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eRate Newsletter | April 16, 2020


Thinking Beyond the Pandemic - Peaks, Valleys, and Life in Between

At this point, we find ourselves in seemingly unprecedented times. The COVID-19 pandemic is sweeping the globe, infecting millions of people, and leaving hundreds of thousands of fatalities in its wake. The worst is likely over in China, and life is starting to return to some new kind of normal. In Europe, a few countries have reached the so-called apex, but other countries are at varying stages along the spectrum of the crisis. In the U.S., the picture changes greatly from state to state. By most accounts, New York – the first epicenter – has seen its peak of the crisis and is now on the downside, but the majority of states are still facing a significant ramping up in the coming days and weeks.

In this month's featured article, Jeffrey Frye, PG Calc Senior Client Services Advisor, offers some context, both historical and financial, when thinking about planned giving.



Notice: To accommodate clients currently not able to view PG Calc webinars in a group, all April webinar registrants will receive access to a replay of the webinar to share with colleagues within 2-3 weeks of the live session.

Understanding Tax Issues That Can Lead to Bigger Gifts

Presented by
Bill Laskin

April 30
1:00 - 2:30 pm ET



Classes in June and July are currently scheduled to be held. This is subject to change. If classes are canceled, registrants will be notified immediately, and will be able to reschedule for a future session or receive a refund.

PGM Anywhere and Gift Annuities

May 13-14, ONLINE

Lead Trust School and Planned Giving by the Numbers

June 18-19, Cambridge, MA


July 22-23, Cambridge, MA




Quick Tip: Monitoring CGA Reserve Balances

The volatility and uncertainty of market conditions in the first quarter of 2020 highlights the importance of regularly reviewing your gift annuity reserve balances in relation to state reserve requirements. While such reviews are always a best practice, they are now even more imperative – for all charities, but particularly for those that will have a state reporting due based on a June 30 fiscal year end.

Within GiftWrap, you can run a reserve calculation at any time for any date. For example, if you’ll be filing a June 30 annual report to Washington State, you can run a Washington-methodology reserve calculation today and specify the “valuation date” as 6/30/20. Interested in a longer term look at where you’ll need to be at calendar year end? You might opt to run a New York-methodology calculation as of 12/31/20. For an “at a glance” look at the full required reserve, be sure to select the applicable surplus so it will be added to the total.

Of course, any report run in advance of the actual valuation date can only calculate the reserve based on annuities in existence at the time the report is generated; the reserve amount will change if you issue additional annuities or have annuities terminate between then and the valuation date.

Reviewing your gift annuity reserves in advance of required reporting deadlines will either provide assurance that the reserve remains adequately funded, or allow time for any needed adjustments to be made should it be underfunded. Proactively infusing money into the reserve account before the reporting period end puts your organization in a much better position with state regulators than reacting to an underfunded situation after the period end.

Click below to learn more about PG Calc's GiftWrap gift administration software.



Recent PG Calc Blog Post

CARES Act Includes Charitable Giving Incentives

CARES-ACTThe Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which the President signed into law on March 27th, provides more than $2 trillion in relief touching nearly every corner of the U.S. economy: large and small businesses, health care providers, non-profits, individual citizens, and on and on. Included in its 880 pages are several provisions of particular interest to gift planners and to fundraisers generally.





Life Income Plans When the IRS Discount Rate is Lower Than Ever

The coronavirus pandemic has affected pretty much everything, interest rates included. Case in point: the IRS discount rate will hit an all-time low in May: 0.8%. Here are a few rules of thumb to help you navigate discussing planned gift benefits during this extraordinary time.

Gift Annuities: Deductions are historically low. This negative effect is offset by historically high portions of the payments being tax-free. Fixed payments look very attractive to many donors right now.

Charitable Remainder Unitrusts: Deductions are only minimally affected. It is especially important to make clear that payments will go up and down with the value of the trust.

Charitable Remainder Annuity Trusts: Deductions are historically low. These trusts will likely fail the 5% probability of exhaustion test (disqualifying the trust) unless the beneficiaries are in their upper 70s or older.

Retained Life Estates: Deductions are historically high. This could be a good time to do one.

