Charitable gift annuities are part-gift and part-annuity. You contribute assets to a qualified organization and receive a stream of cash flow in return. The amount you’d get generally is less than the payout would be from a commercial annuity. Because you receive less income, you are entitled to a partial tax deduction upfront.
You can take the annuity payments immediately. If you are younger than age 60, you may decide to defer the annuity so the payments will be larger when they start to flow. If you are charitably-minded and you do not have a current need for the funds, a deferred annuity can make sense.
Some advisors prefers gift annuities to charitable remainder trusts, which also offer income as well as an upfront writeoff. Gift annuities can be done with as little as a few thousand dollars while charitable remainder trusts generally require $100,000 or more. The paperwork for gift annuities is very simple so there are no attorney fees to pay and no trust documents are required.