Charity Linc 2

Welcome!
LBL6471
For Educational Purposes Only

Copyright The Financial Engineering Alliance, LLC 2002. All Rights Reserved
The CharitableCapitalSM Design

Center
A DIVISION OF THE FINANCIAL ENGINERING ALLIANCE, LLC
Present
CharityLincSM
A Gift Annuity Program
For Charitable Organizations
CharitableCapitalSM Design Center, a division of The Financial Engineering Alliance, LLC and Lincoln
Benefit Life do not provide legal or tax advice, and nothing herein should be construed to be legal or
tax advice. There is no direct affiliation between The Financial Engineering Alliance, LLC and Lincoln
Benefit Life. A charitable gift annuity is not guaranteed by any government agency. A charitable gift
annuity is subject to limited regulation in most states, and is not issued by an insurance company.
The content of this presentation is for educational purposes only.
LBL6471

What Is a Gift Annuity?

A contractual
arrangement between
your donor and your
charity
Your donor makes an
irrevocable gift of cash
or securities

In exchange your
donor receives
guaranteed payments
for life with the
remaining values
benefiting your charity

Your charity:
Issues the gift annuity
agreement,
Sells, if necessary, the
assets gifted, and,
Places the assets into a
separate gift annuity
account.

Your charity then:
Manages the investments,
audits the account and
makes the payments to
your donor and/or another
annuitant, whom your
donor selects, for life.

It generates a lifetime
payout to the annuitant
based upon an attractive
payment schedule using
specific rates issued by the
American Council of Gift
Annuities (ACGA)

It can be funded with
as little as $10,000
Payments are
calculated and paid at
a fixed rate and made
continually for the rest
of your donors or
annuitants life
Why is CharityLinc Unique?

Reinsurance!
It provides your charity the opportunity to
reinsure their payout obligation so that the
remainder of your donors gift, net of the
reinsurance premium, can be used by your
charity immediately.
Why is CharityLinc Unique?

The payment obligation is reinsured for your
organization with a single premium immediate
annuity (SPIA) issued by Lincoln Benefit Life
(LBL).
Your organization receives periodic annuity
payments from LBL and then makes the
stipulated payments directly to your donor
10
What is Reinsurance?
The purchase of a SPIA by your charity from
LBL.
The SPIA guarantees that the lifetime periodic
payments which your charity has obligated
itself through a charitable gift annuity (CGA)
agreement will be paid directly to your charity
on the same periodic basis as the obligated
payments to the CGA annuitant until the
annuitants death.
11
What is Reinsurance?
The remainder of your donors gift the
difference between the total gift amount and
the SPIA premium can be used
immediately for charitable purposes or
invested for future use.
12
Why Reinsure?
Regulations require a
charitable organization
which self insures a
CGA to reserve 100%
of the risk effectively
delaying the use of the
remainder of the
original amount
contributed until the
death of the annuitant.
13
Why Reinsure?
However, should 100% of
the CGA risk be
reinsured with an
authorized insurance
company no reserves
are required!
The balance of the gift
(net of the reinsurance
premium) is available for
use immediately!
14
A Lifetime Payout
- Tax Advantaged Annuitant
Age
Payout
Rate 1
Tax-Free
Portion 2
Effective
Payout Rate3
65
6.0%
54.98%
6.61%
70
6.5%
57.98%
7.35%
75
7.1%
67.55%
8.25%
80
8.0%
72.54%
9.55%
Based on single annuitant charitable gift annuity and ACGA rates effective 7/1/2003. Subject to change.
Based on 4.2% Federal Mid-Term Rate (subject to change monthly), annuity exclusion ratio and annual payments. Once the donors basis has been recovered,
further annuity payments are fully taxable.
3
Assumes a 27% tax bracket.
1
2
15
Gift Annuity Benefits

Secure
Your donor will receive guaranteed payments
for life, which will not change regardless of
future interest rate, or stock market
fluctuations.
Your charity can reinsure your clients payout
guarantee with a SPIA provided by LBL.
16

High Payout Rate
The gift annuity payments may be
considerably more than the income your
donor is presently receiving from CDs or
other investments.
17

