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PG Calc Feature Articles

New Ruling from IRS Offers 5% Solution for CRATs

The persistently low IRS discount rates over the past five years has had a chilling effect on charitable remainder annuity trusts (CRATs). One reason is that these low rates have made 1-life CRATs unavailable for beneficiaries younger than their early 70s. Beneficiaries of 2-life CRATs must be even older. The roadblock has been the 5% probability of exhaustion test.

Poof! Tax Concerns That Vanish with Gifts Made upon Death

A donor who is thinking of making certain gifts during life needs to pay attention to various requirements to ensure he can claim an income tax charitable deduction. When the same gifts are made upon death, however, these same requirements do not apply – or at least not in the same way.

Why Analytics for Planned Giving Saves Time and Raises More Money

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.

How to Get Volunteers Talking About Bequests

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.

Gift Annuity Programs: To Start, Re-Start, or Not to Start... These Are the Questions

The decision to start a gift annuity program should not be taken lightly. With gift annuities, you are entering into a life-long relationship with your donor, and there are significant legal and financial obligations that accompany it. It is not unusual for charities that have recently launched a gift annuity program to find that the results have not met expectations due to insufficient planning or resources.

Gift Annuity Risk - Keeping On Your Toes

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.

Your Best Donors Are Hiding In Plain Sight

The most successful development programs identify donors who want to give more – and then show them how to do it! All of our organizations have such donors. Finding these donors is often done through qualifying visits and years of cultivation. The process is time consuming, costly, and somewhat inefficient – but often necessary. Many organizations fail to recognize and act on the opportunities for major and planned gifts from donors who can – and want to - give more. Yet, these donors are hiding in plain sight. Why, then, do so many development programs pay so little attention to these donors?

Planned Giving In a Volatile Market

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.

Why is the Discount Rate So Low? (And does it Really Matter?)

Gift planning professionals devote much of their time to creating attractive gift arrangements that offer significant benefits, both to the donors who provide the funding, and to the charitable organizations named in the gifts. Life income gifts, in particular, provide the donors with charitable deductions, income for life and / or a period of years, and the satisfaction of knowing they have supported a charitable organization in whose mission they believe. The amount of income resulting from a life income gift arrangement is fairly straightforward and depends on the amount of funding principal, the range of possible payout rates allowed by the IRS, the level of income appropriate for the underlying investments, and (for gift annuities) the ages of the beneficiaries.

What To Do With That Life Insurance Policy Where Premiums Are Still Owed?

What should your organization do with a life insurance policy on which premiums are still owed? This is a dilemma encountered by many non-profits from time to time. It arises in two instances:

1) When the non-profit is first offered a gift of a life insurance policy, and
2) When the non-profit is already the owner of a life insurance policy and for some reason finds itself paying the premiums.

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