Frequently Asked Questions

Is a gift annuity right for me?

A charitable gift annuity (CGA) is one of many life income options, and is the better choice in certain circumstances, described below. 

Younger donors should strongly consider the possibility of using a deferred CGA. Donors who may be decades from retirement with significant capital gains (often due to sale of a business) are perfect candidates for a deferred CGA. They receive an up-front tax deduction, which helps with their capital gains. Later in life, when they are ready to retire, they are assured of a sizable income stream, due to investment returns during the deferral period. Donors who are amenable to a deferred CGA (even as short as a few years), and its accompanying benefits, should consider this option.

If the donated asset is worth less than $100,000, institutional trustees are usually unwilling to administer a charitable trust.

Charitable trusts have much higher expenses, for both trust and investment management. CGAs, however, often require only reinvestment of the asset (or proceeds). For that reason, donations below that hundred thousand dollar amount may be much better suited to a CGA.

CGAs are preferable when the gift transaction must be completed as quickly as possible.

Creation of a charitable trust can take weeks, often involving both legal drafting and review from tax, legal, and financial professionals. CGAs are much faster – the donee nonprofit typically has a standard form which only needs to be filled out. After that, it is simply a question of completing the asset transfer. This means that a CGA can be set up in a matter of days when time is of the essence.

For additional details on the tax, legal, and structural aspects of charitable gift annuities, please visit American Council on Gift Annuities.

The information on this page is not legal or tax advice. Consult a professional advisor to determine if these options are right for you.

How are the annuity payments secured?

A gift annuity contract becomes a legal financial obligation of National Gift Annuity Foundation and is backed by all of our unrestricted assets. 

Is it better to give cash or appreciated securities for my gift annuity?

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. 

Can I include my children as beneficiaries of the gift annuity?

A charitable gift annuity can only be set up for one or two lives. This is typically includes spouses, but it could be two siblings or two friends, etc. Beneficiaries must be at least 55 at the time of the gift. 

What’s the difference between a commercial and charitable gift annuity?

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 used up by the end of the income beneficiaries’ lives.

A charitable gift annuity is part guaranteed annuity and part charitable contribution. The donor receives a partial income tax deduction based on the assumed value of the portion of the gift the organization will ultimately receive. A gift annuity establishes its payments on the assumption that there will be something left for the organization at the end of the contract. Often annuity rates for gift annuities cannot compete with the annuity rates of a commercial annuity because of the charitable component in the contracts. But then, there are fewer tax benefits with a commercial annuity. 

How are the funds invested?

Our investment model exactly matches the ACGA model assumptions – 40% equity, 60% bonds. We invest in Index funds and ETF’s to match the allocation at the lowest possible cost. 

What are the costs/fees for CGAs?

The annual fees are 1% for money management, and 1% for administration. The total 2% annual fees are assessed quarterly to the total pool. No fees are assessed to the donor or designated charity. 

What assets backing the payment obligations for the CGAs?

National Gift Annuity Foundation is a part of the Dechomai Foundation. Dechomai has over $1.4 billion in total unrestricted assets, with $6.6 million of that amount as an operating surplus reserve, as of January 2023. 

How can a gift annuity be funded with NGAF?

Cash and marketable securities are the easiest and most straightforward assets to use for funding a CGA. In some circumstances, a gift annuity may be created with real estate. Every situation is different. Our administrative services provider, Charitable Solutions LLC, specializes in illiquid asset gifts to charities. Depending on the individual circumstances, a gift annuity could be funded with assets not typically considered for a CGA, like real estate and privately held company shares including S Corp stock.

What is the minimum to fund a gift annuity?

 The minimum is $20,000, and age 55.

Bryan Clontz

Bryan served from 2013-2014 as the Leon L. Levy Fellow in Philanthropy at The American College of Financial Services. He also serves as a Senior Partner to Ekstrom Alley Clontz & Associates – a community foundation consulting firm in New Haven, CT. 

Bryan is the founder of the Dechomai Foundation, Inc. and the Dechomai Asset Trust – two national donor advised funds focusing on non-cash assets generally and S-corp transactions respectively. He is also the founder of The Emergency Assistance Foundation, Inc. – a national fund allowing employers to create emergency assistance and disaster relief funds for their employees, where he now serves as secretary and advisor to the president.

In the decade prior to founding Charitable Solutions, LLC in 2003, he served as the director of planned giving for the United Way of Metropolitan Atlanta, national director of planned giving for Boys & Girls Clubs of America and then as vice president of advancement at The Community Foundation for Greater Atlanta.

He received a bachelor of science in business administration from the College of Charleston in Charleston, SC; a master’s degree in risk management and insurance from Georgia State University in Atlanta, GA; master’s degree in financial services and Ph.D. in financial and retirement planning from The American College of Financial Services, Bryn Mawr, PA.

From 2000-2005, he served as a graduate adjunct professor for both personal financial planning and life insurance in the Department of Risk Management and Insurance at Georgia State University. He serves on the Editorial Board of the Planned Giving Design Center (2000-current) and on the Advisory Board for the American College’s Chartered Advisor in Philanthropy designation (2001-current).  

Previously, he served on the American Council on Gift Annuities’ Rate Recommendation and Research Committee (2003-2010) and the Partnership for Philanthropic Planning (formerly NCPG) Board (2007-2009).

He has given more than 2,000 presentations on charitable gift planning; been published in an international insurance textbook; and written more than two dozen articles in financial services and planned giving journals, including a planned giving manual entitled Just Add Water, which has sold more than 2,500 copies. Bryan chaired the inaugural statewide Leave a Legacy Georgia! campaign. 

He is the co-inventor of a proprietary CGA risk management process (LIRMAS- Life Income Risk Management Analytic Suite) based on an actuarial study he co-authored for the Society of Actuaries on CGA Mortality.