Responding to the changing situation caused by the economy, a key nonprofit umbrella group today recommended that charities lower the amount of money that donors receive in exchange for creating charitable gift annuities.

To create an annuity, donors turn over cash, stock, or other assets to a charity; the charity then invests the assets and makes regular, guaranteed payments to the donor or another person named by the donor until their deaths. After the donors die, the charity keeps the remaining assets in the annuity.

The troubled economy — plus historically low federal interest rates — prompted the American Council on Gift Annuities to urge charities to change the amount that assets in gift annuities are expected to net annually, from 4.75 percent to 4.25 percent. The council also voted to encourage organizations to reduce the upper limit of annuity payments to donors 90 and older, from 10.5 percent of the value of their donated assets to 9.5 percent.

Nonprofit groups are not required to follow the council’s guidelines, but most organizations do.

The council said the change would become effective on February 1. It will lower the amount gift annuities pay to donors because the annuities are required by federal law to conform to an actuarially determined formula. The formula ensures that the annuity is invested in such a way that it can both meet the required payments to donors and have a healthy amount left over for charity at their death.

Frank Minton, a Seattle planned-giving expert who sits on the council’s board, said that, for most people who establish gift annuities, the change in their payments will be moderate. For example, under actuarial calculations, a 75-year-old donor who currently receives $6,700 annually on a $100,000 gift annuity would, with the change, receive $400 to $700 less each year for a new $100,000 annuity. The precise reduction at each age is currently being calculated by the council’s actuary. (The change will not affect gift annuities created before February 1.)

Mr. Minton said the primary reason behind the change is that the economic crisis has reduced the amount charities are able to earn when they invest annuity funds. In this environment, he added, it is necessary to decrease the rates to ensure that a substantial portion of annuities remain for charitable purposes.

The change was also motivated in part by the fact that federal interest rates, which are used to calculate charitable deductions for gift annuities, will drop to historically low levels in January. Under the new interest rates, gift annuities established by single donors under the age of 58 and couples aged 65 or younger would not produce the minimum required charitable deduction. The council’s change will remedy that situation, Mr. Minton said, even if the low interest rates persist for some time.

— Holly Hall