GiftWrap Quick Tip: Year End Update is Required in GiftWrap

GiftWrap data is maintained according to specific calendar years. Current-year payment information, as well as payment information for previous years, is generally available, but payment rows for future years are not yet created. This is because it’s impossible to predict which annuitants and beneficiaries will be alive in the coming years, and which ones will be deceased. As the current year draws to a close, a straightforward and necessary process is required in GiftWrap in order to review or process payments in a new calendar year. This process is also required to produce tax-reporting documents for the current year.

The function is called “Year End Update,” and it is found in the Actions menu. It’s very simple to run, but a word of caution: ideally, Year End Update should only be run after the Verify routine has been run and all errors have been resolved. With that in mind, the Year End Update function basically involves confirming that you are in a current year and that you want to update to the next calendar year. When this process is run, all payment rows for the new year will be created. In addition, it will now be possible to produce 1099-Rs for gift annuitants and K-1s for pooled income fund participants for the previous calendar year. Generally speaking, the Year End Update process takes only a minute or two, except for very large programs. GiftWrap clients can find more information in the “Year End Operations and 1099-R Instructions” sent on December 13.

Contact our Client Services team at 888-474-2252 or support@pgcalc.com if we can help.

From the Blog: The Donor Must Be the Owner

We frequently work to assist our clients in situations involving married couples. In some cases, the spouses are looking to establish a 2-life charitable gift annuity (CGA), whereby they will both be donors and they will both be beneficiaries (annuitants). There is no issue with potential gift tax consequences in cases where the couple’s marriage is recognized by federal law – such spouses may transfer unlimited amounts of wealth to each other without any possible gift tax. And if the CGA is funded with cash, there also is no issue with possible income tax, because there are no capital gains involved in the transfer of cash. If the gift annuity is funded with appreciated securities, however, there can be significant tax issues tied to the long-term capital gains inherent in the appreciated securities.

Read the blog post . . .

ACGA Rates Will Remain the Same

The American Council on Gift Annuities (ACGA) announced in October that it will not be changing its suggested maximum annuity rates. The ACGA noted at the time that the yield on 10-Year Treasury bonds, 30-year fixed mortgages, and other longer duration debt instruments had moved up even though the Fed had reduced its benchmark short-term rate. Ordinarily, when the ACGA adjusts its suggested maximum annuity rates it does so effective either January 1 or July 1 of the year. So, it appears likely that the current ACGA rates, which became effective on January 1, 2024, will remain in effect until at least July 2025.

Valuation Rate for New PIFs Will Be 4.0% in 2025

Pooled income fund (PIF) deductions are computed using a valuation rate rather than the monthly IRS discount rate. The applicable valuation rate depends on the age and investment history of the fund.

The mandated valuation rate for gifts to funds less than three taxable years old has been 3.8% in 2024. It will increase to 4.0% in 2025. This rate equals the highest annual average monthly IRS discount rate over the prior three years, rounded to the nearest 0.2% and reduced by 1.0%.

The valuation rate for gifts to funds more than three taxable years old is the fund’s highest annual rate of return in the prior three years. This rate of return must be computed as described in Treasury Regulations 1.642-6(c)(2) and 1.642-6(c)(3).

The higher the valuation rate, the lower the donor’s deduction for a gift to a pooled income fund.

Contact Client Services at support@pgcalc.com or 888-474-2252 if you have any questions.

New Find Best Asset Website Widget Is Available for Your Website

We have developed a Find Best Asset webtool or widget that will help donors determine what asset type may make the most sense for them to donate based on their circumstances. The widget is based on our popular “Find Best Asset” decision trees.

Designed as a seamless plug-in for your planned giving website, the widget asks donors a series of simple questions, then uses the answers to recommend the best asset for them to use to fund an outright gift or charitable gift annuity: cash, appreciated securities, or a qualified charitable distribution (QCD). It’s a great way to get your donors thinking about different types of assets they could donate and start gift conversations.

PG Calc Marketing Services clients who have one of our planned giving websites can activate the widget on their site – contact your account manger to get started. Anyone else can add this plug-in widget to their existing website.

Click here to talk to us about how.

You can also learn about our other widgets: GiftCalcs gift calculator, Make a QCD widget, Donate From Your DAF widget, and Find Best Gift recommendation engine.

PG Calc Is Ready for the Holidays and Your Year-End Questions

The holidays mark the end of the year for many, as well as one of the busiest times of year for fundraisers. As always, PG Calc is here for the holidays and stands ready to help with your year-end questions.

Our Client Services team will be available the last two weeks of December during our regular weekday support hours from 8:30 am – 6:00 pm ET, except for December 24, when we will close at 1:00 pm ET, and December 25 and January 1, when we are closed for the day. Don’t hesitate to call us if you need help with our software or if you simply want to discuss a particular gift plan.

Contact Client Services at 888-474-2252 or support@pgcalc.com.

Helping Donors Understand Year-End Deadlines

While many donors think December 31 definitively ends the year, it is important to help them understand that many end-of-year gifts – particularly some planned gifts – require taking action well before the last day of the year to count for tax purposes.

We have developed this article to help better understand what needs to happen when for many common gift types, including gifts of:

• Cash (check and wire)
• Stock
• Mutual Funds
• Credit Card
• IRA QCD

Year-End Giving: Deciphering Gift Dates

Two-Factor Authentication May Require iOS update

Two-Factor Authentication (2FA) is available as an optional security feature for both PGM Anywhere and GiftWrap through the Duo Mobile app (Duo is a Cisco company). Clients who add on this feature can either use the app on their phone to confirm their identity or elect to receive a phone call with a code they enter online. For those who use the phone app, it is important to verify that your phone is using iOS 16 or higher. Duo Mobile has released new guidance that February 17, 2025 will be the last day of support for Duo Mobile on iOS 15. The reason for this change is that Apple stopped support for iOS 15 as of September 16, 2024. Clients who have phones that cannot support iOS 16 or higher can still use 2FA with either PGM Anywhere or GiftWrap by electing the option to receive a code via a phone message.

Contact Client Services at support@pgcalc.com or 888-474-2252 if you have any questions.

American Friends of Magen David Adom Closes an FGA with Expert Help from PG Calc’s Client Services Team

“Kudos to Kara [Kara Morin is PG Calc Senior Director of Planned Giving Services] who took the time to walk me through a Flexible Gift Annuity! With her guidance and comprehensive tutorial, I was able to secure a new donor and close a new CGA.”

-- Marilyn Stern Emas
Director of Estate and Planned Giving
American Friends of Magen David Adom

Learn more about American Friends of Magen David Adom.

Learn about PG Calc’s spectacular Client Services team.