Equip Yourself to Help Donors Plan for Retirement While Supporting Their Values
Deferred gift annuities (DGAs) can be a powerful tool for donors who want to align their long-term financial goals with their charitable interests. As a charitable fundraiser, you play a critical role in identifying when a DGA is a good fit—helping donors understand the impact they can make while securing income for the future.
Why DGAs Deserve a Place in Your Donor Conversations
For many donors in their 50s and early 60s, retirement is on the horizon. They’re still working and could benefit from additional income once they retire. A DGA lets them make a meaningful gift now, lock in a charitable deduction, and defer income until they need it the most.
You already know the basics of deferred gift annuities. What’s easy to overlook is how well they align with what many donors are thinking about: retirement, stability, timing, impact, and tax savings.
What are the benefits?
A DGA supports your donor’s values while offering long-term support to your mission. The charitable organization manages the annuity and invests the assets. After the donor or their loved one passes away, the remaining funds support the designated mission ensuring their legacy continues.
Donors receive a charitable deduction in the year they make the gift—often when they’re in higher tax bracket. That can result in meaningful savings right away.
Because payments are deferred, donors may receive a higher income later*. This makes DGAs an appealing way to complement their retirement planning.
Donors choose when payments begin. If they’re unsure, a flexible deferred charitable gift annuity allows them to delay that decision giving them the flexibility they need to align the start date with retirement or other future needs.
Part of the annuity income may be tax-free for a period
Capital gains tax exposure may be reduced for gifts of appreciated assets
May help minimize estate or probate costs
* Payout rates are based on the age of the annuitant(s) and the date payments begin
Deferred Gift Annuities in Action
Michael is a 55-year-old technology consultant earning a high six-figure salary. He’s maxing out his 401(k), doesn’t need additional income today, but is concerned about taxes and wants to support a children’s health nonprofit that helped his niece. He plans to retire at age 67 and wants to secure additional income to supplement his retirement.
His advisor recommends funding a $50,000 DGA. Here’s what he accomplishes:
| Annuity Amount | $50,000 |
Charitable Tax Deduction |
$24,019 |
| Tax Savings on Deduction at 30% | $7,203 |
| Effective Cost of the Contract | $42,794 |
| ACGA Payout Rate | 10.3% |
| Annuity Payment | $5,150 |
| Expected Cumulative Payments | $113,300 |
Expected Gift to Charity (8.2% estimated investment return) |
$321,374 |
Expected Gift to Charity (6.6% estimated investment return) |
$127,057 |
The example used describes a hypothetical client experience for educational purposes only. Gift horizon is estimated at 34 years and payments are calculated assuming an annual payment frequency. Individual results and experiences will vary.
Michael benefits from a tax deduction, receives lifetime income, and creates a legacy that aligns with his values.
Is a DGA Right for Your Donor?
Ask yourself these questions to help identify if a DGA might be a good solution for your donor. Is your donor:
- Planning for retirement and exploring ways to supplement future income?
- Interested in benefiting from an immediate tax deduction?
- Looking for the security of fixed lifetime income?
- Thinking about how to balance generosity with financial confidence?
If the answer is “yes” to any of the above, a DGA may be right for your donor.
A DGA can be the perfect bridge. You don’t need to lead with technical terms, just connect the dots between your donor’s financial goals and their philanthropic vision.
Bridging Philanthropy and Planning
When you introduce a DGA, you’re helping donors make a smart financial decision—and a deeply meaningful one. It’s a conversation that connects purpose with planning and builds lasting support for the mission you represent.
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