Charitable Gift Annuities for Nonprofits
Has your organization considered offering charitable gift annuities, but has been hesitant due to the time, expense and risk of offering this gift option to your donors? A new partnership between the Community Foundation of Greater Des Moines and the Charitable Giving Resource Center now gives your organization the opportunity to offer charitable gift annuities to donors in a manner that is time and cost efficient and includes minimal risks.
What are charitable gift annuities?
Charitable gift annuities are contracts that a nonprofit makes with a donor whereby the donor contributes money, and the nonprofit agrees to pay that donor an annual income for life. The donor receives a partial tax deduction and cash flow for life. The charity receives the remainder of the amount donated when the donor dies.
To provide this gift option a nonprofit would need to provide investment services and tax reports to the donor. This often deters nonprofits from offering charitable gift annuities. A nonprofit can operate a charitable gift annuity program by contracting it out to a financial service provider, such as a community foundation. The Community Foundation of Greater Des Moines uses the American Council on Gift Annuities to set the rates that guide annuity payments. These are set so that ideally the nonprofit receives half of the donor's initial contribution.
Benefits of partnering with the Community Foundation
- Instantly offer charitable gift annuities
- No tax reporting duties or check writing required
- Receive technical support to educate donors
- Maintain donor relationships and reap the benefits of a planned gift
- Receive a turn-key program including sample ads, newsletter articles and letters