Investing in the Future: CGAs Offer Stability in Challenging Times

July-August 2010

By Earl Ihle, 33°, Grand Cross, Director of Development, and Matthew T. Szramoski, 33°, Associate Director of Development

Freemasonry is a fraternal organization that practices charity; we give because of what we believe. In the Scottish Rite, we practice charity in a variety of ways that include supporting RiteCare, maintaining scholarships, and preserving the history and archives of the fraternity at the House of the Temple. In today’s economy we all worry about the decrease in the net value of our investments, the effect of inflation, and other fiscal concerns. It becomes very easy to be complacent in times like these and either to reduce contributions to charity or to cease making them at all. Unfortunately, charitable needs do not decline when the economy does.

Picking the best investments in order to maintain your principal and to achieve growth is especially difficult in today’s market. Have you ever considered combining our Masonic principle of charity with the common sense principle of maximizing the rate of return on your investments? Bro. and former President Theodore Roosevelt said, “Nobody cares how much you know, until they know how much you care.” Charitable Gift Annuities offer every Scottish Rite Mason a chance to show how much they care and to earn a guaranteed, fixed-rate of return at the same time.

A charitable gift annuity is a way to make a gift to your favorite Scottish Rite charity and still receive an income for yourself or others. It is a contract between you and the Scottish Rite Foundation, Southern Jurisdiction. In exchange for your gift of cash, securities, or other valuables, the Foundation agrees to pay income to you and/or someone you designate for life, and then to give the remainder to the Scottish Rite charity you designate. The maximum number of annuitants is two. You can have payments made jointly or successively, so the payments can be made to you and your spouse, for example, or to you and then to your son or daughter. After the last annuitant passes away, the remainder of the gift is paid to the charity.

Due to the current downturn in our economy many of us are looking for ways to maximize the return on our investments. The American Council on Gift Annuities, which sets the rate of return for CGAs recently, approved slightly higher fixed rates as of April 28, 2010. What this means is that a good choice for investing your money just got better!

Payments from a charitable gift annuity are fixed from the time you make your gift. They will neither increase nor decrease, regardless of what happens to interest rates or the stock market. The Scottish Rite Foundation, Southern Jurisdiction, USA, Inc. is contractually obligated to make the payments, and its promise is backed by its assets.

A portion of the payments you receive is considered to be a partial tax-free return of the gift you made, while the contributed property becomes a part of the charity’s assets. Donors to our Charitable Gift Annuity program can name a local Scottish Rite Foundation as the remainder beneficiary of the charitable gift annuity or they can name one of the Supreme Council’s foundations.

Charitable Gift Annuities therefore provide three benefits to brethren:

1. Partial tax deductibility
2. Guaranteed rate of return
3. Ability to practice Masonic charity

Bro. Rudyard Kipling once said, “Never look backwards or you’ll fall down the stairs.” Too often we worry about what might have been instead of what could be. Together, we can demonstrate true Masonic benevolence and use our charities to help others and our fraternity.