CGAs are popular with older donors, who may fear outliving their money. By offering the donor fixed payments for life, the CGA can mitigate these concerns. Furthermore, they offer more certainty than other planned giving options like a charitable remainder trust, because they are not affected by market volatility. Nevertheless, CGAs are not risk-free. Most states do not regulate gift annuities, so the charity could receive the annuity funds, and spend them immediately. This may result in the charity being unable to meet its payment obligations in the future, or the charity could actually go bankrupt. Additionally, inflation may reduce the purchasing power of the fixed annuity payments. In short, advisers should investigate the financial health of the charity recommending a gift annuity.

Many charities offer variations on the traditional annuity. For example, a donor can opt to defer the income payments for several years, which results in larger sums when the annuity begins. Another popular option, dubbed the "college gift annuity," involves a donor naming a child or grandchild as the annuitant, with payments running for 4 years starting at age 18.

A charity incurs risk when offering gift annuities to donors. If donors outlive their life expectancy, the charities may receive a much smaller, or even nonexistent, benefit. Donors with charitable gift annuitants live longer, on average, then the IRS life tables. The charity can manage this risk by purchasing a commercial annuity on the donor's life, which essentially insures the annuity, but this reinsurance can be expensive.