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Charitable Gift Annuities

A gift annuity is an agreement between the Garden and a generous donor.

The donor makes a contribution in exchange for the Garden’s promise to pay one or two annuitants a fixed income for life. The donor may contribute cash or securities to establish the gift annuity. He or she receives an income tax deduction in the year of the gift, which can be carried forward for five more years. Payments to the beneficiaries—which may begin immediately or which may be deferred (see below)—are made quarterly for life.

Gift funds remaining after the death of the last annuitant will be used by the Garden for purposes specified by the donor at the time of the gift.  Additional gifts require the establishment of separate gift annuity agreements.

Case study: Establishing a charitable gift annuity

Lawrence Hamilton, 78, and his wife, Sarah, 77, want to make a gift that will provide them with a steady income, while also supporting the Garden. Hamilton, who grew up visiting the Garden and spent a successful career as a Botanist with the EPA, knows the value of living collections and wants to support the Garden’s conservation efforts. The Hamiltons hold stock worth $100,000 which they acquired several years ago for $40,000. The stock has been yielding two percent ($2,000) per year.

The Hamiltons decide to transfer the stock to the Garden in exchange for a gift annuity to be paid them by the Institute. They will begin receiving an annual income of $7,100, based on the two-life annuity rate for their age bracket of 7.1 percent. A portion of the annuity payment is tax-free, and a portion is reportable as tax-favored capital gains income. The balance of their annuity income is taxed as ordinary income.

By establishing a gift annuity, the Hamiltons have—

  • provided income stability for the conservation program at the Garden;
  • increased their annual income from this asset more than threefold;
  • reduced their capital gains taxes; and

received an immediate federal income tax deduction of approximately $41,415.

The Santa Barbara Botanic Garden fosters the conservation of California's native plants through
our gardens, research and education, and serves as a role model of sustainable practices