PG Calc Featured Articles

No doubt, you have heard about looming changes threatening the long-established rules governing donor advised funds (DAFs). Some commentators are sounding the alarm. The Philanthropy Roundtable says the changes “would stifle charitable giving, harming those in need.” Others welcome the effort to free up charitable dollars they believe have been squirrelled away for far too long. We will leave the Wagnerian sturm und drang to others, but it is important to understand these proposals and what may be coming our way.

On June 9, 2021, Senator Angus King (I-ME) introduced Senate Bill 1981, the Accelerating Charitable Efforts Act (the “ACE Act”) with Senator Charles Grassley (R-IA) as a co-sponsor. The bill was referred to the Committee on Finance. As of this writing, there are no additional co-sponsors and no companion legislation in the House. Although legislative prognosticators give the ACE Act only a 1% chance of becoming law in its current form, parts of it could find their way into other legislation. In addition, the ACE Act is heating up long-simmering debates about donor advised funds and private foundations.

Although the ACE Act includes some significant changes to the private foundation rules, donor advised funds are the primary focus – some will say “target” – of the bill. Following is a summary of major provisions of the ACE Act that apply to donor advised funds.

The Council for the Advancement and Support of Education (CASE) has released its “Global Reporting Standards, 1st Edition.” The vision for the Standards is audacious: “the first truly worldwide standards for advancement in education.” True to its title, among the book’s 350+ pages are supplemental chapters that provide specific guidance for counting charitable gifts in six different countries around the globe.

Although the primary focus is to articulate standards for the counting and recognition of all types of charitable contributions that will facilitate comparisons among educational institutions worldwide, the Standards also cover a broad range of issues beyond counting and recognition. There are extensive sections on ethics and standards of practice for advancement professionals, as well as guidance for navigating issues involving donor control and the moral thickets that can arise when a donor’s nefarious past comes to light.

Even if your organization is not involved in the education sector, it behooves you to be familiar with the CASE Standards. 

The combination of extremely low monthly IRS discount rates, a stock market at or near record highs, and the possibility of increased estate taxation before the year is over creates ideal conditions for turning lead trust prospects into lead trust donors. Take advantage of the moment! Completing even a handful of lead trusts could make a big difference to the finances of your organization.

Non-grantor lead trusts offer wealthy individuals the opportunity to pass assets to their heirs at substantial tax savings while providing immediate benefits to one or more charities they care about. Grantor lead trusts offer a wider range of donors a tax-efficient way to fulfill multi-year pledges or to offset an income windfall while fulfilling their charitable wishes.

You work at a nonprofit that has an endowment. You know you should be part of the solution to grow it. Or perhaps you work at a nonprofit that doesn’t have an endowment, but you think it’s a missed opportunity that you want to rectify. What’s holding you back? What institutional decisions are making your job harder? How can you get on with the business of closing transformational gifts to your charity?

The intention here is to demystify endowments and set out some best practices for fundraising for them. This article is primarily aimed at fundraisers but does contain ideas that will require coordination and implementation from other areas of your charity.

In this article, Bill Laskin, PG Calc's Vice President of Product Management, explores the tax implications of the SECURE Act for IRAs and how that could impact gift planning.

IRS statistics indicate traditional IRAs held nearly $8 trillion in assets at the end of 2018, the latest year for which data is available. That is a huge potential source of charitable gifts. Any change that might increase the likelihood of gifts of IRA assets is enough to get gift planners excited, and rightly so.

The SECURE Act that was signed into law at the end of 2019 contained several provisions that drew the attention of gift planners. One provision of the Act was elimination of the so-called “stretch” IRA for most non-spouses. 

The SECURE Act significantly limited who can stretch payments from an inherited IRA over their life expectancy. Gift planners recognized that for charitably minded IRA owners, the elimination of the “stretch” IRA created an additional incentive to designate what is left in their IRA to one or more charities and use other funds to benefit their heirs.

As Charles Dickens wrote in his A Tale of Two Cities: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness.” Those words were written in 1859, but they could have been written yesterday.

How do we even begin to describe the year that was 2020? It was a year of so many extremes – a once-in-a-century pandemic, the most widely contested elections in U.S. history, unprecedented economic collapse, historic unemployment, tsunamis of misinformation and disinformation, and truly unimaginable levels of mistrust, suffering, and despair in the souls of people everywhere.

As of the writing of this article, the inauguration of Joseph R. Biden, Jr. as the 46th President of the United States is just days away. Although past changes in the balance of political power have had little impact on overall charitable giving, we know that when donors experience uncertainty they tend to postpone and delay their giving decisions. This is a natural reaction: charitable giving is optional and, faced with uncertainty, the rational choice is to slow down or defer giving until the future becomes clearer.

Changes in tax law can create new and different gift opportunities. Gift planners will need to watch carefully and be prepared to react strategically to changing circumstances. What concerns might surface among donors? Could potential changes affect donors’ gift plans? How might we anticipate and address them? In this article we begin with a review of some concerns that are likely to be on donors’ minds with respect to charitable giving followed by a discussion of some of the essential processes by which Washington works.

PG Calc speculates and offers commentary about impending changes to Federal tax policy and the possible impacts on charitable giving. However, written on the eve of America’s transition to the Biden/Harris administration and the beginning of the 117^th Congress, there’s a good chance that parts of it will pass into the category of "things we know for sure that just ain't so."

The global pandemic created by the spread of COVID-19 has impacted millions of lives, disrupted the operations of charities and organizations, and upended planned giving fundraising as we know it. Yet from this global crisis, we have witnessed several remarkable planned giving success stories from our clients. Following are four of these successes that we hope will prove educational and inspirational.

Unveiled at the CGP 2020 Conference this month, The National Standards for Gift Planning Success ("NSGPS" or "Standards") are designed to help you engineer a successful planned giving program. Much more than a just simple list of best practices, the NSGPS is a comprehensive toolkit to help identify and overcome challenges that may be hindering your gift planning efforts. The Standards are not prescriptive and are scalable to the size and maturity of your program, allowing you to adapt and address current needs while building on your strengths.