Alumni Example of Immediate Gift Annuities

Elizabeth Sundberg ’47

Elizabeth wanted to make a substantial gift to Whitman College, but she worried about giving up income-producing assets. She decided to donate the proceeds from a matured CD to establish a gift annuity that pays her 8.9 percent and has an immediate tax deduction. Perhaps more important, she receives a guaranteed annual income for the rest of her life, and because she has given cash, much of the payments to her will be considered tax free. At the end of her life the value of her gift annuity will be used to enhance Whitman’s educational program.

Talcott ’32 and Callista Ostrander

Since 1993, Talcott and Callista Ostrander have made annual planned gifts to Whitman establishing a new gift annuity each year. These gifts pay a fixed income to the Ostranders for their lives and ultimately pass the remaining value to the college. Over the last 14 years, the Ostranders have established a portfolio of planned gifts. As the Ostranders continued creating gift annuities annually, they eventually reached a point that the interest paid by the annuities was greater than the principal needed to create each subsequent annual gift annuity. Now their portfolio of planned gifts can actually fund each succeeding gift from the interest produced alone. "We can continue to give to the college at this point without taking away from our heirs," commented Talcott. "The interest paid each year by the college is just returned to a new gift annuity." If the Ostranders do not need the income produced from the portfolio of planned gifts in the future, the gift annuity portfolio can continue to grow on its own and generate charitable tax deductions for the Ostranders.