It combines the gifts of all the donors into a single portfolio. Each year the donors receive a proportionate share of the fund's income. Highly appreciated securities are often gifted to the University because the capital gains tax can be avoided. A gift annuity is a contract between a donor and Ohio Northern. The rate is based solely on age.
Annuities can be for one or two lives.
A deferred annuity allows young donors to make a gift or a series of gifts while they have high current income. Pamela and Brent B., both age 40, are graduates of the College of Law and are partners in a law firm. Payments are to begin upon their retirement in 25 years and are for their lives. Upon the death of the first, the second will continue to receive the same payment. A percentage of each annuity payment will be a tax-free return of principal.