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Charitable Gift Annuities Explained
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.
 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).
Return to the Charitable
Gift Annuities story or to the glossary.
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 California Symphony by Future
Focus. Please report any problems to webmaster.
Revised: March 20, 2007 22:16.
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