Help Life-Income Donors Contribute Their Annuity Payments to CharityHelp Life-Income Donors Contribute Their Annuity Payments to Charity

As noted in my December 2020 column, commuting a charitable lead trust (CLT) is an effective way to accelerate the good to be done by charity. A similar opportunity exists for life-income donors. By contributing the right to their annuity payments in full to charity, the remainder interest to charity is accelerated. Donors now will enjoy seeing their philanthropic intentions at work while alive.

The strong performance of the capital markets has likely improved the finances of many donors since their original funding of the gift annuity. The “wealth effect” of a portfolio having survived or prospered during the pandemic may leave the donor feeling less need for the income payments. Paying the 3.8% net investment income tax may also be a mo...