Recent PG Calc Blog Post

CARES Act Includes Charitable Giving Incentives

The 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.