Tax Advantaged
Your donor will receive an income tax
deduction in the year of the gift. Part of your
donors annual payout may be tax-free.
A gift of appreciated property will avoid capital
gain taxation on the gift portion of the
contribution with the remaining capital gain tax
spread over the life expectancy of the
annuitant(s).*
* If donor is not the annuitant, the capital gain tax cannot be spread out over the donors life expectancy.
18

Can Provide for Others
A gift annuity can be designed to make
payments to either one or two individuals for
life. Your donor may wish to include their
spouse, special needs child, a parent or
special friend.
Most of the tax benefits belong to the donor
even if someone else is named to receive the
lifetime payments.*
* Payout may be subject to a gift tax but will qualify for annual gift tax exclusion as a gift of present interest at time of distribution.
19
Supplemental Income
Payments
Beth, age 75, is frustrated by the renewal rates
of her bank CDs. Beth uses $100,000 of her
maturing CDs to establish an immediate gift
annuity with a charity.
In doing so, Beth will generate an annual
lifetime payout of $7,1001, (over $4,7002 will
be tax-free) as well as an income tax
deduction of over $42,0003.
1,2,3
Footnotes are on next slide.
20
Supplemental Income
Payments
Your charity can reinsure her payout
guarantee, allowing the remainder of
her gift to be used by your charity
immediately.
Based on a single annuitant charitable gift annuity and ACGA rates effective 7/1/2003. Subject to change.
Assumes a 27% tax bracket. Annuity exclusion ratio. Annuity payments are part return of principal (non-taxable), part capital gain, if any and part ordinary income.
Once principal is recovered and/or capital gains are paid, remaining annuity payments then become fully taxable as ordinary income.
3
This deduction may be spread over more than one year. Any amount exceeding 30% (50% if cash) of donors AGI per year must be carried forward (for a maximum
of 5 years). Assumes a 4.2% Federal Mid-Term rate (subject to change monthly) and annual payments.
1
2
21
Supplemental Income
Payments
Gift Amount
Annuity Payout Rate 1
$100,000
7.1%
Tax-Free Payments 2
$4,796
Effective Payout Rate 2
8.25%
Total Annual Payments 1
$7,100
Tax Deduction 3
Income Tax Savings 2,3
$42,445
$11,460
Assumes a 27% tax bracket. Annuity exclusion ratio. Annuity payments are part return of principal (non-taxable), part capital gain, if any and part ordinary
income. Once principal is recovered and/or capital gains are paid, remaining annuity payments then become fully taxable as ordinary income.
3
This deduction may be spread over more than one year. Any amount exceeding 30% (50% if cash) of donors AGI per year must be carried forward (for a
maximum of 5 years). Assumes a 4.2% Federal Mid-Term rate (subject to change monthly) and annual payments.
1
2
22
Contributing Appreciated
Assets
Joe, age 75, purchased $75,000 worth of
publicly traded stock in 1989. Over time the
stock value has increased to $100,000 but
generates less than 3% annually in dividends.
Joe is frustrated with this but feels trapped by
the $12,0004 in capital gain taxes he would
owe if he liquidated the stock.
However, Joe can contribute his stock into a gift
annuity with your charity . . . .
23
Assets
. . . In doing so, Joe will reduce his capital gain
tax liability to $6,9124 spreading that amount
over the next 12 years4 ($576 per year), while
generating a tax deduction of over $42,0003
as well as an annual lifetime payout of
$7,1001, 2
3
This deduction may be spread over more than one year. Any amount exceeding 30% (50% if cash) of donors AGI per year must be carried forward (for a maximum
of 5 years). Assumes a 4.2% Federal Mid-Term rate (subject to change monthly) and annual payments.
4
Assumes 15% long term capital gain rate. Capital gain may be spread over the time period the annuity is expected to be received based on the life expectancy of
annuitant age 75 (12 years). If donor is not the annuitant, the capital gain tax cannot be spread out over the donors life expectancy.
1
2
24
Assets (Summary)
Gift Amount
$100,000
Cost Basis
$20,000
Lifetime Payout Rate1
7.1%
Total Annual Payments2

