The Charitable Gift Annuity is increasingly popular these days. Here’s how it works. Using the example of a donor with $100,000 of capital gains, advisor Ray Ferrara of ProVise Management in Clearwater, Florida, explains how two annuities differ, starting with an insurance-based annuity. Assuming a zero tax basis (stock held since the New York Jets last won the Super Bowl, in 1969), $20,000 in tax would be owed, leaving the donor with $80,000 to invest. In this scenario, a 70-year-old who bought a commercial annuity would probably end up with a payout of about $6,400 a year for the rest of his life. At death, whether he lived one month or many, the remaining funds would go to the insurance company.