Charitable Gift Annuities · Tucson, Arizona
Planned giving that
pays you back for life
How it works
What a charitable gift annuity actually is
A charitable gift annuity is a simple agreement with three moving parts. You make an irrevocable gift, you receive fixed payments for life, and whatever remains supports the cause you chose.
Step 1
You make a gift
Cash or appreciated assets go to a qualified charity as an irrevocable gift. This is what earns you an immediate partial tax deduction.
Step 2
You receive income for life
In return, you (or you and a spouse) receive fixed payments for the rest of your life. The rate is set when you fund the annuity and does not change, and the payments are a general obligation of the issuing charity.
Step 3
The cause receives the rest
When the annuity ends, whatever remains passes to the charity you named, completing a legacy gift to something you believe in.
Fixed income for life
Payments continue for as long as you live, at a rate that does not change, backed by the assets of the issuing charity.
Tax advantages now
A partial income-tax deduction this year, plus part of each payment may come back to you tax-free.
Capital gains, spread out
Funding with appreciated assets can spread the capital-gains impact instead of taking it all in one year.
Is a gift annuity right for you?
Who a charitable gift annuity suits
A charitable gift annuity is powerful in the right situation and wrong in others. Being honest about which one you are in is the whole point of talking first.
It tends to fit when you…
It usually isn’t the answer when you…
How it compares to the alternatives
Three common ways to give and receive a benefit. Each fits a different goal.
Charitable Gift Annuity
This pageCharitable Remainder Trust
Donor-Advised Fund
Beyond the annuity
Three tax-smart ways to give
A gift annuity is one route. Two others come up often, and which one fits depends on whether you need income back, what you are giving, and where you are in the year.
The charitable gift annuity
By making a gift of cash or appreciated securities, you enter into a contract that provides you, and potentially a spouse, with fixed payments for life. The rate is set when you fund it and does not change with markets. The payments are a general obligation of the issuing charity, backed by its assets.
Gifts of appreciated securities
When you donate appreciated assets held for more than one year, you can avoid capital gains tax on the appreciation while receiving a charitable deduction for the full market value. That lets you give more than you could by selling first and donating the cash.
IRA charitable rollovers
If you are 70 and a half or older, you can send money straight from your IRA to a qualified charity without it counting as taxable income. For anyone facing required minimum distributions, that lowers adjusted gross income, which can reduce the tax on Social Security benefits and lower Medicare premiums.
How the three compare
| Giving method | Immediate tax benefit | Lifetime income | Primary advantage |
|---|---|---|---|
| Charitable gift annuity | Partial deduction | Yes, fixed for life | Higher payout rate at older ages |
| IRA rollover (QCD) | Reduces taxable income | No | Satisfies RMD requirements |
| Appreciated stocks | Avoids capital gains | No | Maximises gift value |
Estimate your income
See what a gift annuity could pay you
Move the sliders to explore. These are illustrative estimates. Your actual numbers depend on current rates and your specific situation.
Estimated annual income
$6,300
about $525 / month for life
Illustrative estimates only, not a quote or an offer. Rates shown are the American Council on Gift Annuities (ACGA) suggested maximum rates effective January 1, 2024, which most issuing charities follow; the charity you choose confirms the actual rate. Payments are a general obligation of the issuing charity, backed by its assets. Any charitable deduction depends on IRS discount rates in the month of your gift and is determined with your CPA. Confirm all figures with your CPA and the charity before proceeding.
A structured example
How a deferred charitable gift annuity can be structured
A gift annuity does not have to begin paying immediately. Deferring the start date raises the payout rate and lets a larger share of the gift go to work for the charity straight away. Here is how one arrangement was structured.
Illustration · When one gift has three jobs
One gift structured for income, impact, and stability
Consider a couple in their late sixties who want to give $1,000,000 to a national nonprofit they have supported for years. They want three things that usually pull against each other: money the charity can use now, income for themselves later, and confidence that the organization can meet what it has promised them.
Splitting the gift lets each portion do one job.
| Allocation | Amount | Purpose |
|---|---|---|
| Immediate charitable impact | $500,000 | Goes straight to the nonprofit’s programs, available to spend now rather than years from now |
| Reserve against the obligation | $160,000 | Held in reserve against the future payments the charity has agreed to make, reviewed against the reserve rules that apply in its state |
| Deferred income component | $340,000 | Funds the annuity itself, with payments deferred to start at about age 75 |
Deferring the start date is what makes the arithmetic work. Payments that begin ten years out carry a higher rate than payments that begin immediately, so a smaller share of the gift buys the same income, and the rest is free to go to work now.
