Overview
The Council for Advancement and Support of Education (CASE) publishes standards for reporting gifts made during a capital campaign (CASE Campaign Standards: Management and Reporting Standards for Educational Fund-Raising Campaigns, April 1994). These standards contain guidelines for crediting planned gifts of all kinds.
The CASE standards call for a Campaign Report I that uses three columns for reporting gifts plus a fourth and fifth column for reporting totals.
- Column I lists outright gifts and pledges at face value (which includes the first five years of lead trust payments)
- Column II lists deferred gifts at face value
- Column III lists deferred gifts at present value.
Column II entry for a deferred gift other than a lead trust
Enter the fair market value of the donated property on the date of gift. None of these gift plans requires entry of information in Column I.
Column I and II entries for a lead trust
CASE views lead trusts as immediate gifts in trust that pay over a period of time. Consequently, its standards call for lead trust credit amounts to be entered in Columns I and II.
Lead annuity trusts
Lead annuity trust crediting in these columns can be determined using a calculator.
- Enter in Column I the total of the payments that will be made in the first five years of the trust.
- Enter in Column II the total of the payments that will be made over the remaining term of the trust. This amount equals the total of the payments over the trust term minus the total of the payments made in the first five years.
Lead Unitrust
Calculating lead unitrust credit requires use of calculation software. PGM provides instructions. CASE standards instruct one to estimate the charitable payments the unitrust will make during its term by assuming that it will earn a total return equal to the Applicable Federal Rate (AFR) for the month of the gift. The total of the estimated payments during the first five years is entered in Column I and the total of the remaining estimated payments is entered in Column II.
Column III entries (present value)
In all cases, run use PGM to find the present value.
Gift annuity, charitable remainder trust, pooled income fund, retained life estate
Under the CASE standards, the contribution value of a gift annuity, charitable remainder annuity trust, charitable remainder unitrust, pooled income fund gift, or retained life estate (remainder interest in a personal residence or farm) equals the charitable deduction allowable under IRS rules. Therefore, to calculate the present value of any of these gifts for crediting purposes, simply enter the gift information into PGM as you would to calculate a charitable deduction. The charitable deduction number you find on the chart is the amount to enter in Column III.
Lead trust
Since CASE views the first five years of lead trust payments as current gifts, only the charitable payments made after the first five years are discounted for the purposes of Column III. To determine the present value of a lead trust, therefore, one must add the total of the payments to be made during the first five years of the trust to the present value of the payments to be made during years six and beyond. Determining the value of the first five years of payments is described above under Column I and II entries for a lead trust.
This calculation can be created in our Planned Giving Manager (PGM) software. If you are a PGM license holder, see the Help section in the software for more details.
