GIFT ANNUITY A gift annuity is a contract between you and the charity you have selected. According to the contract, you agree to donate a certain amount of cash or property (stocks, bonds, etc.), and the charity agrees to pay you a fixed annuity, either monthly or quarterly, for the remainder of your life, or the combined lives of you and your spouse. The charity then invests your gift and pays you the annuity. Upon your death, and that of your spouse, if applicable, the charity receives the balance from the investment of your gift. Because a gift annuity is a contract between two parties, it can only be used to benefit one charity. Additionally, you are only able to get a partial income tax deduction when the gift is made because you are receiving part of the gift back in the form of the annuity. This is also the case with any capital gains tax that might be generated from the sale of your gift by the charity. Similar to the CRT, gifting the cash or property to the charity removes a large amount of money or property from your estate, thereby reducing the estate taxes due at your death.