Of all the gifts that pay you back, the charitable gift annuity is the simplest, most affordable, and most popular. The donor makes a gift to your nonprofit and in return, you agree to make fixed payments to the donor for life.
The gift agreement is a simple contract between you and the donor. Your payments become one of your general obligations, fully backed by all your assets, and will not fluctuate. Donors love that.
When the contract ends, the nonprofit applies the balance of the gift annuity to the program designated when the gift was made.
The donor’s gift annuity can start payments once the donor has made the contribution (an immediate payment gift annuity), or payments can begin at a later date selected by the donor (a deferred gift annuity). Deferral entitles the donor to a higher annuity rate and generates a larger charitable deduction.