Tax-Free
$7,100
$959
Taxable as Ordinary Income
$2,304
Taxable as LT Capital Gain4
$3,837
Tax Deduction3
Capital Gain Tax Savings2, 4
$42,445
$5,088
3
4
Assumes 15% long term capital gain rate. Capital gain may be spread over the time period the annuity is expected to be received based on the life expectancy
of annuitant age 75 (12 years). If donor is not the annuitant, the capital gain tax cannot be spread out over the donors life expectancy.
1
2
25
Supplemental Income
Examples
Donor: Joan, Age 65
Gift Amount
Joe, Age 60
$100,000
$100,000
6.0%
5.7%
Tax-Free Payments3
$3,479
$3,088
Total Annual Payments
$6,000
$5,700
Effective Payout Rate3
6.61%
6.14%
$32,160
$26,804
$8,683
$7,237
Est. Reinsurance Outlay4
$90,000
$89,000
Net Cash to Charity
$10,000
$11,000
Annuity Rate1
Tax Deduction2
Income Tax Savings2,3
This deduction may be spread over more than one year. Any amount exceeding 30% (50% if cash) of donors AGI per year must be carried forward (for a maximum of
5 years). Assumes a 4.2% Federal Mid-Term rate (subject to change monthly) and annual payments.
3
4
The amount varies by age, sex and current interest rates. Subject to change.
1
2
26
Supplemental Income
Examples
Donor: Betty, Age 75
Gift Amount
John, Age 70
$100,000
$100,000
7.1%
6.5%
Tax-Free Payments3
$4,796
$4,070
$7,100
$6,500
8.25%
7.35%
Tax Deduction2
$42,445
$36,922
$11,460
$9,969
$75,000
$70,000
Net Cash to Charity
$25,000
$30,000
Annuity Rate1
3
4
1
2
27
Supplemental Income
Joint Life Examples
Donor: Sue/Dan, Age 75
Gift Amount
Jan/Tim-Age 70
$100,000
$100,000
5.6%
5.9%
Tax-Free Payments3
$3,172
$3,586
$5,600
$5,900
6.12%
6.60%
$22,290
$27,920
$6,188
$7,538
$94,000
$90,000
$6,000
$10,000
Annuity Rate1
Tax Deduction2
Net Cash to Charity
Based on a joint annuitant charitable gift annuity and ACGA rates effective 7/1/2003. Subject to change.
3
4
1
2
28
A CD Alternative
Donor, Age 75, $100,000 Cash Contribution
Certificate of Deposit
Gift Annuity
No Income Tax Deduction
Substantial income tax

deduction of $42,4452
All interest income is 100%

taxable as ordinary Income
A large portion of the annual

payment is tax-free: 67.55%
($4,796)1,3
The interest is relatively low
The payout is relatively high:

7.1% ($7,100)1
Sale of a capital asset to

purchase the CD may generate
capital gain taxation
Sale by the charity of a donated

capital asset can minimize
capital gain taxation obligation of
the donor4
Footnotes on the next slide
29
A CD Alternative
Donor, Age 75, $100,000 Cash Contribution
Certificate of Deposit
Gift Annuity
No charitable intent is satisfied.
Charitable desires can be

satisfied.
FDIC Insured.
Not FDIC Insured.
Principal may be available for

use.
Access to the value of the gift is

no longer possible.
At death, heirs may receive the

principal
At death, heirs do not receive

the principal.
3
4
Assumes 15% long term capital gain rate. Capital gain may be spread over the time period the annuity is expected to be received based on the life expectancy of
annuitant age 75 (12 years). If donor is not the annuitant, the capital gain tax cannot be spread out over the donors life expectancy.
1
2
30
Please select only one of the

following two slides (32 or 33)
applicable to the type of organization
being presented to.
Slide 32 is more applicable to
community foundations agreeable to
assisting other charitable
organizations.
31
An Example
Male Age 75, $100,000 Cash Donation
Charitable Organization
The Charity accepts the donation
and makes a single premium
immediate annuity payment of
$65,0004 to LBL.
The Charity retains $35,000 which
can be used for charitable purposes
immediately! The Charity receives
annuity payments from LBL and then
makes the stipulated annual
payments to the annuitant.
Cash $100,000
Donation
Total Annual
Payment of
$7,100 (7.1%)1
Equals effective
payout rate of
8.25%1,3
Payments
Lincoln Benefit Life

