A charitable gift annuity is an annuity between an individual and a government approved charity. Like other annuities, an individual pays for the annuity to the charitable organization, and the charity sets up lifetime payments to the beneficiary and maybe a spouse based upon contribution and age. A charitable gift annuity is unique because the charity will benefit from the immediately available income and will receive any leftover assets once the beneficiary passes. Further, a charitable gift annuity can reduce income and capital gains taxes for the beneficiary.
[Last updated in June of 2021 by the Wex Definitions Team]