Lead Annuity Trusts: Deductions are historically high. Now is an especially opportune time for wealthy donors to transfer assets to heirs and make a big gift using a lead annuity trust.

Lead Unitrusts: Deductions minimally affected.

Pooled Income Funds: Deductions relatively high because interest rates have been low for several years, but no immediate effect on deductions.



Checks vs. EFT - And the Winner Is...

Most charities will offer the donor/income beneficiary of a life income gift a choice between receiving income payments via a check or electronic funds transfer (EFT). While more donors are opting for EFT, many are still receiving payments by check. For the following reasons your charity should encourage those donors to switch to EFT:

  1. EFT removes the US mail from the payment process.
  2. EFT eliminates the possibility that the check falls into the wrong hands.
  3. Donors in assisted living or long-term care facilities have less control over their mail.
  4. Funds are unavailable to a donor if a check is sitting in a mailbox or in a post office if the donor will be away for an extended period.
  5. When a donor moves, they may forget to notify the charity of the change of address. Likely, they will still maintain their same bank accounts.
  6. More donors are comfortable with direct deposit payments, as that is how they receive Social Security payments.

From a gift administration perspective, donors will ultimately receive better service with an EFT, as the charity will know much more quickly if the payment is rejected. The time frame to learn the circumstances of an uncashed check will be longer.

Suggestion: Do a mailing to all income beneficiaries still receiving checks. Enclose a direct deposit form requesting that they switch to EFT, giving the reasons stated above to make the case. With recent events, donors who have not been receptive in the past may welcome the opportunity to now have payments show up in their bank account. Let the donor know they will still receive a deposit advice in the mail (perhaps include a sample). When originating new gifts, consider only offering EFT as the means to receive payments.



We're Here to Help!

If you or your cause needs help, even if you think it might be outside of your service contract or retainer, please don’t hesitate to reach out. Over the last few weeks, we have set up software for people in their new home offices, reset passwords, and adjusted privileges during this transition in work style. Last week, as another example, we printed and mailed pooled income fund checks for a GiftWrap client whose office closed very quickly and the staff didn’t have another option. For another charity, we stopped the presses for a newsletter where the language would have sounded unsympathetic and re-wrote it before it went out. And if you email us at 7PM Eastern Time, don’t be surprised if you get a reply back!

It’s very likely that our business has been less impacted than yours. We’re your partner in planned giving success -  let us know how we can prove it!



PG Calc to Offer Online Software Training

With the uncertainties surrounding the coronavirus pandemic, no one knows when we’ll feel safe once more to travel and congregate. We are therefore pleased to announce our first online PGM Anywhere training on May 13 & 14, offered in two 2-hour segments on consecutive days. We are in the process of transitioning additional software training options to an online format and will offer more topics over the coming months. We look forward to a future when we will again have the pleasure of meeting our clients face-to-face. Until then, we hope you will join us for distance training.




Berea College Organizes Their Legacy Program with PG Calc's Bequest Manager

Scotty Abney, Executive Assistant to the Vice President of Finance at Berea College in Berea, KY, is responsible for the administration of all estates and bequests at the College. The planned giving program at Berea College is over 100 years old, and approximately 4,000 donors have left estate gifts to the College over the years.

Already a PG Calc GiftWrap and PGM customer, Scotty felt confident that PG Calc could solve her bequest management problem, and in fact, found that solution in PG Calc's Bequest Manager. In evaluating potential solutions, Scotty was particularly interested in online storage and organization of estate documents. In addition, Scotty was looking for workflow capability that would increase the likelihood of successfully receiving estate distributions. Bequest Manager was found to meet these, as well as many other requirements. With Bequest Manager, Scotty saves time, and doesn't have to worry about things slipping through the cracks.

This is what Scotty has to say about Bequest Manager:

“I love Bequest Manager! It is wonderful having all the information I need on bequests in one place, being able to see attorney contact information, gifts expected or already received, and bequest pipeline reports. I also love the storage feature that allows you to put a Will or Trust document into an individual record. I am so much better organized now. The staff at PG Calc are helpful and easy to get in touch with should you have a question."

Learn more about the Berea College.

Learn more about PG Calc's Bequest Manager.