A charitable gift annuity is a contract between a charity and a donor under which the charity agrees to pay the donor (or other person) an annuity for life. (See Ready Reference Page: “Primer on Planned Giving Instruments.”) It is a general obligation of the charity, and although some states require certain reserve funds to be established, is only as secure as the financial position of the charity. They are not guaranteed by any governmental entity if the charity goes under. You should get a disclosure statement that gives you information on the financial condition of the charity before you participate in the plan. With organizations of sufficient financial strength, a gift annuity can be a very appropriate transaction.