From the Blog: Understanding FASB Valuations and Their Role in Your Financials

Previously, we’ve discussed the range of approaches to contribution valuation:

• Deduction – The value of the charitable contribution income tax deduction.
• Counting – The value for the purposes of donor recognition and fundraising reporting.
• Economic – The value of the charitable work that will be accomplished by the contribution when it becomes fully available to the organization.

In this post we’re focusing on the value reported on the formal financial statements of your organization, commonly referred to as the “FASB valuation.” Most of us wrestle with FASB requirements once a year when the business office calls during the annual financial audit. Nevertheless, it is helpful to understand the FASB valuation and the variables that affect it.

Read the blog post...

… And Another Thing About FASB: Liability Calculations Reminder

Summer is the season of fireworks and backyard barbeques, but if your charity’s fiscal year ends on June 30th, summer is also the season for meeting with your auditors. Many of our clients will soon be fielding their auditor’s requests for planned gift liability calculations. These liabilities are used to satisfy the Financial Accounting Standards Board (FASB) requirement that charities include planned gift liabilities in their annual financial statements. While this annual ritual has all the appeal of hornets at a picnic, PG Calc has software and services that take the sting out of the calculation.

GiftWrap, PG Calc's gift administration software, lets you run a large group of FASB liabilities at one time with just the touch of a button. If your charity is trying to decide whether to move to the newly released IRS 2010CM table or to the insurance industry’s most current mortality table, 2012 IAR, GiftWrap makes a quick comparison easy to perform. Clients choosing an IRS mortality table also have the option of using Planned Giving Manager desktop or PGM Anywhere to compute liabilities for each standard planned gift in their program. Full details on how to compute FASB liabilities can be found in each software’s Help Index under FASB. Lastly, PG Calc offers a FASB Liability Calculation Service for a fee, and you can receive a quote for this service by emailing support@pgcalc.com.

New ACGA Rates Added to PG Calc Software; Table 2010CM Coming Soon

As promised in last month’s eRate, on June 2 we released updates of PGM Anywhere, PGM desktop, and GiftCalcs that added the new American Council on Gift Annuities (ACGA) suggested maximum annuity rates. The new rates go into effect July 1, 2022. If your PGM Anywhere or GiftCalcs account is set up to use the current ACGA rates, they will automatically select the new ACGA rate for gifts made on or after July 1, 2022 and the current ACGA rates for gifts made from July 1, 2020 through June 30, 2022. PGM desktop will do the same once you have installed the PGM 7.5H update. See our analysis of the new rates here.

We plan to update each of these three applications again, shortly. This update will add the new mortality table, 2010CM, published by the IRS in proposed regulations in early May. Until the regulations are finalized, donors will be able to use either 2010CM or 2000CM to compute the deduction for most planned gifts made on or after January 1, 2021. PGM Anywhere and PGM desktop (once updated to PGM 7.6) will let you choose which table to use whenever you enter a gift date on or after January 1, 2021. GiftCalcs will use 2000CM for all gifts except lead trusts and 2010CM for lead trusts; this approach will maximize the deduction in every case. Go here for our analysis of 2010CM and guidance on which mortality table to use when.

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

Some New York Maximum Annuity Rates Likely to Remain Lower than ACGA Rates Into 2023

New York is the only state that issues maximum allowable gift annuity payout rates for its residents, and this has created headaches for charities soliciting gifts from New York state residents. Since New York instituted a new method for determining its maximum annuity rates in 2020, New York maximum rates have tended to be lower than the ACGA rates for some male ages and more female ages. New York updates its maximum annuity rates quarterly.

PG Calc has been anticipating that the New York legislature would pass a change in the law governing how it computes its maximum gift annuity rates that would make it very unlikely for New York’s rates to be lower than the ACGA’s rates at any male or female age. The New York Senate passed this legislation in May, but it remains in committee in the New York Assembly. The New York Legislature is out of session until January 2023, so it looks like gift planners with New York donors will need to cope with the current situation for a while to come.

