Charitable Gift Annuities

A Charitable Gift Annuity is a gift vehicle that falls in the category of Planned Giving. The charitable gift annuities provides a contract between the donor and a charity. The donor transfers the money or property to the charity and gets the partial tax deduction. The donor also gets a periodic income from charity and When the donor passes away, the gift is kept by the charity.

The amount of income stream is determined by many factors including the donor's age and the policy of charity. Most charities use payout rates defined by the American Council on Gift Annuities.

Before entering in an agreement one should clarify that :

(1) The organization is a charitable organization.
(2) The annuities issued by the charitable organization are qualified charitable gift annuities as defined in Section 41-120, Idaho Code.

When entering into an agreement for a qualified charitable gift annuity, the charitable organization shall disclose in writing to the donor, in the annuity agreement.

One popular method is the gifting of an irrevocably assigned life insurance policy to a charity. In that scenario, the donor deducts premiums as gifts, and upon the donor's death, the charity reaps a substantial benefit. An another method for deferred giving is variations of charitable remainder trusts. According to this if the donor is availing the benefit of having lifetime income stream so the charity has to wait for the death of the donor.

A CGA, however, which is reinsured with an immediate annuity provides the charity with the advantage of immediate access to a significant portion of its gift proceeds.