PG Calc Featured Articles

Manager – calls PG Calc Support and asks if there is something wrong with the calculations for deferred charitable gift annuities. “How can the payout rates possibly be as high as 15 or 20% - surely that’s a mistake! Is there something wrong with the software? If not, then, does anybody really write these annuities?”

It turns out there is nothing wrong with the software – the payout rates, as they are expressed, are correct. And yes, charities really do issue these annuities. The problem is in the way the payout rates are quoted. There is an enormous difference between the nominal payout rate of a deferred gift annuity and the effective payout rate of a deferred gift annuity. Let’s take a closer look at how these payout rates work and try to make some sense of it.

The challenge grant has been a cornerstone of fundraising for major and annual gifts for many years.  Typically challenge grants are structured so that a foundation (or other grant maker) makes a gift to charity upon the charity raising an agreed upon amount of money. Challenge grants have helped nonprofits raise money for capital campaigns and meet other fundraising goals. 

Your planned giving website matters in more ways than you can imagine. It has a tremendous impact on how your planned giving program is perceived, and thus, it can be a benefit or detriment.

The year ending December 31, 2015 was historic and monumental - the earth shifted violently beneath our feet, rivers changed courses, truisms were shattered, and fear was pervasive. Desperate times drove desperate actions, and good men and women scrambled in panic to find stable ground. It suddenly seemed that nothing was safe anymore. No, we’re not talking about the presidential race – we’re talking about the U.S. stock market. For the first time in seven years, the stock market didn’t end the year ahead of where it started. Of the three major U.S. stock indices, two of them ended the year below their price levels on January 1. Flashbacks to 2008 and the Great Recession ensue.

During the downturn in the stock market in late 2008, many charities monitored their gift annuity reserve fund balances on a weekly or even daily basis, concerned that there were sufficient reserves to meet the requirements of states with a calendar year reporting period. But the uncertainty brought by the financial turmoil of the “great recession” had at least one positive effect, prompting charities to take a more detailed look at their gift annuity programs, either through an internal review or by hiring an outside consultant. For some, this was the first time a thorough review of the program had been done.

There is a lot of talk now in the planned giving community about charitable gifts being made from IRAs (“Individual Retirement Accounts”). In 2006, Congress passed legislation allowing tax-free rollovers from a donor’s IRA to qualified charities. The charitable IRA rollover is one of a number of temporary tax provisions that require annual renewal. These temporary tax provisions are typically extended late in the year and made retroactive to the beginning of that year.

Labor Day signals the end of summer, but it also signals the approach of the season of giving.  The last quarter of the year is a busy time in fundraising.  Most charities see a significant uptick in giving as December 31 approaches.  So how does year-end giving affect planned giving, and how do you make the case that the end of the year is a good time to make all sorts of gifts?

This document is derived from one we created for a consulting client. In conversations with that client we wanted to ensure that they were augmenting an excellent marketing effort with on-the-ground cultivation and solicitation. To add to the ranks of a bequest society, a planned giving officer often needs volunteers to help, and volunteers are more willing if they are informed enough to be comfortable. The best volunteer solicitors are ones who have made a gift, but there is still a gulf between making a gift and feeling prepared to ask another to do the same.

Analytics, or the discovery and use of meaningful patterns in data, can be one of the most powerful tools at your disposal to refine your marketing efforts. Analytics helps predict individuals’ behavior, for example finding prospects most likely to make a planned gift. When you are preparing for a big campaign, or anytime you are faced with a large list of prospects, analytics can identify people you might have passed over as well as those with whom you should not waste time. In short, marketing informed by donor analytics will be more successful and more cost effective.

We have responded to many more client inquiries about charitable lead trusts over the past two years than any other two year period in our 25-year history.  We have also noticed a flurry of articles on lead trusts during this same period.

A particular lead trust variation that has received considerable attention lately is what some practitioners are calling the "Shark Fin" lead trust. You may have also seen the term "Balloon" lead trust mentioned.  Two names, same trust.