Sometimes, givers find themselves torn between the desire to use their assets for security in retirement and the desire to make an impact through charitable giving. But it’s possible you can do both. A charitable gift annuity (CGA) is a unique option that allows you to spread payments (for yourself or another) over time, while also including charity in your financial plan.
How does it work? A CGA is a simple arrangement that involves a charitable gift and an annuity. You make the gift (a portion of which is tax deductible in the year of the gift), and then you (or a recipient you designate) receive fixed annuity payments each year for the remainder of your life (or the life of the designated recipient).
Because NCF typically reinsures your annuity payments, a portion of your gift goes to the charity or charities you select soon after funding. “Reinsures” means your payments are covered by a large insurance company, which ensures payment.
Reinsurance also protects you from exhausting the money in your CGA.
CGAs aren’t just for older people. When a younger person decides to fund a CGA, the money in the annuity has even longer to grow.
Rates for CGAs are recommended by the American Council on Gift Annuities (ACGA), and they’re calculated so charities receiving CGAs will receive (on average) 50 percent of the amount of the gift at the end of the annuitant’s life expectancy. And 96 percent of charities use the ACGA recommendations. So, you don’t have to shop from one place to another wondering if you’ve found the best rate. And the best news? CGA rates are up this year.