Charitable Remainder Annuity Trust

We hear regularly from puzzled clients who want to understand why a charitable remainder annuity trust (CRAT) they have just calculated fails to qualify as a CRAT, but a charitable remainder unitrust (CRUT) with the same payout rate doesn't also fail.

For gift planning offices at most not-for-profit organizations (NFPs), FASB accounting is the last thing on the list. Activities are geared towards bringing in new planned gifts, ongoing administration, and donor stewardship. The financial office asks for a FASB liability report once a year (at a few NFPs, once a quarter). Someone in the gift planning office runs off a new report using similar assumptions to the previous year. If there is an outside gift administrator, they can be asked to produce the report.