Nothing here is unusual on its own. What takes coordination is deciding the three amounts together rather than one at a time, alongside the charity and the couple’s CPA.
Illustrative scenario shown for educational purposes. It does not describe a specific client engagement. Payment amounts, tax treatment, and outcomes vary with age, timing, and the rates in effect. Payments under a charitable gift annuity are an obligation of the issuing charity and are not FDIC insured.
Common questions
What Arizona donors should know
A gift annuity is a contract with a charity rather than a product from an insurance company, and that distinction changes what stands behind your payments.
Charitable partnerships
Not every charity issues gift annuities. The organization has to be equipped to take on a lifetime payment obligation and to hold reserves against it, which in practice means larger institutions: universities, foundations, hospital systems, and national nonprofits. Part of the work is confirming the charity you have in mind actually offers one.
Charity financial responsibility
Payments under a charitable gift annuity are obligations of the issuing charity and are not insured or guaranteed by the State of Arizona or any government agency. Donors should independently evaluate the financial strength of the charity.
Charitable gift annuities can be an effective strategy for individuals seeking to combine charitable giving with predictable income and tax-aware planning. Because they are not suitable for every situation, careful evaluation and professional guidance are essential.
Important Arizona disclosure
Charitable gift annuities issued to Arizona residents are subject to Arizona law and oversight by the Arizona Attorney General’s Office. Payments are obligations of the issuing charity and are not insured or guaranteed by the State of Arizona. This material is for educational purposes only and does not constitute tax, legal, or investment advice. Arizona tax treatment may differ from federal tax treatment. Donors should consult their own qualified tax advisors regarding income, capital gains, and estate tax implications.
Gift annuity questions
Gift annuity questions
Tucson donors ask
What is a charitable gift annuity?
It’s a simple agreement: you make an irrevocable gift of cash or assets to a qualified charity, and in return the charity pays you (or you and another person) a fixed amount for life. When the annuity ends, the charity keeps what remains. It combines lifetime income, an immediate partial tax deduction, and a legacy gift in one arrangement.
Do I get a tax deduction for a gift annuity?
Yes, a partial one. Because part of your gift funds your future payments and part is a true charitable gift, you can typically deduct the charitable portion in the year you fund it. A share of each payment may also come back to you tax-free for a period. The exact amounts depend on your age, the gift, and current IRS rates, so confirm them with your CPA.
Can I fund a gift annuity from my IRA?
In many cases, yes. Current rules allow a one-time qualified charitable distribution (QCD) from an IRA to fund a gift annuity, up to an indexed limit, once you reach the qualifying age. It can count toward your required minimum distribution. The limits and rules change, so this is worth confirming for your specific year and situation before acting.
How is my payment rate determined?
Rates are based on your age (or both ages, for a two-life annuity) at the time you fund the annuity. Older annuitants receive higher rates. Most charities follow the schedule published by the American Council on Gift Annuities (ACGA). Once your annuity is set up, your rate is fixed and never changes, regardless of the markets.
What can I use to fund a gift annuity?
Commonly cash or appreciated assets such as publicly traded securities. Funding with appreciated assets can be especially efficient, because it may let you spread the capital-gains impact rather than realizing it all at once. The right funding asset depends on your situation and is worth reviewing with your advisor.
Can I change my mind or get my money back later?
No, a gift annuity is irrevocable, which is part of what makes the tax benefits possible. That’s exactly why it should only be funded with assets you won’t need back, and why it’s worth walking through the numbers carefully before you commit. We’re glad to do that with you and your CPA.
How is a gift annuity different from a charitable remainder trust?
A gift annuity is a contract directly with the charity, which pays you a fixed amount set when you fund it. A charitable remainder trust is a separate legal entity with its own trustee and tax filings, and it can pay a fixed amount or a percentage that moves with the trust's value. Gift annuities are simpler and suit smaller gifts. Trusts cost more to run and make sense at larger amounts.
Next step
Run your actual numbers with us
The estimator gives you a feel for it. A conversation gives you the specifics: the rate the charity you have in mind actually offers, how the payments would sit alongside the rest of your income, and what to take to your CPA. No pressure either way.
Schedule a ConsultationNo obligation · Coordinated with your CPA · Tucson, Arizona