Thriving annuities – Stock market, specialists boost returns

The average dollar value of charitable gift annuities was $30,182 in 1999 – a 59 percent increase from five years ago, the Chronicle of Philanthropy reports.

Gift annuities allow donors to give cash or other assets to charity in exchange for fixed payments. The charity receives a remainder of the initial gift, usually upon the donor’s death, the Chronicle reports.

Although the American Council on Gift Annuities recommends that charities should receive 50 percent of the initial gift, a council survey found that in 1999 charities retained an average of 97.5 percent of donors’ initial contributions, the Chronicle says.

Officials credit the recent strength of the stock market for higher charitable returns on annuity assets.

The survey found that charities are increasingly turning to outside investment managers to invest annuity assets. In 1999, more than 55 percent of assets were handled exclusively by outside investment managers.

Charities that use outside investment managers have consistently higher returns on their annuity asset investments, the Chronicle reports.

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