The Charitable Gift Annuity is a perfect example of how you can accomplish two objectives with one asset. It is truly a win-win proposition.
Charitable Gift Annuities have a valuable benefit for the donor as well as the charity. For example, someone age 70 who purchases a $50,000 charitable annuity will receive 5.1% annually: a steady income of $2550 per year until they die. Maximizing the gift for all concerned, the Gift Annuity results in a charitable contribution deduction in addition to the annual annuity payment.
Simply stated, a Charitable Gift Annuity is an agreement between a donor and a nonprofit organization. The donor gives the charity a lump sum of money for which the charity agrees to pay the donor an income as long as the donor lives. When the donor dies, any remaining money belongs to the charity.