A donor can make a gift to WorldVenture and receive direct financial benefits in addition to a tax deduction. The benefits usually include lifetime income for the donor and/or the donor's spouse. Following are the three most popular options for receiving an income from giving.

1. Charitable Gift Annuity

A gift annuity is a contract between the donor and WorldVenture that provides advantages to both. The donor makes a gift and receives a regular payment for life in addition to a charitable income tax deduction in the year the gift is made. The payout on a gift annuity is based on the age of the beneficiary at the time the gift is made. The older the beneficiary, the higher the income. Charitable gift annuities may be funded with cash, securities or other property. Income may be received annually, semiannually or quarterly. The minimum amount needed to establish a gift annuity is $2,500. A charitable gift annuity may be established for one or two individuals ("one life" or "two lives").

A Charitable Gift Annuity Case Study

Mrs. Johnson, age 70, has been giving to WorldVenture for many years. Several years ago, she purchased stock that has proved to be a very successful investment, having a current value of $15,000. However, she would like to be relieved of investment responsibilities and would like to receive more income than her stock dividends provide. She is also concerned about her estate plan and would like to give a portion of her estate to WorldVenture.

A charitable gift annuity of $15,000 provides the following benefits for Mrs. Johnson :

• She will receive an annual income of $975 for life; a portion will be received tax-free.

• Mrs. Johnson will receive an income tax charitable deduction of $6,054, resulting in a current federal tax savings of approximately $2,119 in her 35 percent combined federal and state income tax bracket.

• Mrs. Johnson originally paid $5,000 for the stock. If she sells the stock, capital gains tax will be payable on $10,000. Because of the unique provisions of the gift annuity, capital gains tax is only payable on approximately 60 percent of her gain, and this amount can be prorated over her life expectancy.

• The charitable gift annuity is not part of Mrs. Johnson's estate, thus avoiding estate tax and probate costs.

• Probably most important, Mrs. Smith has the satisfaction of knowing that, even while she is living, she is able to make a substantial gift to help secure the financial future of WorldVenture.

2. Deferred Gift Annuity

A deferred charitable gift annuity is similar to a charitable gift annuity, except that the payments are deferred to begin at a future date. The donor receives a substantial charitable income tax deduction in the year the gift is made. A deferred gift annuity is an excellent way for younger donors to make a gift and receive a charitable income tax deduction while providing income for the future. The minimum amount needed to establish a deferred gift annuity is $5,000. A deferred gift annuity may be for one or two individuals ("one life" or "two lives").

3. Charitable Remainder Trust

A charitable remainder trust provides lifetime income and a charitable income tax deduction. The donor may select the payout rate, usually between 5 and 9 percent. The higher the payout rate, the lower the charitable income tax deduction. The donor, or the donor and spouse, receive their income quarterly, semiannually or annually for life or for a period of up to 20 years. The minimum gift for establishing a charitable remainder trust is $50,000.

Charitable remainder trusts are available in two basic versions: the annuity trust and the unitrust.

Annuity Trust and Unitrust Benefits

• An annuity trust pays a fixed dollar amount every year regardless of the trust's investment performance. Annual income is fixed for life.

• A unitrust pays a predetermined percentage of the fair market value of the trust's assets as revalued annually. Annual income is variable and may go up or down, depending the value of the trust.

• Capital gains taxes are avoided on transfers of appreciated assets.

• Estate taxes may be avoided or reduced.

A Charitable Remainder Unitrust Case Study

Mr. and Mrs. Richards, both 64 years of age, are looking forward to retirement. They have been very successful in their real estate investments and own one of their properties free and clear. The property was purchased for $80,000 in 1965, and currently has an appraised value of $240,000.

While Mr. and Mrs. Richards believe the property is an excellent investment, it does not meet their retirement income needs. After considering several ideas for the property, Mr. and Mrs. Richards decided that a charitable remainder unitrust, paying 8 percent of the trust value each year, would help them meet their immediate and long-range financial goals.

Their benefits will be as follows:

• Mr. and Mrs. Richards receive 8 percent of the trust assets as valued annually.

• In addition, they will be entitled to a federal income tax charitable deduction in the amount of $44,606 that they may use to help offset the gain on sale of another property.

• Since Mr. and Mrs. Richards are transferring the property prior to retirement (while their income is higher), they are able to utilize the full charitable deduction and save income taxes of nearly $15,612 over three years in their 35 percent combined federal and state tax bracket.

• Mr. and Mrs. Richards pay no capital gains tax on the transfer of the property to the trust. Had they sold the property, with their cost basis of $80,000, they would have had to pay capital gains tax on $160,000.

• Mr. and Mrs. Richards also are satisfied that they have provided a hedge against inflation, as their income will increase if the value of the trust increases in the future.

• The Richards also receive great satisfaction in knowing the property that they have accumulated during their lifetimes will eventually be used to help meet the goals and objectives of WorldVenture.