Establish A Charitable Gift Annuity

Charitable Gift Annuity
Hand holding symbolizing act of giving gift to charity

What is a charitable gift annuity?

A Charitable gift annuity is a way to guarantee an income for yourself while also making a gift to a charity.

The charity normally purchases the annuity through an annuity broker like ourselves and specifies the guarantee period, if any, and for life.

This is a tax effective plan for you as much of the income you receive from such an annuity, is almost free of tax.

And you and your spouse can buy a charitable annuity together.

If the annuity income you receive exceeds your needs, you can buy a life insurance policy to benefit this or another charity. This way you receive additional tax credits for the premiums paid.

Types Of Charitable Gift Annuities in Canada

  • Single Life Charitable Gift Annuity
    Provides monthly income payments to one annuitant for their lifetime.

  • Joint Life Charitable Gift Annuity
    Provides monthly income payments to two people, usually a married couple. The annuity payments continue to the surviving spouse after the first annuitant passes away.

  • Term Certain Charitable Gift Annuity
    The annuitant receives a certain number of payments based on the number of years they chose.

  • Deferred Charitable Gift Annuity
    Income payments begin at a future date chosen by the annuitant, for the purpose of receiving higher payments due to the deferral period.

  • Indexed Charitable Gift Annuity
    Is a type of annuity where the payout is increased every year by a specific percentage usually up to 4% which is determined at the time of purchase.

Charitable Gift Annuity Rates

Rates for chartitable gift annuities vary based on several factors. Here are some key factors regarding Charitable Gift Annuities.

  1. Annuitants Age:Older annuitant receive a higher monthly income compared to younger annuitant.
  2. Annuity Type:Choosing from a single life annuity versus a joint life annuity will affect your income payment.
  3. Charities Policy:Each charity have their own policies and guidelines that can affect your income payment.
  4. Canadian Market Conditions:Current market conditions such as interest rates can affect the rates.

Tax Benefits

With a charitable gift annuity a portion of gift amount may qualify for a tax receipt.

Canadian Charities That Accept Charitable Gift Annuities

  • Doctors Without Borders
    Charitable gift annuities are gifts that provide you with guaranteed income. In exchange for your gift, Doctors Without Borders/Médecins Sans Frontières (MSF) will purchase a lifetime annuity for you from a reputable life insurance company, which will provide you with fixed income for life. After purchasing the annuity, the remaining portion will be used as an immediate contribution to assist our medical humanitarian relief work. Source: Doctors Without Borders

  • The Salvation Army in Canada
    You can establish a charitable gift annuity by donating a certain sum of money to The Salvation Army. A portion of the contribution amount is used to purchase a commercial annuity to provide the annuity income. The amount remaining represents a charitable donation to the Army. You receive an immediate income tax receipt for this amount and the funds are available to support the Army’s programs immediately. Source: Salvation Army

  • Canadian Red Cross
    A Red Cross charitable gift annuity offers you the ability to make a significant gift while enjoying income for life that is largely tax exempt. Source: Red Cross

  • Arthritis Society Canada A charitable gift annuity is an attractive way for individuals aged 70 years and older to make a donation to Arthritis Society Canada while receiving a guaranteed income stream for life. Source: Arthritis Society Canada

  • Unicef Canada
    A charitable gift annuity is a financial product that is purchased through a life insurance company. It allows you to make a charitable gift today, while providing you with a guaranteed fixed income for the rest of your life, or a specified number of years. Source: Unicef

  • March of Dimes Canada
    A charitable gift annuity allows you to make a significant gift to March of Dimes while at the same time receiving a guaranteed, pre - determined annuity payment - possibly for life. A charitable gift annuity may be attractive to you if you are a conservative investor 65 years of age or older because they represent safe investments that offer significantly higher returns than you could receive through Guaranteed Investment Certificates (GICs). Source: March of Dimes
Phil Barker

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Phil Barker

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