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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(s) for life.
A
charitable gift annuity immediately becomes the property
of the charity and is an irrevocable gift. The nonprofit
organization 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 Charitable
Gift Annuities or to the glossary.
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