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eRate Newsletter | May 17, 2021


This Could be the Year of the Charitable Lead Trust

The combination of extremely low monthly IRS discount rates, a stock market at or near record highs, and the possibility of increased estate taxation before the year is over creates ideal conditions for turning lead trust prospects into lead trust donors. Take advantage of the moment! Completing even a handful of lead trusts could make a big difference to the finances of your organization.

Non-grantor lead trusts offer wealthy individuals the opportunity to pass assets to their heirs at substantial tax savings while providing immediate benefits to one or more charities they care about. Grantor lead trusts offer a wider range of donors a tax-efficient way to fulfill multi-year pledges or to offset an income windfall while fulfilling their charitable wishes.




Notice: To accommodate clients currently not able to view PG Calc webinars in a group, all registrants will receive a link to a recording of the webinar that they can share with colleagues at their organization. Ordinarily, the recording is available within 1-2 weeks of the live session. Alternatively, additional participants at the same organization who wish to attend the live session may do so for just $25 each.

A Case Study in Focused Donor Advised Fund Fundraising

Presented by
Renee Kurdzos

May 27, 2021
1:00 - 2:30 pm ET



GiftWrap Fundamentals

May 26-27, ONLINE (6 hours over 2 days)

PGM to PGM Anywhere FREE

June 3, ONLINE (90 Minutes)

PGM Anywhere and Charitable Remainder Trusts

June 8-9, ONLINE (4 hours over 2 days)

PGM to PGM Anywhere FREE

July 8, ONLINE (90 Minutes)


Quick Tip: Modeling Gift Annuities Funded with Cash and Appreciated Property in
PGM Anywhere

Most gift annuities are funded with cash. Some are funded with appreciated stock. A few are funded with a combination of the two. To illustrate the last of these situations, Planned Giving Manager (PGM desktop) lets you enter multiple property types: cash, long-term gain, and short-term gain property. We plan to add multiple property types to our online software, PGM Anywhere (PGMA), in the next few months. How do you illustrate these gift annuities in PGMA in the meantime?

  1. Combination of cash and long-term appreciated stock. Choose long-term gain property as the property type. Enter the sum of the cash and the fair market value of the stock as the value of property transferred. Enter the sum of the cash and the cost basis of the stock as the cost basis.
  2. Combination of cash and short-term appreciated stock. Choose short-term gain property as the property type. Enter the sum of the cash and the fair market value of the stock as the principal. Enter the sum of the cash and the cost basis of the stock as the cost basis. All reportable capital gain shown on presentations is short-term gain.
  3. Combination of short-term stock and long-term stock. Create separate illustrations for the short-term and long-term gain portions, respectively. If there is also cash in the mix, add the cash amount to the principal and cost basis used in one of the illustrations. Then, add the deductions, annuity amounts, tax-free amounts, and ordinary income amounts from the two illustrations together to determine their respective values. Keep the two reportable capital gain figures separate, since one will be short-term gain and the other long-term gain.

In those unusual cases when an annuity is funded with multiple property types, you can model nearly all the same calculations in PGM and in PGMA. Please call Client Services at 888-474-2252 or email if you have questions about these calculations.




From the PG Calc Blog: Proposed Changes to Capital Gains Tax Could Be a Big Boost to Giving

The American Families Plan proposed by the Biden Administration includes a major overhaul in the tax treatment of capital gains as a way to help pay for the cost of the Plan’s initiatives. It is far from certain that these tax changes will become law, but it is worth examining how they might affect the behavior of your donors if they do.


New York Maximum Annuity Rate Messages Added to PGM Anywhere and PGM Desktop

On April 15 PG Calc sent a message to all our clients alerting them that New York’s maximum annuity rates are currently lower than the suggested maximum annuity rates published by the American Council on Gift Annuities (ACGA) for many annuitant ages. In addition to sharing what we know about complying with the New York maximum rates, on May 6 we added a message about the New York rates to the PGM Anywhere login screen with a link to a thorough review of the issue. The next day, we released updates of PGM Anywhere and Planned Giving Manager that added messages about complying with New York maximum rates whenever you produce a Gift Annuity Agreement or Gift Annuity Disclosure Statement for a New York donor. These are the two places where our software asks for the donor’s state of residence.

