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A contract established with a charity that allows individuals to transfer assets to the nonprofit organization in return for a partial tax deduction and a fixed income for the donor's lifetime. After the donor dies, the charity keeps the remainder of the gift.
Charitable gift annuities can often be established for as little as $10,000 with organizations like community foundations or universities. Individuals considering this option should engage with a well-run charity that operates in line with their charitable missions.
An effective option for individuals who:
Require income and want to support only one charity by donating easy-to-liquidate assets, such as cash or publicly traded securities.
|Tax efficacy||Limited||Due to income received from annuity, deduction is limited and generally equal to amount of the contribution minus the present value of payments to be made to the donor during his or her life. Donating appreciated assets can provide additional tax advantages.|
|Control||Minimal||You choose an organization to receive your donation; then it controls the assets/decision-making.|
|Distribution to charity||Restricted||Limited to one organization, which you choose.|
|Legacy options||Some||At death or end of the annuity contract, the remaining assets go to a charity of your choice. Depending on the sponsoring organization, you may be able to give the remainder to multiple charities.|
|Recognition v. anonymity||Some flexibility||Can remain anonymous to public but not to the sponsoring organization.|