Charitable Gift Annuity

Unlike a CRT, the CGA does not use a trust. The donor gives the assets directly to the charity, which then gives annuity income to the donor.

• The CGA donor gets tax benefits and fixed, guaranteed annuity income for life based on the original value of the assets transferred to the charity. A typical CGA donor is 55–80 years old and begins receiving annuity payments within a year of the time the gift was given. Payments to the donor come directly from the charity—not from a commercial annuity. A Deferred Charitable Gift Annuity (DCGA) allows the donor, who is usually 40–60 years old, to defer receiving the annuity income until later.
  
• The charity gets the gift, part of which is used to purchase a commercial annuity owned by the charity to help meet its requirement to make payments to the donor.
  
• The donor’s heirs get nothing from the CGA or DCGA.*

*If the donor wants to replace all or part of the inheritance that his or her heirs “lose” to the charity in a CRT, CGA, or PIF, the donor can use part of the income from the trust, annuity, or PIF income to purchase a life insurance policy that names the heirs as beneficiaries.