Income-Producing Charitable Gifts

Income-Producing Charitable Gifts

By Anne Calder, Vice President of Development
Quad Cities Community Foundation

There is a charitable giving option that matches every donor in any situation. Donors focused on estate planning may be interested in options for planned gifts that also provide lifetime income. Many nonprofits can offer donors a range of income-producing vehicles that make this kind of giving both possible and tax effective.

One popular income-producing option is a charitable gift annuity (CGA). Through a CGA, you make a gift of cash or stock to a charitable organization, like the Quad Cities Community Foundation. In return, the charity makes lifetime income payments to you, your spouse, or another person. 

Each CGA payment will be fixed, and the amount of each payment will depend on the age of the person who receives the payments when the payments start. After all payments have been made, the remaining value of your gift is distributed for the charitable purpose of your choice. A CGA is very easy to set up with a charity and offers immediate tax advantages through a generous tax deduction at the time of the gift.

You might also consider a charitable remainder trust (CRT). A CRT also allows you or loved ones to receive fixed or variable income for the rest of your life, knowing the remainder will benefit your community or charitable cause. A CRT will require the assistance of an experienced estate planning attorney to draft and execute. And funding a CRT or CGA with appreciated assets provides even larger tax savings.

These income-producing charitable options are wonderful ways to make your values-based giving part of your lifetime income and estate plans. To learn more about these, contact your local community foundation or financial professional and ensure that your charitable giving works for you and for the causes you care about.