From the Blog: Hey, How’s That PIF Doing Lately?

We write about pooled income funds (PIFs) from time to time. Pretty much the same old story – no one is creating new PIFs, and if you’ve got a PIF, it’s probably languishing. The income distributed each year is just a fraction of what was distributed in the heyday of PIFs – the glory days of the 70s, 80s, and 90s. Since PIFs can only distribute net income, and since interest rates have been relatively low for decades, there seems to be no appeal anymore. There have been no new gifts in years, and the participants are slowly dying off. Death by a thousand cuts, as they say.

But there is still something to say about pooled income funds. For organizations that have large and robust PIFs, the benefits are significant, and they are still coming in. We took a random look at some actual PIFs and found that the charitable remainder amounts distributed to their sponsoring charities are astounding. Remainders ranged anywhere from 110% to 250% of the original gift amount. How can that be? How is it possible that PIFs can still achieve extremely successful results in spite of all the bad press?

Read the blog post . . .

Things We Are Following:

IRS and Department of Treasury Schedule May 6 Public Hearing on Proposed DAF Regulations

The IRS and Department of the Treasury have announced a public hearing on the proposed regulations for donor advised funds (DAFs). The hearing will be held on May 6, 2024 at 10:00 am ET at the IRS offices in Washington, DC. It can be attended in person and by phone.

This hearing follows the fall release of proposed DAF regulations that broaden the definition of funds subject to DAF regulations, impose an excise tax that will discourage many investment advisors from continuing to manage client assets contributed to a DAF, and make other changes to DAF regulations that caught many by surprise. See our January 2024 featured article for more background.

Those who wish to attend the hearing either in person or by phone must register ahead of time by email. The deadline is May 1 (see the announcement for instructions). To date, 233 public comments have been posted and can be viewed here.

We will continue to follow the hearings and the proposed regulations.

FinCEN Ruling Does Not Provide Relief Sought by Charities

On March 15, 2024, the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury tasked with safeguarding the financial system, published an administrative ruling with important consequences for charities seeking to receive funds designated to them from an IRA (FIN-2024-R001). The ruling is FinCEN’s response to a charity that asked whether it must provide personal information to receive funds from an IRA of which it was a designated beneficiary. The IRA administrator required the charity to open a new account with the administrator to receive the funds.

FinCEN’s ruling states that, to open a new account, a broker-dealer (i.e., an IRA administrator) is required “to obtain identifying information, including but not limited to a social security number, for a single individual with significant responsibility to control, manage, or direct the organization.” Many, but not all, IRA administrators require a charity to open a new account to receive IRA funds. So, to receive IRA funds from one of these administrators, an individual in senior management at the charity must provide personal information, including their social security number, to the IRA administrator.

PG Calc Experts Presenting on CGA State Regulations at the ACGA Conference

PG Calc’s Director of Gift Administration Julia Boerth and Consultant Julie Goldenberg Hay will be presenting State Regulations: What You Need to Know at the 2024 ACGA conference on Wednesday, May 1.

Their presentation will cover the difference between the varying levels of gift annuity state regulation and how these regulations may apply to your organization. They will also address the various players involved in gift annuity registration and ongoing compliance both inside and outside your organization. Attendees will gain a better understanding of the state regulations and a framework for gift annuity compliance success.

Learn more about the conference and register here.

As Many Charities Close in on Fiscal Year End, Review Your Endowment Sub-Accounting

The fiscal year for many charities ends in June. This is a good time to review your sub-accounting practices to avoid costly mistakes. Your endowment is critical to the financial success of your organization. Accurate sub-accounting is key to ensuring the financial stability of your program, proper tracking of income and expenditures, demonstrating impact, and good donor stewardship.

To find out if your endowment sub-accounting process is flight-ready or at risk of catastrophic failure, read Gary Pforzheimer's 5-step guide: Endowment Sub-Accounting - What Could Go Wrong? 

Hands-on Gift Planning Training in Washington, DC, May 15th and 16th

PG Calc heads to Washington, DC for two days of in-person training in basic and advanced gift planning techniques using PGM Anywhere on Wednesday, May 15th, and Thursday, May 16th, from 9:00 am to 4:00 pm ET.

Day 1: We’ll explore immediate charitable gift annuities (CGAs), including CGAs funded with qualified charitable distributions (QCDs), as well as deferred gift annuities (DGAs), flexible gift annuities (FGAs), and standard payout charitable trusts. Students will leave with experience in modeling basic gift types, from proposals to income projections, and everything in between.

Day 2: We’ll walk through advanced gift planning techniques, including: flip charitable remainder unitrusts funded with real estate (flip CRUTs), retained life estates (RLEs), and charitable lead trusts (CLTs). We’ll also review gift and estate transfer taxes and discuss how planned gifts can be used to minimize both.

The focus of both days is on hands-on learning using case studies as our primers and PGM Anywhere. Both sessions end by 4:00 pm, making it possible for fundraisers to squeeze in dinner with a donor or prospect before heading home.

For more information, or to register for one or both days, visit: www.pgcalc.com/insight-education/software-training.

Register Your Charity for Free with Foundation Source’s GivingHub, the New Portal for Foundation Grant Applications

Now that PG Calc is the Planned Giving division of Foundation Source, we wanted to make charities aware of Foundation Source’s GivingHub – a FREE online portal through which nonprofits can register to apply for philanthropic foundation grants, manage their applications, and more:

• Complete applications and outcome forms
• View and track the status of your applications
• Track payment status and amount
• Complete saved documents
• Download completed documents
• Enjoy specially curated resources

Create a free account for your charity in Foundation Source’s GivingHub, the first step to tap into this powerful network of charitable foundations.

The International Rescue Committee Values Partnering with PG Calc for CGA Compliance

“We find tremendous value in partnering with PG Calc for our charitable gift annuity (CGA) state filings. Edie Matulka makes the process very simple – providing clear instructions, deadlines, facilitating the filings, and patiently answering all of our questions. Working with the team on two new state registrations saved us many hours of time and aggravation. Edie and the team take the time and worry out of this often tedious process, so we are confident that we are filing on time and correctly while we focus the valuable time of our internal team on generating new CGAs and stewarding our existing donors. Our Finance Team appreciates that we utilize PG Calc’s services and expertise as well!”

-- Sharon Bean, CFRE
Senior Director of Planned Giving
International Rescue Committee

Learn more about The International Rescue Committee.

Learn about PG Calc’s services for Gift Annuity compliance.