At its Board meeting on November 21, 2022, the American Council on Gift Annuities (ACGA) agreed that interest rates have moved higher and the ACGA Board felt an increase to CGA rates would be warranted, effective January 1, 2023. See table below for updated rates.

1. CGAs Remain Attractive to Donors

  • The suggested maximum payout rates will be increasing by approximately .6%, depending on the age of the annuitant. For example, for a single-life annuitant age 79, which is the average age for annuitants at the time of gift, the annuity rate will increase from 6.8% to 7.4%.
  • When compared to other relatively low-risk, income-producing options, such as government debt securities, the rates available on a CGA contract remain a very attractive option, especially for donors who value the philanthropic aspect (of leaving the residuum to the sponsoring charity).
  • Along with the increases in interest rates, the IRS discount rate has also been increasing. The IRS discount rate is used in calculating the charitable deduction for donors in establishing new CGAs, and this is pertinent for taxpayers who itemize their tax deductions. Generally for those donors, the higher the discount rate, the higher the charitable deduction that is available and thus, larger up-front tax savings.
Income Method Income Rate
Single-Life CGA Contract (Age 61 and older) 5.0% to 9.7%
S&P 500® Dividend Yield[1] 1.56%
10-Year Treasury Note 3.70%
U.S. Money Market Fund Prime Retail Gross Yield[2] 3.34%

2. Finding the Right Approach With Donors

  • One approach is to focus on the charitable giving aspect of the CGA contract; for donors, it is essential to hear about the importance of what their gift will help accomplish at the charity.
  • Another approach is to focus on the income stability aspect of a CGA contract. Emphasize the fact that payments are fixed for life. Because the payout amount is based on the original gift value, the distribution to annuitants is not impacted by market volatility or other changes to the current value of the original gift. For individuals looking for this form of steady income stream, this could be a valuable aspect.
  • Another option would be to consider an estate planning use of the charitable gift annuity for beneficiaries or heirs. Notwithstanding certain exceptions such as a spousal beneficiary, existing legislation (the SECURE Act) requires that IRA or other qualified funds be distributed within 10 years of a decedents passing. Funding a gift annuity with remaining qualified funds would allow those assets to be stretched over the lifetime of the annuitants. The annuity rates in effect at the time of the gift annuity’s funding would apply.
  • As the market continues to be volatile, donors may be willing to initiate contracts using appreciated (or re-appreciated) securities. Being mindful of how donors might find it most advantageous to give, and especially how that might be different than in prior years, can help fundraisers to be successful. It is important to remember that cash is not the only way to fund a gift and that there can be material advantages to donors using appreciated assets.

The information set forth in this Planned Giving Flash Update is for informational and educational purposes only. It is not intended to be used or relied upon as legal advice or tax advice. Any clients or potential clients of PNC who desire to implement these strategies, should do so only after receiving advice from their independent tax and legal advisors, who should explain how these strategies may impact your individual situation and prepare the necessary documents and/or other items that are necessary to properly implement these strategies.

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The Endowment & Foundation National Practice Group

The Endowment & Foundation National Practice Group builds on our long-standing commitment to philanthropy and is focused on endowments, private and public foundations, and nonprofit organizations.  We seek to help these organizations address their distinct investment, distribution and capital preservation challenges.

For more information, contact Chris McGurn at or Henri Cancio-Fitzgerald at