Annuities✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A charitable gift annuity is an arrangement under which a donor:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A charitable gift annuity is a contract between a donor and a charity under which the donor transfers cash or other assets to the charity, and the charity promises to pay the donor, and often a second annuitant, a fixed amount for life. Part of the transfer is treated as a charitable contribution and part as the purchase of an annuity. The donor receives a charitable income tax deduction for the gift portion and annuity payments from the balance, making it both a giving technique and a lifetime income arrangement.
Why the other options are wrong
- B) A life insurance policy naming a charity as beneficiary is a charitable giving technique, but it is not a charitable gift annuity.
- C) A loan to a charity creates an obligation to repay principal and interest, not a lifetime annuity income stream.
- D) Donating appreciated stock describes a contribution of property, not the annuity-income structure of a gift annuity.
Memory hook
Gift annuity = hand the charity the money now, get a lifetime paycheck from the charity: part gift, part annuity.