Gift Annuity

A Gift Annuity (also referred to as a "charitable Gift Annuity" or "CGA") is a contract (not a "trust"), under which a charity, in return for a transfer of cash, marketable securities or other assets, agrees to pay a fixed amount of money (payment) to one or two individuals, for their lifetime, not a term of years, except in the instance of the "College (Tuition) Annuity"

The website address for ACGA is:  http://www.acga-web.org.

The Planned Giving Design Center states the following:

As its name suggests, a charitable gift annuity consists of two elements: 1) an outright charitable gift, and 2) the purchase of a fixed income annuity contract. Payments can begin immediately or can be deferred for a period determined by the donor and set forth in annuity contract. The payment period can be measured by one annuitant's life (who is in most cases is the donor) or by the lives of two joint and survivor annuitants (who are usually husband and wife). Charitable gift annuities are not issued for a fixed term of years. As will be discussed, however, it is possible to terminate the annuity payments in advance of the life measuring term.

Unlike charitable remainder trusts or pooled income funds, whereby the obligation to make payments is limited solely to the contributed assets or segregated fund, a charitable gift annuity is considered a general obligation of the issuing charitable organization. Charitable gift annuities, therefore, take on much of same characteristics as commercial annuities with the issuing charity acting as the insurer. Many states require issuing organizations to be licensed and to maintain investment reserves. [more. . .]

From the Wall Street Journal: IRA Transfer to a Gift Annuity Would Be Taxed

(From the Wall Street Journal, June 27, 2009)

By KELLY GREENE

Can I transfer my IRA assets into a charitable-gift annuity sponsored by a qualified nonprofit, and thereby receive the same future stream of monthly income payments as I would by buying an immediate income annuity from an insurer? I am 65 years old and would prefer to leave these assets to an alma mater university rather than an insurance company upon my death.
—Bill Hay, Chicago

You can transfer assets from your individual retirement account to a charitable-gift annuity, but you have to treat that transfer as an IRA withdrawal and pay the taxes involved. [more]

Investments

Options for nonprofits to invest reserve funds will be address on the Process Donations website in the near future.

Also see: Planned Giving

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