What Is a Charitable Gift Annuity, and How Does It Relate to GFA?

Generous people have so many options for charitable donations, it can be overwhelming: cash, time, advocating for the charity on social media, sponsorships and much more. One option that is often forgotten is a charitable gift annuity. But what is a charitable gift annuity?

Simply put, a charitable gift annuity is exactly what it sounds like; it is part gift and part annuity, funded by a contribution of money or stock shares.[1] This type of contract provides donors with a fixed income stream for life in exchange for their donation to charity.[2]

This simple definition still leaves the question, “How does a charitable gift annuity work?” The following steps offer a basic outline of how the contract plays out:
  1. A donor signs an annuity contract with a charity, makes a lump sum donation and takes a partial tax deduction.
  2. The charity invests the donation.
  3. The donor then receives steady payments on a fixed schedule for life, according to the terms of the annuity agreement.
  4. Upon the donor’s death, the charity receives the remaining balance of the invested funds.[3]

The organizations that offer charitable gift annuities establish minimum ages as well as minimum amounts acceptable to set up the contract.[4] The donor’s age and the initial donation amount also determine the amount received in each payout. Older donors get more money for each annuity as their lifetime agreement will be shorter than a younger person’s.[5]

For donors who want to know how to give charitable donations as gifts, it is merely a matter of designating another person as the recipient of the annuity payments rather than the donor themselves.[6] This is a simple addition to the annuity agreement, and then the designee will receive the payments for the remainder of the donor’s life.

Answering “What is a charitable gift annuity” is only half of the equation. Donors want to know what impact their contributions will have on GFA World and other charities. GFA is blessed by many donors; donors are what make it possible for our ministry to continue working in Asia and now in Africa as well. Every little bit helps accomplish our vision “to meet tangible needs of precious people and show God’s love to those who need it most.”[7]

This vision takes on many forms in practice. One is through the raising up of national missionaires. GFA selects, trains and supports national missionaries, who work largely in areas where no one else has ever shared the Gospel. They have started thousands of new fellowships within people groups that have not yet been reached. These missionaries are uniquely qualified to do this work; they know the culture, language, beliefs and mindsets of the people. They are not seen as outsiders, so they have more access to restricted areas and are more readily accepted into communities. They know what the people need and can coordinate with community leaders for helping to meet the needs of that particular community, all done in the name of Christ.[8]


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