Get Income for Life & a Tax Write-Off
If tax savings and a lifetime of steady income sound appealing, you might be a candidate for a charitable fixed annuity, also called a gift annuity.
Similar to an insurance company's fixed annuity, a charitable annuity pays you the same amount every year. When you die, the charity receives the remaining principal. These annuities appeal most to donors in their seventies and eighties, who are less concerned than younger people about keeping ahead of inflation.
Don't shop around for the highest rate of return among the charities, though, because all the large U.S. charities offer yields set annually by the American Council on Gift Annuities in Dallas. This benign collusion among charities, which began casually about 70 years ago, was finally legalized by Congress and President Clinton in the 1990s.
A gift annuity's yield varies according to your age. Rates are the same for men and women. A two-life gift annuity, which pays income to the survivor for life after the donor's death, offers a slightly lower yield than a single life gift annuity.