Receives a single premium immediate annuity payment of
$65,0004 (reinsurance cost). Stipulated payments are then
made to the Charity for the annuitants lifetime
The Donor/Annuitant
Makes a cash contribution to the
Charity.
Receives an annual payout of $7,100
(of which 67.55%1,3 is tax-free) for
life.
Receives a substantial income tax
deduction of $42,4452. (Can be used
to offset other income over a five
year period of time.)
Can purchase life insurance to
replace the asset at death.
Remainder
Beneficial
Charities
32
An Example
Charitable Organization
The Charity accepts the donation
and makes a single premium
immediate annuity payment of
$65,0004 to LBL.
The Charity retains $35,000 which
can be used for charitable purposes
immediately! The Charity receives
annuity payments from LBL and then
makes the stipulated annual
payments to the annuitant.
Cash $100,000
Donation
Total Annual
Payment of
$7,100 (7.1%)1
Equals effective
payout rate of
8.25%1,3
Payments
The Donor/Annuitant
Makes a cash contribution to the
Charity.
Receives an annual payout of $7,100
(of which 67.55%1,3 is tax-free) for
life.
Receives a substantial income tax
deduction of $42,4452. (Can be used
to offset other income over a five
year period of time.)
Can purchase life insurance to
replace the asset at death.
Lincoln Benefit Life

Receives a single premium immediate annuity payment of
$65,0004 (reinsurance cost). Stipulated payments are then
made to the Charity for the annuitants lifetime
33
An Example
Footnotes
1 Based on a single annuitant charitable gift annuity and ACGA rates effective 7/1/2003.
Subject to change.
2 This deduction may be spread over more than one year. Any amount exceeding 30%
(50% if cash) of donors AGI per year must be carried forward (for a maximum of 5
years). Assumes a 4.2% Federal Mid-Term rate (subject to change monthly) and
annual payments.
3 Assumes a 27% tax bracket. Annuity exclusion ratio. Annuity payments are part return of
principal (non-taxable), part capital gain, if any and part ordinary income. Once
principal is recovered and/or capital gains are paid, remaining annuity payments then
become fully taxable as ordinary income.
4 Assumes 15% long term capital gain rate. Capital gain may be spread over the time
period the annuity is expected to be received based on the life expectancy of annuitant
age 75 (12 years). If donor is not the annuitant, the capital gain tax cannot be spread
out over the donors life expectancy.
34
CharityLincSM
Safe . . . Simple . . . Flexible
Partially Tax-Free Payments
Capital Gain Tax Advantaged
Generates An Income Tax Deduction
No Legal Fees
No Market Risk
Fixed Payments for Life
35
CharityLincSM
In a Single Transaction
Transform low-yielding assets
Reduce income taxation
Make a charitable gift
Offset taxation on other income
36
CharityLincSM
Why Charitable Organizations
Reinsure
Harnessing the Planned Giving Power
of Financial Services Professionals
Generates planned giving through financial

services professionals
New funds are made available immediately
No cash reserves are required
Minimal administration costs
37
CharityLincSM
Why Charitable Organizations
Reinsure
Harnessing the Planned Giving Power
of Financial Services Professionals
Untapped donor opportunities

Establish new advisor relationship
No trust documents needed
The financial strength of Lincoln Benefit Life
38
CharityLincSM
Providing a New Tier of Planned Giving
Tier I
Outright planned giving while living
Tier II
Planned giving upon death, CRTs, bequests by will or

trust or life insurance, etc.
Tier III
A combination of giving both currently and upon

death; donor advised funds, private foundations, etc.
Tier IV
A Lifetime of Receiving Through Givingsm on a tax

advantaged basis while providing charitable
organizations with the immediate use of the
remainder.
39
The CharitableCapitalSM Design Center

