PG Calc Featured Articles

Revocation Language in CGA Agreements - To Include or Not To Include

Including revocation language serves two purposes. First, it may enable the donor to avoid making a taxable gift to the annuitant. Second, it preserves flexibility in the event of a change in circumstances, such as the dissolution of a marriage. The decision on whether to include the revocation language is ultimately the donor’s, but it is helpful if the charity understands the issues to help inform that decision. 

Surrendering an Income Interest in a Life Income Gift (Including Partial Surrender)

By their nature, life income gifts (Charitable Gift Annuities, charitable remainder trusts, and pooled income funds) are arrangements where the donor transfers assets now, but delays the charity’s use of the funds until a future date, normally the death of one or more income beneficiaries. A charitable remainder trust can be established for a term of years, but until the expiration of what can be a term of up to twenty years, the assets of the trust are unavailable to charity.

Missing Persons and Uncashed Checks

One of the most frequent challenges encountered in the administration of life income gifts is the issue of uncashed checks. The typical response to an uncashed check is to place a stop payment on the check after a specific period of time, and to reissue payment in the form of a replacement check. If the replacement check is cashed within a reasonable period of time, it is assumed that the original uncashed check was just an anomaly and no further action is required. But what happens when the replacement check, and subsequent checks are not cashed?  This article addresses what a charity should do when a beneficiary stops cashing life income payments.

Funding CGAs with Mutual Funds (What Is the Problem?)

Mutual funds are easy to purchase, simple to understand, and they allow for continual reinvestment of income over the long run. As planned gift donors review their financial assets and determine which ones to use as the funding for charitable gift annuities, mutual funds present an obvious choice. But gift planners should be aware of some particular aspects of mutual funds that can cause significant complications in the process.  Read about the complexities in mutual funds transactions and tax accounting.

When a Donor Walks Away from a Gift (and the Charity Benefits!)

Have you ever hoped that a donor would walk away from a gift? Why would any gift officer want that, unless perhaps the charity was at some risk of liability as a result of accepting the gift? Your goal is to close gifts – to cultivate and engage the donor with the hope of a (big) gift.  Read about various scenarios in which walking away from a gift makes sense for both parties.

Donor-Advised Funds: The Do's and (Mostly) Dont's

The extraordinary popularity of donor-advised funds (DAFs) in philanthropy has resulted in non-profits receiving increasingly generous grants from these funds, now estimated to be in the billions of dollars annually. The expanding role of DAFs has not gone unnoticed by the IRS, however, whose watchful eye has turned to these funds and the charities receiving grants. Read this featured article and find about the IRS regulations regarding grants from donor-advised funds.

A New Mindset for Gifts of Real Estate

A gift of real estate can be one of the most generous gifts that a charitable organization will ever receive. Yet, many charities decline all proposed gifts of real estate, certain that Armageddon awaits as soon as they receive the deed. The reality is that with sound gift acceptance policies and by performing some basic due diligence, charities will most likely find that the gifts of real estate that they accept will bring in significant resources to fund compelling new initiatives. 

Taking the Temperature of Your Gift Annuity Program (And What To Do If It Is Unwell!)

Fundraisers consider a well-functioning gift annuity program the cornerstone of a robust planned gift fundraising effort.  Although bequests and beneficiary designations typically produce most of the realized planned gift revenue, offering gift annuities is usually the mark of a mature planned giving program.  Nonetheless, among those charities that have offered gift annuities, many frequently worry about the continued viability of offering them.

Oh, Those Pesky Capital Gains (The Consequences of Capital Gains in Planned Gifts)

Everyone likes to avoid capital gains – or more specifically, we should say, everyone likes to avoid the taxes on realized capital gains. That’s a given. When an investor sells assets that have appreciated over time, typically there is tax on the built-up appreciation in those holdings, at least by the federal government, and frequently by the state government as well. The owner of the stock reports capital gains even if the owner of the stock uses the sale proceeds immediately to make charitable gifts. On the other hand, if the donor uses appreciated assets for outright charitable gifts, there is no taxation on the long-term appreciation in the holdings.