Charitable Gift Agreements

Charitable giving is an excellent way to put your wealth to good use and help those in need. Charitable gift agreements, commonly referred to as CGAs, are legal documents that donors can create to transfer assets to a charity. These agreements can help donors maximize their tax savings, provide a stream of income, and support their philanthropic causes.

A CGA is a contractual agreement between a donor and a charity. It allows the donor to transfer assets such as cash, stocks, real estate, or other property to the charity in exchange for an income stream or other benefits. The charity agrees to use the assets for a specific charitable purpose.

CGAs are typically structured in two ways: a charitable gift annuity or a charitable remainder trust. A charitable gift annuity is a contract between a donor and a charity where the donor makes an irrevocable donation in exchange for a fixed income stream for life. The charity retains ownership of the assets, and upon the donor`s death, the assets go to the charity.

On the other hand, a charitable remainder trust is a legal entity that allows donors to transfer assets to a trust in exchange for an income stream. The trust pays the donor or their chosen beneficiaries for a set period, after which the remaining assets are donated to the charity of their choice.

CGAs come with several benefits for both donors and charities. The donor can receive a tax deduction for the charitable contribution of the assets, reduce their estate taxes, and receive a stream of income for life or a set period. Additionally, CGAs allow donors to make a more significant impact on their chosen charities, ensuring their charitable goals and values are carried forward well into the future.

Charities can also benefit from CGAs by receiving significant funds from donors, increasing their donor base, and ensuring long-term sustainability. Moreover, CGAs allow charities to be more financially stable and to diversify their funding sources.

In conclusion, CGAs can be a beneficial tool for donors and charities alike. They help donors achieve their charitable objectives while also providing tax benefits and income streams. For charities, these agreements provide a source of sustainable funding, enabling them to carry on their philanthropic work for years to come. As a result, donors and charities should consider CGAs as an excellent way to support their philanthropic goals while also ensuring their financial wellbeing.