Deferred Charitable Gift Annuity (DCGA)

A Deferred Charitable Gift Annuity (DCGA) is often a gift of choice when a guaranteed income is desired. CGA programs have become very popular with charitable organizations over the past few several years. In a Deferred Charitable Gift Annuity program you transfer assets (usually cash or securities) to a charity in exchange for a contractual agreement for the charity to pay you a percentage of the original gift amount as an income stream beginning at a future date. The income lasts for life and the percentage is based on the life expectancy of the individual receiving the income. Part of the annuity income may be received tax free. Any capital gains taxes due on the asset that was exchanged for the annuity are paid over the annuitant's life expectancy.

One of the primary differences between a Charitable Gift Annuity and a Charitable Remainder Annuity Trust (CRAT) is that with a DCGA the obligation to pay generally belongs to the charity and the charity sets up the DCGA program and how it will work. With a CRAT the responsibility belongs to the trust and the provisions of the Trust will govern the "program" being followed.

Is this right for me?

Do I have a genuine charitable intent? - yes

Do I want a fixed income for life to begin at a later date? - yes

Will the income based on the amount I can give be enough? - yes

Do I want to make future gifts to the same charity or have the gift benefit any additional charities? - no

Is the person who will receive the income between the ages of 55 and 80? - yes

If your answers agree with those above, a DCGA may be an appropriate gift tool for you to use. If your answers vary slightly, a DCGA might still be an appropriate part of your overall structured gift planning.

How Do I Make a Gift Using a Deferred Charitable Gift Annuity?
How each Deferred Charitable Gift Annuity program is run is determined by the particular charity offering the annuity contract. Contact the charity you wish to benefit to get more information on how their program is run.

There may be some risks involved in a DCGA program. The level of risk will depend on the individual DCGA program. A Deferred Charitable Gift Annuity may also have an impact on other parts of your financial and estate plan. Be sure you discuss the program with your financial and legal advisors who are part of your planning team.

Assets Used With This Tool (Deferred Charitable Gift Annuity[DCGA])