A dynamic planned giving resource

providing linkage between charitable
organizations, their contributors, advisors
and financial services professionals
40

Who is The CharitableCapitalSM Design

Center?
CharityLinc is LBLs marketing name for The
CharitableCapitalSM Gift Annuity Program
developed and administered on behalf of LBL
by The CharitableCapitalSM Design Center, a
division of the Financial Engineering Alliance,
LLC
41

Services Provided
Training and support of Financial Services
Professionals
Illustrations and detailed proposals
Technical design support
Website for processing, illustrations, etc.
42
The CharityLincSM Program

Annuitant Payouts
Donations
Our Network
of
Community
Foundation
Facilitators
Lump Sum
Premium
Payments
Stipulated
Payouts
Remainder
Lincoln
Benefit
Life
Your Organizations
Existing Donor
Base
The CharitableCapitalSM
Design Center
Financial Services
Professionals
Your Organization as
Beneficial Charity
43
The CharityLinc Program

SM
Your Organizations Existing Donor Base

C
G
A
Design Center
Planned Giving Through Financial
Services Professionals
Lincoln
Benefit Life
Single Premium
Annuity Payments
Annuity Payments
Develop
a
Reinsured
CGA
Program
A
N
N
U
I
T
A
N
T
D
O
N
A
T
I
O
N
S
P
A
Y
O
U
T
S
Your Organization
Immediate Use of Remainder
44
The CharityLinc Program

SM
Donor Selected Beneficial Charities
Donor/Annuitants
Of Charities within
your Community
Immediate use of the Remainder by

Charitable Organizations within Your Community
Design Center
Planned Giving Through
Financial Services
Professionals
Lincoln
Benefit Life
Develop
A Reinsured
CGA Program
for use by
Charities in your
Community
Single Premium
Annuity Payments
Annuity Payments
R
E
M
A
I
N
D
E
R
Your Community
Foundation
A Facilitator
C
G
A
A
N
N
U
I
T
A
N
T
P
A
Y
O
U
T
S
45
D
O
N
A
T
I
O
N
S
Thank You!
CharityLinc
SM
A Gift Annuity Program

For Charitable Organizations
46

Charity Linc 2

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Welcome!

For Educational Purposes Only

The CharitableCapitalSM Design

For Educational Purposes Only

What Is a Gift Annuity?

For Educational Purposes Only

What Is a Gift Annuity?

For Educational Purposes Only

What Is a Gift Annuity?

What Is a Gift Annuity?

For Educational Purposes Only

What Is a Gift Annuity?

For Educational Purposes Only

What Is a Gift Annuity?

Why is CharityLinc Unique?

For Educational Purposes Only

Why is CharityLinc Unique?

For Educational Purposes Only

For Educational Purposes Only

For Educational Purposes Only

Gift Annuity Benefits

For Educational Purposes Only

Gift Annuity Benefits

For Educational Purposes Only

Gift Annuity Benefits

For Educational Purposes Only

Gift Annuity Benefits

For Educational Purposes Only

Footnotes are on next slide.

For Educational Purposes Only

For Educational Purposes Only

Effective Payout Rate 2

Total Annual Payments 1

For Educational Purposes Only

For Educational Purposes Only

Lifetime Payout Rate1

Total Annual Payments2

Taxable as Ordinary Income

Taxable as LT Capital Gain4

For Educational Purposes Only

Total Annual Payments

Effective Payout Rate3

Est. Reinsurance Outlay4

Net Cash to Charity

For Educational Purposes Only

Total Annual Payments

Effective Payout Rate3

Income Tax Savings2,3

Est. Reinsurance Outlay4

Net Cash to Charity

For Educational Purposes Only

Total Annual Payments

Effective Payout Rate3

For Educational Purposes Only

No Income Tax Deduction

Substantial income tax

All interest income is 100%

A large portion of the annual

The interest is relatively low

The payout is relatively high:

Sale of a capital asset to

Sale by the charity of a donated

Footnotes on the next slide

For Educational Purposes Only