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Gift Annuity Benefits
One of the simplest and most popular charitable gifts is a charitable
gift annuity. This gift option is a combination of an investment and
a gift and provides life income to the donor (and another recipient
if desired - the annuitants). The designated charity accepts the gift
and in return obligates itself to pay a fixed and specified dollar
amount to the annuitant or annuitants for life.
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A charitable gift annuity immediately becomes the property of the
charity and is an irrevocable gift. The charity is legally bound to
fulfill its commitment to pay the annuitants for life. Some states
have regulations regarding the issuance of charitable gift annuities.
Please contact us regarding any questions.
There are two types of charitable gift annuities - immediate and
deferred. An immediate annuity begins paying income immediately after
the annuity agreement is signed. A deferred charitable gift annuity
begins the income payments at a specified date in the future. A deferred
charitable gift annuity will generally provide a larger charitable
deduction than the immediate annuity and, as the funds will have an
opportunity to grow without income distributions for a period of years,
the income rate will generally be larger.
Gift Annuity Benefits
As a portion of the annuity is a gift, you'll receive an income tax
deduction for the gift if you itemize.
- A portion of the annual annuity income is exempt from
Federal taxes.
- You may save tax on the capital gain (profit from
an investment).
- You avoid estate taxes, probate, and costs on the
amount involved.
- The charity will have the use of the funds after the
beneficiary's lifetime.
- The payments are fixed and will not fluctuate with
interest rates.
- Your annuity is as safe as the organization you invest
with, for the total assets of the organization stand behind their
agreement to make payments to you.
- Generally the funds used to set up a charitable gift
annuity may be structured as an unrestricted gift or to fund a particular
item or program that is important to you (with the consent of the
charity).
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Return to the Charitable
Gift Annuities story or to the glossary.
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Please note, individual financial
circumstances will vary. The information on this site does not
constitute legal or tax advice. Donor stories and photographs
are for purposes of illustration only. As with all tax and estate
planning, please consult your attorney or estate specialist.
All material is copyrighted and is for viewing purposes only.
Use of this site signifies your agreement with the terms
of use. The content in this Planned Giving section
has been developed for Big Brothers Big Sisters by Future
Focus. Please report any problems to section
webmaster. Revised: July 22, 2008 16:40.
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