As mentioned in our original message to clients, the ACGA is working closely with New York regulators and legislators to resolve the conflict between the ACGA’s and New York’s rate schedules through a change in New York’s statutes. We are following these developments closely and will keep you apprised as they progress.





ACGA Rates Will Stay the Same

The American Council on Gift Annuities announced on May 13th that it will not be changing its current suggested maximum gift annuity rates. This means that the current ACGA rates will remain in effect until further notice. The current ACGA rates went into effect on July 1, 2020.

Have You Participated in the ACGA’s Survey of Charitable Gift Annuities Yet?

The American Council on Gift Annuities’ (ACGA) Survey of Charitable Gift Annuities is the best source of data there is on gift annuities and gift annuity programs. Right now, the ACGA is conducting its latest nationwide survey of charitable gift annuity programs, and you can help! Please consider participating in this enormously valuable survey by June 15.

See our blog for more information and a link to the survey.

Software Training Schedule – Remainder of 2021

PG Calc’s software training dates for May through December have been posted on our website!

Here are some upcoming dates, which include some of our most popular training sessions:

GiftWrap Fundamentals May 26 - 27
PGM to PGM Anywhere June 3
PGM Anywhere and Charitable Remainder Trusts June 8 - 9
PGM to PGM Anywhere July 8
GiftWrap Advanced Reporting July 13 - 14

We hope you will join us soon at one of our software trainings!




Sometimes a Check Is Just a Check (and Not a QCD)

Here’s the story: a charitable organization receives a $50,000 check from a donor, and the check has the donor’s name at the top – but it also has the initials “IRA” right after the donor’s name. What does this mean? The donor has already discussed a charitable gift annuity with the gift planner, or maybe there is an application form for a gift annuity enclosed with the check (or both!). But we all know that donors cannot use Qualified Charitable Distributions (QCDs) from their IRAs to establish charitable gift annuities. The transfers must be for direct and outright gifts to qualifying charitable organizations. What should the gift planner do – send the check back to the donor?

There has been a lot of attention in recent years on the QCD provision for IRAs (also referred to as the “IRA Rollover”). This special rule allows donors who are at least 70 ½ years old to transfer up to $100,000 each calendar year from their IRAs directly to one or more qualifying charitable organizations; they do not get charitable income tax deductions for their gifts to charities, but the special treatment allows them to avoid any income tax on the withdrawal amounts.

It’s been a great concept going back many years, and charitable organizations have received a LOT of charitable gifts through this mechanism. But sometimes the focus on QCDs turns to fixation and near obsession; not every disbursement coming out of an IRA is necessarily related to a QCD transfer. It may walk like a duck and talk like a duck, but it’s not always a duck. And sometimes a check is just a check. For many owners of IRAs, their accounts include certain limited check-writing privileges. In this case, the donor likely used the IRA check for convenience. Instead of making a separate withdrawal from the IRA, and then writing a check for establishing the gift annuity, the donor simply took a shortcut – one that is perfectly valid.

Obviously, the situation requires a bit of communication with the donor; the gift planner should contact the donor and confirm that it was NOT intended to be a QCD. If the donor DID intend to use the QCD provision, there is a separate and extensive discussion process that needs to happen right away. But if the presumption was correct, as stated above, the gift can be treated simply as a cash-funded charitable gift annuity, and the usual process will apply.

The Legion of Christ Partners with PG Calc for its Endowment Sub-Accounting

“Since I started working with PG Calc in 2014, they’ve always come through for us. We partnered with them to do our endowment sub-accounting, because I know I can count on them to always do what needs to be done on time. The implementation process has been very straightforward and smooth, and they’re on target with all our reports. For me, working with PG Calc is more than a service – I consider it a partnership.”

Ignacio Bono
Fiduciary Services
The Legion of Christ Incorporated

Learn more about the Legion of Christ.

Learn more about PG Calc's Endowment Sub-Accounting Services.

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