In the meantime, New York will continue to publish quarterly updates to its maximum allowable rates for single-life immediate payment charitable gift annuities on their website. The most current rate schedule can be found here:

https://www.dfs.ny.gov/system/files/documents/2022/04/gift3_2022_q2.pdf

Because New York does not publish maximum allowable rates for either two-life immediate annuities, or for one- or two-life deferred annuities, PG Calc clients can continue to use our free calculation service for determining New York’s maximum annuity rate in these cases by completing the form located here.

Free PG Calc Webinar Next Week on June 22: Implications of the New IRS Mortality Table and New ACGA Rates

Join us for a FREE webinar next week on June 22 at 1:00 ET where we will discuss the implications for gift planning of the IRS’s new 2010CM mortality table. We will also discuss the new suggested maximum annuity rates published by the American Council on Gift Annuities that will go into effect July 1.

Questions we will answer include:

• What role does 2010CM play in planned gift calculations?
• How much of a difference does 2010CM make versus the 2000CM table we’ve been using since July 2009?
• When does it make sense to choose 2010CM and when does it make sense to choose 2000CM?
• How much will the new ACGA rates change and how will that affect deduction amounts and the tax-free portions of the annuity?

We will also leave plenty of time at the end for questions from you. Don’t miss this opportunity to get up to speed on these important changes in gift planning. Space is limited. Register today!

Increased Security and Enhancements for PGM Anywhere, PGM desktop, Bequest Manager, and GiftWrap Lead to Modest Cost Increase

During the pandemic, PG Calc was proud to be able to keep our software pricing flat and help empower the many charities that rely on us for the success of their planned giving programs as they faced unprecedented challenges created by the pandemic. During the past three years, PG Calc has not stood still as we continued to update and improve our software. We have made major investments in the security of our software, in the hardware it runs on, and in our staffing with the understanding that security and data integrity are at the heart of what we all do in planned giving.

These improvements have come at a significant price, and we are now obliged to pass some of those costs on to our clients in order to ensure we can continue to provide the same level of service and security you expect from us. However, we have done our utmost to keep these increases to a minimum. We will be emailing those of you impacted by the cost changes over the next few weeks to outline the exact implications. 

Hey There – We’ve Been Everywhere!

PG Calc has enthusiastically rejoined the world of in-person conferences over the past two months. We attended the Philanthropic Planning Group of Greater New York's Planned Giving Day earlier this spring, the Planned Giving Group of New England’s All-Day Conference in Boston in early May; the Western Regional Planned Giving Conference in Costa Mesa, California, at the end of May; and the Washington DC All-Day Planned Giving Conference in early June. All of these conferences were well-attended and highly successful; it felt like everyone has been eager to get out and about.

It was great to see so many clients and friends we have missed over the past 2½ years. There’s nothing quite like having the chance to speak face to face, and the experiences have been heartwarming. It was a thrill to see so many familiar smiling faces and share so many warm memories. We enjoyed meeting new friends, as well. We’ve had hundreds of conversations with the good folks attending these conferences, and we look forward to joining some additional in-person conferences later this year!

PG Calc Makes Annual Filing a Breeze for National Catholic Community Foundation

“Our organization has been working with Edie Matulka and PG Calc for over three years. The annual filing service at PG Calc has been a tremendous help to us for our charitable gift annuity program. Edie stays on top of all the required deadlines and ensures we are meeting state requirements. Edie is always available to answer questions and is very knowledgeable and professional. We have a small operational staff at our organization and offer charitable gift annuities in forty-nine states. We could not be efficient without the help of Edie and her team. I would highly recommend the annual filing system at PG Calc and Edie Matulka. PG Calc has helped us to grow our charitable gift annuity program through the many services they offer.”

—Renee Fusick, 
Director of NCCF

Learn more about National Catholic Community Foundation.

Learn more about PG Calc's CGA Annual Filing Service.