First, you make a donation to a single charity. Then, the gift is set aside in a reserve account and invested. Based on your age(s) at the time of the gift, you receive a fixed monthly or quarterly payout (typically supported by the investment account) for the rest of your life.
What is the benefit of a charitable gift annuity?
A charitable gift annuity allows you to eliminate capital gains tax when you donate long-term appreciated assets, including non-income-producing property. By donating assets in-kind, you will preserve the full fair market value of the assets, rather than reduce it by selling it and paying capital gains taxes.
Can a gift annuity be used for more than one charity?
Because a gift annuity agreement is a contract with a single charity, there is no way to establish a charitable gift annuity that can support multiple charities at the same time. Charitable gift annuity donors (annuitants) receive payments for the rest of their lives.
What are the terms of a gift annuity agreement?
What is a gift annuity agreement? A gift annuity agreement is a lifelong contract, not a trust, between a single nonprofit organization and an individual or couple, who are referred to as annuitant(s). The terms of this agreement will lock in the rate, amount and timing of all payments the annuitant(s) receive.
What’s the minimum donation for a charitable annuity?
Depending on the charity, your annuity can be funded with cash donations, but potentially also securities and gifts of personal property. Minimum gifts for establishing a charitable gift annuity may be as low as $5,000, but are often much larger.
Who are the beneficiaries of a charity annuity?
(You are the “annuitants,” which is the specific name for beneficiaries of annuities and many insurance policies.) Depending on the charity, your annuity can be funded with cash donations, but potentially also securities and gifts of personal property.
