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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(s)
for life.
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 annuitant(s)
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.
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The payments are fixed and will not fluctuate with interest rates.
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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.
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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).
Return to
the Charitable Gift Annuities story or to the glossary.
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