Performances + Events A gift that pays you back—now with higher rates!
Our organization offers the suggested maximum annuity rates published by the American Council on Gift Annuities (ACGA). The ACGA announced it would be increasing its suggested maximum annuity rates, effective July 1, 2022. For most gift annuities, the new rates are 0.4% - 0.6% higher than the rates they replace.
Samples of Increased Annuity Rates
The figures in the table below show how the new rates and resulting charitable deductions for a $10,000 immediate payment gift annuity will differ from the June 2022 rates and deductions over a range of common annuitant ages.
Comparison of Old and New ACGA Rates
| Age(s) | June 2022 Annuity |
February 2022 Deduction |
New Annuity | New Deduction |
|---|---|---|---|---|
|
65 |
$420 |
$3,705 |
$480 |
$4,051 |
|
75 |
$540 |
$4,663 |
$600 |
$4,818 |
|
85 |
$760 |
$5,617 |
$810 |
$5,720 |
|
65/65 |
$380 |
$2,854 |
$430 |
$3,480 |
|
75/75 |
$460 |
$4,011 |
$520 |
$4,196 |
|
85/85 |
$650 |
$4,823 |
$690 |
$5,030 |
Ordinarily, you would expect a higher annuity rate to result in a lower charitable deduction. However, you can see that the new deductions available in July 2022 will be higher than they were in February 2022, despite the higher ACGA rates. This is because over these months there has been a spike in the interest rate used to compute gift annuity deductions. However, the recent spike in this interest rate does have a negative effect, too. It has reduced the total tax-free portion of annuity payments by the same amount that it has increased the deduction.
Deferred Gift Annuity Rates Will Increase More than Immediate Annuity Rates
The figures in the table below show how the ACGA suggested rate for a deferred gift annuity will change as the deferral period changes under the new schedule. The annuity amounts are based on a $10,000 gift.
Old Deferred Annuity Rates vs. New Deferred Annuity Rates
| Age at Gift | Years of Deferral | June 2022 Annuity | New Annuity | Amount Increase | Annuity % Increase |
|---|---|---|---|---|---|
|
60 |
5 |
$480 |
$570 |
$90 |
0.9% |
|
60 |
10 |
$610 |
$740 |
$120 |
1.3% |
|
60 |
15 |
$810 |
$1,000 |
$190 |
1.9% |
Conclusion
The ACGA suggested maximum annuity rates for immediate payment gift annuities will increase moderately at all ages, effective July 1, 2022. ACGA rates for deferred gift annuities will increase more significantly. The longer the deferral period, the greater the increase. The recent spike in the interest rate means that deductions for gift annuities paying the increased ACGA rates will still be higher than they were just a few months ago. The combination of higher annuity rates and higher deductions make gift annuities more attractive than they have been in a long time.
Additional Giving Options
By making a planned gift, you can strengthen NEC and gain financial and tax benefits for you and your family. For more information, please contact Aaron McGarry, Planned Giving Officer, by email or by phone at 617-585-1356.
Real estate can be contributed as an outright gift or to finance a planned gift. Available options include a retained life estate, which allows the donor to continue to use the property for a certain number of years, or for the donor’s lifetime. Other arrangements offer special tax advantages and lifetime income.
Gifts of real estate include undeveloped land, a residence, a vacation home, a farm, or commercial property. NEC requires the donor to bear certain costs when making a real estate gift, such as an appraisal to determine the fair market value. Also, NEC deducts transaction costs from the proceeds of the sale of the property, including the closing costs, title insurance, a survey (if needed), and any taxes due before the gift is completed.
For any questions about gifts of real estate, please contact Abigail Smitka, Assistant Vice President of Major Gifts and Campaigns, at as3628@necmusic.edu or (617) 585-1719.
Many companies support the philanthropic interests of their employees by matching employee contributions to nonprofit organizations like NEC. If your employer offers a matching gift program, you may be able to double or even triple your gift!
For more information on matching gift contributions, please contact Cheryl Fries, Assistant Director of Advancement Operations, at cheryl.fries@necmusic.edu or (617) 585-1373.
Gifts of personal property, such as musical instruments, recordings, and scores provide valuable support for our music education programs. Through the support of in-kind gifts, you can help NEC meet the college’s ongoing need to expand its inventory — and you qualify for a tax deduction.
NEC accepts in-kind donations on a case-by-case basis. For more information, please contact Patricia Kopko, Director of Advancement Operations, by email or phone at 617-585-1225
Friends of NEC may elect to make gifts to commemorate a loved one’s life, birthday, anniversary, or other special occasion. We will gladly notify those you wish to know of any gifts made in their honor.
Contributions in any amount may be directed to The NEC Fund, or to the area of your choice. Please note the name of the person you wish to commemorate when you make your gift.
Contact Us
To learn more about how you can support NEC, please contact Cheryl Fries, Assistant Director of Advancement Operations, at cheryl.fries@necmusic.edu or (617) 585-1373.
New England Conservatory is a 501(c)3 non-profit organization. All donations are tax deductible to the full extent of the law. Our non-profit tax ID is 23-7225104.
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