What is a charitable gift annuity and how is it used in Ontario estate planning?

A charitable gift annuity is an arrangement, usually set up during your lifetime directly with a charity, where you give the charity a lump sum and, in exchange, receive a fixed income payment for the rest of your life, with the charity keeping whatever is left after your death. It's essentially a blend of a donation and a personal annuity: part of what you give funds your own guaranteed income stream, and the remainder ultimately supports the charity's work.

This is different from simply leaving the charity a gift in your will, since a charitable gift annuity starts benefiting you personally right away, during your lifetime, rather than only benefiting the charity after you die. Because these arrangements involve the charity itself acting somewhat like an insurer, they're typically only offered by larger, established charities with the infrastructure to manage that risk, and the specific terms, including payment amount and any tax receipt involved, vary by organization.

If a steady income stream alongside eventual charitable support appeals to you, ask charities you already support whether they offer a gift annuity program, and involve a lawyer or financial advisor in reviewing the terms alongside your broader estate plan before committing.