Yes, a CGA could make sense for some seniors. However, a true cost comparison requires you compare a CGA with the purchase of a private annuity. As you will see, the income stream will be lower under the CGA. That is because the charity is a partner in this transaction, and is required to receive a minimum payout after the last death (or term if a fixed number of years). This payout requirement effectively reduces the portion of the annuity income stream available to the senior.

As a result, the donor to a CGA should really have a charitable intent; in this case, it can be an excellent choice. Otherwise, a private annuity is likely the better choice from strictly a cash flow perspective. Also, unlike CDs and other assets in an investment portfolio, the annuity terminates at the last death (or term), and the funds are not available for leaving a legacy. If this is an important consideration for the senior, the annuity option is less appealing.

A CGA - Charitable Remainder Annuity is controlled by the charitable organization. They are responsible for the annuity payments, for all the costs in setting it up, and they often determine the percentage payment (although it is recommended to use the rates published by American Gift Council on Annuities). While there are details that can be negotiated, the money ultimately is in the control of the charity (they decide how to invest it or spend it) and the obligation to pay the annuity is a general obligation of the charity. So with an annuity, the charity can be confident that they will end up with the remainder (if any), but they bear the risk of investments and legal, accounting and investment costs.

A CRT - Charitable Remainder Trust, is a separate legal entity that enables the donor (or (a) trustee(s) appointed by the donor when setting up the trust) to retain some control over the funds - including how to invest it, etc. The obligation to pay resides solely with the trust (so if it ends up paying all the money out - or loosing it in a poor investment - there is noone else on the hook for paying the annuity payments). The trust (and therefore the donor) is responsible for the risks of investment and all costs, but the trustee (usually the donor) can choose (within the confines of the trust agreement) to change the beneficiary and the recipient charity(ies). The charity does not need to know about the trust - and often does not know.

Of course, as will all things, there are many other details and twists that can be added into these gift tools.

Foundation should be the named beneficiary in the gift annuity contract -- the remainder could then be placed into a donor advised fund (DAF) at the Foundation. The donor, as advisor to the fund, may then be able to change charitable beneficiary of the DAF, without changing the CGA contract.