How Does a Charitable Gift Annuity Work?
Understanding the question “How does a charitable gift annuity work” may seem daunting and confusing, but it is simply a contract between a charity and a donor, also called an annuitant. The terms of the contract are the following: a person donates cash, or possibly securities or personal property, to a charity; the charity sets the gift aside in a reserve account and invests it; based on the donor’s age at the time of the gift, they, or another designated person, receive a fixed, periodical payout for the rest of their lives; upon the donor’s death, the charity receives the remainder of the gift. The initial donation is generally eligible for a partial charitable tax deduction, and part of the annuity payments could be tax-free as well, making this an attractive investment option.[1]
GFA World’s charitable gift annuity contract follows that same formula, with a few more specifics. The minimum investment for a charitable gift annuity is $10,000. Donors can choose to begin receiving payments for one or two people immediately, or annuities can be deferred to a future date. The minimum age to start receiving payments is 50 years. The American Council of Gift Annuities determines payout rates that depend on the annuitant’s age and the length of deferral, if any. The rates are computed based on the assumption that approximately 50 percent of the initial gift amount will remain for charity when the donor dies if the annuitant lives to the average life expectancy. Once the rate is set at the time of the gift, it does not change. The National Christian Foundation administers the charitable gift annuities on behalf of GFA.[2]
Charitable gift annuities are a great way to support GFA and receive regular, fixed payments for the rest of your life. It truly is an investment with eternal returns. GFA can only continue its ministries through donations and prayer from believers all over the world. Through the generosity of donors, various areas of ministry exist, for example, supporting national missionaries, our Child Sponsorship Program, providing clean water, helping widows, providing free medical care, building churches and many more programs across Asia and now into Africa too.
Consider partnering with GFA in these vital missions with a donation, a sponsorship or a mutually beneficial charitable gift annuity.
You can contact GFA to discuss what is a charitable gift annuity and what it could look like in your specific situation.[3]
Learn more about what is a charitable gift annuity
[1] “What Is a charitable gift annuity?” Fidelity Charitable. Access July 3, 2023. https://www.fidelitycharitable.org/guidance/philanthropy/charitable-gift-annuity.html.
[2] “Planned Giving: The Charitable Gift Annuity.” GFA World. Accessed July 3, 2023. https://www.gfa.org/estate/cga/.
[3] “Non-cash Giving: Gospel for Asia Charitable Gift Annuity.” GFA World. Accessed July 3, 2023. https://www.gfa.org/plannedgiving/cga_contact/.