We recently released our list of Top 40 Charitable Gift Annuities. Purchasing a charitable gift annuity allows you to help your favorite charity in the future while providing yourself with an income stream in retirement. In The Non Profit Times article “Annuity Donors Reportedly Getting Younger,” Mark Hrywna talks about the recent changes happening with charitable gift annuities. Unfortunately for charities, they have received less than 2/3 of the initial contributions to the annuities over the last five years. This is the lowest average in the past 20 years. There was only a 64% residuum for annuities that terminated in the last five years, according to the 2013 data collected by the American Council on Gift Annuities. In 1999, the percentage of initial annuity contributions remaining for charities was at a record high of 98%. 2013’s much lower average was driven by strong investment results.
The average age of people purchasing charitable gift annuities has gotten lower. It has gone from 79 years in 2009 down to 75 years in 2013. More women than men donate using charitable gift annuities, but the numbers are close at 57% for women and 43% for men. Most charitable gift annuities are immediate annuity products. Only 12% of these annuities are deferred annuity products, but it’s important to note that that percentage has doubled since 1994. Flexible deferred payment annuities have become increasing popular over the past few decades. One-third of charities offer flexible deferred payment annuities, where the annuitant is able to choose their payment start date at a time other than when the contract is issued. Back in 1999, only 5% of charities offered this type of deferred annuity. This year the American Council on Gift Annuities asked new questions in their Survey of Charitable Gift Annuities. This every other year survey now asks questions about how the Great Recession might have changed the charities’ risk management tactics. Eighteen percent of the charities are expanding the marketing for their gift annuities and 4% of the charities capped the highest payment rate for new annuity purchases.
The survey included responses from 378 different charities. The majority of these charities were colleges or universities, religious organizations, or hospital/health related charities. Charitable gift annuities are a good way to create a personal retirement income stream, while leaving money to your favorite charity. If you have any questions about charitable gift annuities, our Top 40 Charitable Gift Annuities page offers important information. An Annuity FYI expert can also help answer your annuity questions.
Written by Rachel Summit