Wycliffe Foundation Blog

By Steve Davis, Director of Gift Planning, Wycliffe Foundation

Many people today are struggling. They are struggling with the decline in value of some of their assets, such as certificates of deposit earning 1 to 2% interest, or a decline in the market value of their portfolio and decreasing dividends.

Additionally, many individuals face uncertainty about what their future needs will be. They may hesitate to use some of their assets to make a gift that will impact the work of Bible translation, for fear that additional income may be needed at some future point. So they wait.

Someone once said that “waiting will cost you,” and that is often true. If you wait to buy a car, it may cost you more. However, in exchange for some flexibility and a willingness to wait, a flexible deferred  charitable gift annuity can actually provide you with more income for the future.

The concept

A charitable gift annuity (CGA) is one of the most popular gift-planning tools people use to support Bible translation and serves as an agreement between Wycliffe Foundation and a financial partner.

With a CGA, you can make a gift of cash or marketable securities and receive fixed payments for life at attractive rates by transferring some type of asset to Wycliffe. In return, you receive an income stream for the rest of your life, or two lives in some cases. At the end of those lives, the remainder of the gift will support the work of Bible translation.

A deferred gift annuity defers the income stream until some point in the future. The value in waiting results in a larger payment—one that is fixed and won’t be influenced by market conditions.

The flexible deferred charitable gift annuity simply adds one more component: In exchange for a degree of flexibility, you can select the payment to start at one rate and increase that to higher fixed rate at a later date. In essence, you can defer your payment twice, providing a larger annuity payment and more income over a lifetime than if it was established now.

 The benefits

• Gift and tax deduction
• Tax-free income
• Value grows tax-free till payout
• Flexibility
• Gift to Wycliffe now
• Secure source of future income

 The impact

• Peace of mind
• Impact future of Bible translation
• Replace your giving upon death
• Taxes reduced or eliminated

Here’s an illustration of the concept:

Mr. and Mrs. John Smith, ages 65 and 64, would like to have the option of establishing a future retirement income. They are uncertain about when they will need this. They would like to begin to lock in a fixed rate now, just in case the value of their assets declines.

 The Smiths decide to transfer $100,000 cash to Wycliffe Foundation to establish a flexible deferred charitable gift annuity. They select the target date as John’s 70^th birthday. The deferred rate is 6.4%, and their payment will be $6,400 per year.

 As a result, the Smiths will receive a charitable income tax deduction of $28,972.16. Their annuity contract allows them the flexibility of starting to receive their payments anytime between ages 70 and 80. If they decide to wait until John is 80, their rate will be 11.4% and their annual payment will be $11,400. If they select the latter option, their tax-free income may increase as well.

By Jeff Lydenberg, Guest columnist

Many of you are supporting aging parents, dependent children, or Wycliffe missionaries. There is a tax-efficient way to continue to meet financial obligations to those and others so important to you, and impact the work of Bible translation.

A charitable gift annuity (CGA) is a simple contract; in exchange for a contribution of cash or an appreciated asset, Wycliffe Foundation commits to making fixed payments for life to one or two named beneficiaries. The amount of those fixed payments is based on the age of the annuitants—the older the annuitant is, the higher the payments will be.

You can establish a CGA for the benefit of a relative, friend or Wycliffe missionary. If you establish a gift annuity and name any of these as a beneficiary, their payments will be partially tax-free.

Wycliffe Foundation invests and manages the contribution, and when the last annuitant has died, the remainder of the contribution is used to advance the mission of Bible translation, linguistics training, and literacy efforts. A gift annuity is safe and secure legal contract backed by the full resources of Wycliffe.

As the donor, you are entitled to a charitable deduction for the gift portion of the contribution. Payments to the annuitant are partially tax-free, and if long-term appreciated securities are used to fund the annuity, tax on any capital gain is reduced. You may also be able to avoid any gift tax consequences.

Editor’s note: Jeff Lydenberg serves as vice president of consulting for PG Calc, and works with nonprofit organizations on gift-planning needs. He is a frequent speaker at local, regional and national planned-giving events and is a member of the Greater Cincinnati Planned Giving Council.

Thirty years ago, Robert Bugenhagen set off on an adventure. As a trained linguist, Robert planned to help translate Scripture in Papua New Guinea, a nation where more than 700 languages are spoken.

At the time, Robert’s parents, Roger and Shirley, of Annapolis, Md., were skeptical of their son’s plans. They thought he would probably return to the U.S. in a few years, perhaps disillusioned by the enormous task he had undertaken.

Robert stayed in Papua New Guinea much longer than his parents anticipated. It was where he met his wife, a Finnish nurse named Salme. The couple, based on Umboi Island, has since helped translate the Bible into two minority languages and is now working on a third.

"It was really quite moving to hear how the people really appreciated having the Bible."

His son’s lifelong devotion to Bible translation has shaped Roger’s financial goals.

The senior Bugenhagen wants to support his son’s work—mostly because Robert is his son, but also because Roger has seen the effect that a new Bible translation has in the hearts of those receiving it for the first time.

Roger first realized the impact of his son’s work when his son’s team hosted a ceremony in their village to celebrate the completion of a Scripture translation.

“They had a video tape at the time that I saw, and it was really quite moving to see how the people really appreciated having the Bible,” Roger shared.

Roger, who became a widower when Shirley died in 2000, began to think about how to incorporate Wycliffe into his estate.

During his career at the U.S. Census Bureau, from where he retired as assistant director of economic programs, Roger had learned the importance of sound investments. As he began looking at his assets, he decided to make some changes.

“I was trying to lessen my exposure to the stock market, I was looking for some alternatives, and I had read something about charitable gift annuities, and I decided to explore that directly with Wycliffe,” Roger said.

Roger eventually established two charitable gift annuities through Wycliffe Foundation. With these charitable gift annuities, he made a gift of cash and now receives fixed payments for life.

“It worked out very well for me in several aspects because I donated appreciated stock, which is transferred,” Roger said. “By not selling it, I save myself a lot of capital gains taxes.”

“The income from my annuity was far greater than I was receiving in dividends from the stock,” Roger explained.

Upon Roger’s passing, the remainder of the CGA will benefit his son and daughter-in-law. This decision was an easy one for Robert.

“As they get older, a lot of their support that they’ve gained over the years has dissipated,” Roger said. “People die off, so it’s not an easy situation. So I felt really good that this would probably help them in their later years. I’ve seen the work, I’ve seen the results of the work, and I’m able to support them.”

Steve Davis and Rachel Tidwell discuss Charitable Gift Annuities.