Make the Most of Higher Interest Rates with the Charitable Gift Annuity
As interest rates rise, so does the appeal of the Charitable Gift Annuity (CGA). Higher interest rates mean more income for your donors! Although a rise in interest rates could prompt certain donors to scale back on annual contributions, higher rates can mean good news for your planned giving program as CGAs grow in popularity.
How CGAs Work
CGAs are a great way to give since they are beneficial for both the donor and the nonprofit. Donors receive two separate benefits. First, they receive a charitable deduction for the cash or assets they use to create the CGA, during the year they create it. Second, donors continue to receive income on the CGA throughout their lives. The remainder of the annuity will go to the nonprofit after the death of the donor.
Many nonprofits base their charitable gift annuity rates on those suggested by the American Council on Gift Annuities. The ACGA raised their rates a few months ago due to increasing interest rates across the board.
How to Talk About CGAs With Donors
Did you know the best way to get more CGAs is NOT talking about CGAs? Talk about your mission, that’s what brought the donor to you in the first place! Then you can bring up the impact that a charitable gift annuity and other planned gifts have on that mission.
When you have gotten to the heart of their relationship with your organization, then you can start talking about the details, including the benefits to the donor. This is a textbook example of one of our tenets: lead with inspiration, not information.
At Canopy, we supply customers with a series of brochures to share with their donors after they have shown some interest. Click here to download a free, simple brochure about CGAs.
No Capacity for CGAs?
If your organization isn’t currently able to administer a charitable gift annuity, it’s time to consider the possibilities. Many nonprofits partner with community foundations to offer gift annuities.
For more reading, here are some other resources that will help you think it through:
“Simple Steps to Start and Grow a Gift Annuity Program” Forbes, March 2022
“The Fundamentals of a Successful Charitable Annuity Program” ACGA
CGAs offer appealing results for both donors and nonprofits. Spread the word today!