A charitable gift annuity is an arrangement whereby a donor transfers cash or other property to a qualified charitable organization in exchange for a commitment by the charity to pay the donor a specified amount each year for the remainder of the donor's life.
Types of Gift Annuities
Gift annuities can be classified into two types - immediate and deferred gift annuity. A deferred gift annuity is one in which payments do not begin until after at least one year from the date the annuity is purchased whereas an immediate annuity begins payment within one year. The commitment by the charity to pay the donor is determined in many cases according to recommended rates adopted by the
American Council on Gift Annuities located in Dallas, Texas. The annuity payment is a fixed payment for life and is made monthly, quarterly, semiannually or annually. The commitment by the charity to pay the annuitant is backed or secured by the assets of the charity. Many state insurance departments now regulate gift annuities, which among other things require maintenance of reserve funds, restrictions on investments of annuity funds and annual reports by the charity.
If you think an annuity may be an important financial and charitable strategy for you, please contact Director of Advancement Jonathan Shively at (815) 734-1710 for more information, or email him at email@example.com. Pinecrest Community (Brethren Home) is a 501 (c) 3 nonprofit charity. To view our tax exempt status letter, click here.