adapted from Spring, 1999 newsletter article
Founder Donates First Charitable Gift Annuity to Conservancy
Earl Larson, one of the original seven founders of the Little Traverse Conservancy , recently added another first for our organization. He became the first donor to utilize our newly established Charitable Gift Annuity program.
Earl and his wife, Barbara, reside in Beaufort, South Carolina, but are well known to many in the Harbor Springs and Petoskey area. Earl at one time owned Woodland Motors, the local Chrysler Plymouth dealership now owned by Brown Motors. Later he owned and operated the Birchwood Inn north of Harbor Springs.
Earl asked that this gift be “in memory of some Harbor Springs people who came to my financial rescue back in the 1960s and to whom I will always be indebted.” They include John H. Bond, Jean Everest, Susan B. Fisher, J. Luke Hoffman, Charles Hollerith, Sr., and Wrigley Offield.
A Charitable Gift Annuity is very much like an annuity that can be purchased from an insurance or investment company. With a minimum of $25,000, the Conservancy will pay a fixed percent for life to an individual or couple. The annuity payment rate is based on the age or ages of the recipients, and payments are made semi-annually. The donors are allowed to take a federal tax deduction based on their ages and the type of asset donated. Upon their deaths, the Conservancy will transfer the remainder of the original gift to its Endowment Fund or use it for any programs designated by the donors.
For example, Fred and Beth Smith wish to establish a $50,000 Charitable Gift Annuity with the Conservancy with the remainder transferred to the Endowment Fund upon their deaths. Fred and Beth are both 70 years old, and using the rate formula established by the American Council on Gift Annuities, the Conservancy would agree to pay them $3,400 each year (6.8 percent of the original gift) for the rest of their lives. They would also receive an immediate federal charitable deduction of about $20,000 based on their gift and would remove $50,000 from future estate tax calculations.
Charitable Gift Annuities are easy to establish because they are a simple contract between the donor and the Conservancy. They do not have the legal expenses and annual management costs associated with other planned giving alternatives such as Charitable Remainder Trusts.
According to Earl, there is another important reason to use a Charitable Remainder Trust. "I set up the trust individually, but it covers my wife. It something happens to me, she will continue to receive the interest benefit."
Our thanks to Earl for his generous donation to the Conservancy and for kicking off this new planned giving option. His foresight, both today and 34 years ago when land protection was a relatively new idea, has helped the Conservancy become one of the largest regional land trusts in the country.