A gift annuity contract is a legal financial obligation of the National Audubon Society and is backed up by all the unencumbered assets of Audubon. The payout rate and the annuity payment are guaranteed by that contractual obligation.
Both have distinct advantages. A gift of cash will produce a larger tax-free portion of the annuity. A gift of stock can increase your income because of reduced capital gains cost. Both assets produce an equal annuity rate and charitable income tax deduction.
A charitable gift annuity is limited to one or two beneficiaries or annuitants. This is typically a husband and wife, but it could be two siblings, or two friends, etc. Beneficiaries must be at least 65 at the time of the gift, or consider a deferred or a flexible gift annuity (see below). For more than two beneficiaries you could consider a charitable unitrust.
A commercial annuity, typically sold by banks and life insurance companies, will provide the owner with fixed or variable income based on commercial rates of return. These plans establish their annuity payments based on the assumption that all of the assets in the plan will be returned to the annuitant before their death. A charitable gift annuity is part annuity to one or two individuals and part gift the charitable institution… The donor receives an income tax deduction based on the assumed value of the portion of the gift that the charity will ultimately receive. A gift annuity establishes its payout rates on the assumption that there will be something left for the charity at the end of the contract.
Yes, you can make a gift now for an annuity and defer your payments to a future date of your choice, typically sometime in your retirement years when you will need the income. In this sense, a deferred payment gift annuity can serve as a type of tax-deferred savings plan that will provide you with guaranteed income in the future.
Office of Gift Planning
National Audubon Society
225 Varick Street, 7th Floor
New York, NY 10014