Charitable Gift Annuity

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What is a 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. CCF staff  can  help you  calculate these numbers.

Who should consider a Charitable Gift Annuity?

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.

What are the benefits of a Charitable Gift Annuity?

  • 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