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:

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.