As tax time approaches, many clients are wondering what to do with their most highly appreciated assets. If they are charitably minded, those assets can be converted into reliable streams of income.

“You are using assets, that ultimately find their way to a charity, to get income now,” says chartered financial analyst Lori Flexer of Ferguson Wellman Capital Management in Portland, Ore.

Two different kinds of charitable trusts can work, she says. A charitable remainder unitrust shifts more risk to the recipient charity, while a charitable remainder annuity trust leaves more risk with the giver.

Flexer used the following example of an older client who owned a highly appreciated gas station valued at about $1.8 million. He used a charitable remainder unitrust to donate the property to the Salvation Army. In return, under terms of the gift, he began receiving about 6% annually of the gas station’s value, or more than $100,000, for the rest of his life.

However, this kind of trust leaves the client exposed to some risk, Flexer says. Upon receiving the gift, the Salvation Army sold the gas station tax-free because it is a tax-exempt organization and began managing the money. Every year, the amount of the client’s annual income stream adjusts based on the updated value of that sum. If it increases, so does his annual income. However, if the amount falls in value, his income does as well, Flexer said.

The other option is a charitable gift annuity trust. Many large charities offer this option to donors. In this case, donors give assets or money to the charity in return for a guaranteed annual income stream, according to Flexer. In such cases, the burden falls on the charity to manage the money well. If it doesn’t and the value falls, the charity must continue to meet its annual income obligation to the donor until the principal is exhausted.

“That is the risk, the under water charitable gift annuity,” Flexer says. “Every institution that issues them has some on their books.” That’s why they tend to be offered only by larger organizations and not smaller nonprofits that can’t expose themselves to such risk.

Ever since the market downturn, the use of both trusts has changed, says Cheryl Barrett, an estate planning attorney at Ferruzzo Ferruzzo in Newport Beach, Calif. “Unitrusts were all the rage when the markets were doing great,” Barrett says, “and now people feel more comfortable with annuity trusts because they know that no matter how bad it gets they will get that amount.”

Ann Marsh writes for Financial Planning.