income, a charitable gift annuity also allows you to support the Family Care Foundation and its worldwide affiliates.

Who is the Orange County Community Foundation? Established in 1989, the Orange County Community Foundation is a 501(c)(3) public charity whose mission is to encourage, support and facilitate philanthropy in Orange County. The Orange County Community Foundation is governed by local community leaders. As of December 31, 2006, the Orange County Community Foundation had assets exceeding $105 million. For more information, please feel free to visit the Orange County Community Foundation web site at www.oc-cf.org. You may also obtain a free copy of the Community Foundation’s Annual Report by calling 949.553.4202.

Are charitable gift annuities secure? The charitable gift annuity payments are a general obligation of OCCF. In other words, the charitable gift annuity is backed by all of OCCF’s assets, not just by the property contributed. In order to further secure the promise to provide the fixed lifetime income, the Orange County Community Foundation will in most cases contract with a major insurance company to also financially back its charitable gift annuity promise thereby making OCCF’s charitable gift annuity program the only program in California with this double layer of financial protection. The Orange County Community Foundation is licensed and regulated by the California Department of Insurance to issue charitable gift annuities. Although regulated by the California Department of Insurance, charitable gift annuities are not insured or guaranteed by the California Insurance Guaranty Association.

What are the charitable gift annuity payout rates? Like most charities across the country, the Family Care Foundation has adopted the charitable gift annuity rates suggested by the American Council on Gift Annuities (ACGA). The charitable gift annuity rates established by the ACGA are based upon the assumption that fifty percent (50%) of the initial gift may remain for charity when the annuitant passes away. Generally, charitable gift annuity payout rates under this program can range from 4.8% to 11.3% depending upon your age. For more information about charitable gift annuities and/or the American Council on Gift Annuities, please click here (http://www.acga-web.org/).

How does this help the Family Care Foundation? A charitable gift annuity is part lifetime income and part charitable gift. The Family Care Foundation (FCF) receives whatever remains after satisfying the obligation of providing the lifetime income pursuant to the charitable gift annuity agreement.

How much income will I receive? The amount of income you can expect to receive depends upon a number of factors including your age and the fair market value of your property. The complimentary proposal will show you the income you may be able to receive under this program.

What are the tax benefits? Because a charitable gift annuity is part lifetime income and part charitable gift, you will receive a sizeable income tax deduction for the charitable gift portion. Your actual tax deduction will depend upon a number of factors including your age, the fair market value of your property and the applicable federal rate. The complimentary proposal will show you the tax deduction you may be able to receive under this program.

Do I have to sell my property? No. After reviewing your complimentary proposal, should you decide to proceed under this program, the Orange County Community Foundation will be responsible for selling the property.
Does this program work for out of State properties? Perhaps. The answer depends upon State specific regulations.

What if I still have debt on the property? The Orange County Community Foundation can accept property with some debt. In such cases, we can issue a charitable gift annuity based upon the value of your equity/ownership in the property. Although debt encumbered property can be accepted we have found that the amount of debt on the property should be limited, usually to about twenty five percent (25%) of the property’s fair market value.

Does this program apply only to rental properties? No. This program will work with any type of real property and will also work with other types of appreciated capital assets including stocks, mutual funds and or other business interests.

Can a Charitable Gift Annuity be part of a retirement plan? A charitable gift annuity is an excellent supplement to a retirement plan. Its flexibility to meet various planning needs makes it an attractive option. You may choose to receive the payments immediately, or defer them to a later date. With a deferred gift annuity, a donor benefits two ways: first, by receiving an immediate income tax charitable deduction and second, by building retirement income on a sheltered basis. A deferred payment gift annuity also allows the creation of a more significant gift because the investment has time to grow during the period income payments are deferred.

How can I learn more about establishing a Charitable Gift Annuity? To explore the opportunities and rewards of the Family Care Foundation Charitable Gift Annuity, please contact us. larryc@familycare.org The staff can provide detailed information about the foundation’s income-producing gift arrangements and funding options. They work with you to create a distinctive gift that blends your financial and personal objectives with the priorities for our organization. The result is a gift that is both personally satisfying and mutually beneficial to you and our mission.

The information on this site is presented in summary form. ALL DONORS MUST CONSULT WITH AND RELY EXCLUSIEVELY ON THEIR OWN ATTORNEYS OR OTHER FINANCIAL ADVISORS FOR TAX AND LEGAL ADVICE.