An annuity in the context of pledges refers to a commitment made by a donor to contribute a specific sum of money in regular intervals over a set period of time rather than as a lump sum. This pledge can be structured in various forms, often involving payments made annually, semi-annually, or monthly.

Key Aspects of Annuity Pledges:

1. Scheduled Payments: The donor agrees to provide a consistent amount of money on predetermined dates, thus creating a reliable stream of income for the not-for-profit organization.

2. Duration: Annuity pledges can last for a specified number of years, for the lifetime of the donor, or until a certain condition is met.

3. Present Value Consideration: When recording an annuity pledge, the organization will typically calculate the present value of the future payments, discounted back to reflect what those future payments are worth in today's terms.

4. Tax Benefits: Donors may also find tax benefits associated with making annuity pledges, particularly if they are structured in alignment with specific tax laws.

Overall, annuity pledges are a financial tool that can benefit both the donor and the not-for-profit, allowing for planned giving over time.