Today, many endowments, foundations, alumni associations and charitable organizations offer gift annuity programs as a tool to encourage people to donate funds.

The annuities used in these programs are designed so that the charity agrees to pay a stream of lifetime income to the donor in exchange for the charitable donation. Upon the donor's death, a portion of the donor's charitable contribution will be left over (a residuum) as a gift to the organization.

To administer these charitable gift annuity programs, the organizations must function in many ways like insurance companies, subjecting themselves to many of the same administrative, reporting and reserving requirements insurers face.* They also take on the investment and mortality risks usually assumed by insurers. 

To help minimize these administrative burdens and risks, many organizations "reinsure" their obligations under the gift annuities by purchasing either a commercial group annuity or a reinsurance agreement from an insurance company.

The Hartford¹ offers both of these solutions.