Why Are Gift Annuities So Popular with Women?

The majority of recipients of charitable gift annuity payments are women. Why should gift annuities have particular appeal to female supporters? Historically, the first recipient of a gift annuity, in the early 1830s, appears to have been a woman, and women continue to be in the forefront of donors who use gift annuities to support worthwhile organizations.

Many women like annuities because they provide a secure, fixed income for life, no matter how long they may live. Actuarial statistics tell us that women continue to live longer than men by roughly five years, so it’s all the more important for women to have “an income that a person cannot outlive.” Unlike commercial annuities, charitable gift annuities do not discriminate between men and women when it comes to payout rates: Women receive the same payments as men of identical ages from charitable gift annuities, and charitable deductions are equal, as well, even though women stand to receive more benefits over their longer life expectancies.

Women have also found creative ways to use gift annuities to help themselves, their families and important causes:

• Relief from low-interest CDs. Mrs. M, age 76, has a $20,000 CD that is maturing soon. She expects to get 2% interest on a new CD. Mrs. M also has long considered making an important gift. She decides to transfer the $20,000, at maturity, to a gift annuity that will pay her a larger amount than she received from her CD, and much of her payout will be partly tax free.

• Assistance for parents. The gift annuity can be a satisfying way for women to provide financial support for a parent or other family member.

• Providing for children. Mrs. P posed the question: “My son has not done a good job of saving for retirement and, frankly, is not a very good money manager. This concerns me. Could a gift annuity be helpful?” We replied that Mrs. P could provide her son with a good retirement income through a deferred payment gift annuity that would start paying him at age 65 (or some other age). Mrs. P would be entitled to a significant charitable deduction, as well.

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