John (age 64) has $20,000 worth of XYZ stock, which has appreciated greatly but is only yielding a current dividend of 2%.
John donates the XYZ stock to Wheaton College in exchange for a Wheaton College Gift Annuity. John’s annuity rate (determined by his age) is 4.6%, which is more than double the amount of his current dividend. John is making a gift to Wheaton College, so the comparison to secular interest rates is not an equal comparison.
By making a gift of his XYZ stock to a Wheaton College Gift Annuity, John partially avoids or defers the capital gains taxes on the appreciated stock, receives a current income tax charitable deduction for the amount of the gift to Wheaton College, increases his income, and makes a significant gift to Wheaton College.