CHARITABLE GIFT ANNUITIES
Donor transfers cash or securities in exchange for charity's promise to pay a fixed annuity to one or two individuals for life. The present value of the annuity is less than the amount transferred, creating a gift to charity. Most charities pay annuities based on the rates recommended by the American Council on Gift Annuities.
Cash gifts ensure maximum tax-free payments. Gifts of securities enable donors to convert stocks to annuities while minimizing capital gains taxes. Many charities do not accept gifts of real estate, closely held stock, or tangible personal property.
Donors are typically in their 70s or older, although deferred payment annuities may be attractive for younger individuals who wish to supplement retirement savings. Most charities accept contributions as low as $10,000 or sometimes less.