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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 or annuitants 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 annuitant's
lifetime.
- The payments are fixed
and will not fluctuate with interest
rates.
- Your annuity is as
safe as the organization you invest
with, because 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.
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