A Charitable Gift Annuity Benefits: You and A Charity of Your Choice
Are you interested in making a donation to a worthwhile cause but also need the peace of mind that comes from knowing you will have a steady influx of money during your retirement years? The answer, then, could be a charitable gift annuity.
A charitable gift annuity is the combination of making a donation and establishing a savings plan for your retirement. When you decide to own a charitable gift annuity, you give the charity of your choice (taking into account that they participate in charitable gift annuities) a sum of money that they will then, with your permission, purchase an annuity. The charity will take whatever money is leftover after they’ve purchased the annuity and you will receive a regular stream of income during your retirement. Often, the charity can take somewhere between 25 and 30% of the initial amount gifted. Then, when you die, the charity will also receive the money that remains in the annuity.
One of the main benefits of a charitable gift annuity, besides the fact that you are making a donation while also guaranteeing that you have a source of income in the future, is that you have something to gain by owning an annuity when it comes to taxes. You will, first of all, receive a tax receipt for your donation to the charity. Then, a portion of the payments you receive from your annuity will also be tax-free.
Those who own a charitable gift annuity will also often have a say in how the charity uses their gift. So, for instance, you may decide that you want the money to go toward a specific humanitarian effort or to the charity’s services in a specific location.