Charitable Gift Annuity

A charitable gift annuity (CGA) is an agreement where a donor makes a gift of liquid assets such as cash or stock and a charity agrees to make fixed payments to the donor for life (or a specified number of years). After the donor(s) passes away, the remainder of the annuity is left for the benefit of a specific charitable organization.

This vehicle has many tax benefits. You can take a tax-deduction when the gift is made, which may also save you capital gains tax depending on the type of asset donated. In addition, a large portion of the annual income you receive may not be taxed for a period of years.

The minimum age for receiving payment from a CGA is 65, although deferred CGAs may be established for donors who are at least 49. This tool is ideal for older donors who:

• want to help a nonprofit organization
• have some savings in assets that can be easily liquidated, such as stocks, savings accounts, CDs, money market accounts
• want the income

It is also a tax-efficient tool for middle-aged donors who want to provide income for their parents or older relatives.

• Receive a steady reliable income during your life, and benefit your favorite nonprofit(s) thereafter
• Take a tax-deduction when the gift is made, which may also save you capital gains tax depending on the type of asset donated
• A large portion of the annual income you receive may not be taxed