November 2021 eRate

Don’t Be Scared Off by CGA Regulations

For any charity operating a gift annuity program, the question, “In what states do we need to register?” has likely come up (perhaps more than once). That may be closely followed by a declaration “we’re not registering in…” and the naming of one or more states accompanied by horror stories of the level of regulation they impose. Although complying with state gift annuity regulations does not top anyone’s “things I enjoy” list, the desire to avoid a certain state’s regulations can interfere with the success of your program.

Fortunately, a charity can issue in half of the states without being subject to any gift-annuity-specific registration, and if you tack on the 14 states that require only a notice of intent to issue, then the total grows to 39 states. The complexity really comes with the 11 more highly regulated states: Alabama, Arkansas, California, Florida, Hawaii, Maryland, New Jersey, New York, North Dakota, Tennessee, and Washington. While for some organizations their donor base is such that they want to be able to issue gift annuities in all states, for many it will make sense to weigh the cost (in time and dollars) of compliance with the benefit of expected gifts.

The question of where to register and issue should take into account the geographic reach of an organization and where it might have donors, but also the level of regulation in a given state as compared to the potential for gifts.

WEBINAR October 21

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.

Important Year-end Charitable Giving Strategies

Presented by
Russell James, J.D., Ph.D., CFP®

Thursday,
October 21, 2021
1:00 - 2:30 pm ET

UPCOMING TRAINING

GiftWrap Advanced Reporting

October 19-20, Online (4 hours over 2 days)

PGM Anywhere and Gift Annuities

October 26-27, Online (4 hours over 2 days)

PGM to PGM Anywhere FREE

November 9, Online (90 Minutes)

GiftWrap Fundamentals

November 16-17, Online (6 hours over 2 days)

Quick Tip: Optimizing an FGA Deduction in PGM Anywhere

The deduction for a flexible gift annuity (FGA) is determined by the deferred gift annuity that would produce the lowest charitable deduction among all the possible payment start dates the annuitant may elect. It is the price the donor pays for the FGA’s flexibility.

PGM Anywhere includes a new feature that allows the donor to target a specific payment start date for determining the charitable deduction. This option can be handy, for example, if a donor thinks she will want payments to start in five years but wants the option to start them a few years earlier or later. Since the donor is fairly sure she will want payments to start in five years, you could have PGM Anywhere reduce the annuity rates on either side of the five-year deferral, as needed, so that the charitable deduction is determined by the payment start date in five years. The steps are easy:

Open Gift Options and select a Flexible Gift Annuity.
Fill in the first follow-up screen, then click Next.
Select Yes for Optimize deduction for target start year?
Enter the target start year for determining the deduction.
Click Done.

If you have any questions about this feature, contact Client Services at support@pgcalc.com or 888-474-2252.

From PG Calc’s Blog – Tax Implications of the Infrastructure Bills: Keep Calm and Carry On

At best, the current status of tax legislation is confused. There are two major pieces of legislation making their way through the process. Although they are distinctly separate bills, they are inextricably linked to one another. Each proposes different changes to tax law, and, even worse, the word “infrastructure” has been used, loosely, to describe both of them. Making matters even more confusing, the path forward in the U.S. Senate involves two procedural rules that are anything but intuitive.

Confusion is never good for donors, so let’s break it down…

GiftCalcs Update Includes Optimizer and Accessibility Enhancements

On October 5, we updated GiftCalcs, our planned gift calculator for websites. This latest update enables GiftCalcs to reduce a gift annuity rate automatically, as needed, whenever the charity’s standard annuity rate would result in a charitable deduction less than the required 10% of the funding amount. We have turned this option on for all GiftCalcs clients, but we can turn it off for you if you don’t want it. Also, you can customize the note that appears when optimization is applied. Charities that follow the ACGA rates should rarely, if ever, run into this situation, but it can happen.

We also made a variety of improvements to make GiftCalcs more accessible to people with disabilities.

If you have questions about this update, contact Client Services at support@pgcalc.com or 888-474-2252.

PG Calc Training Schedule for the Remainder of 2021

Come and join us for a training session this fall! We will continue to offer our ONLINE trainings through the end of 2021. See our current schedule with course descriptions.

We are currently working on our 2022 schedule. Check back on our site later this month for those dates.

Although we miss seeing our clients in person, we have had an overwhelmingly positive response to the ONLINE trainings we have conducted so far. Take advantage of these offerings without the hassles of traveling!

Maximum NY CGA Rates: Ignorance of the Law is Not a Valid Defense

The State of New York has been publishing the maximum payout rates for one-life standard (immediate payout) charitable gift annuities since the 1^st quarter of 2020. They don’t publish the actual rates, but rather, they publish the “Maximum Income” amount per $1,000 for each age – which easily translates into a percentage rate. New York’s rates are gender-specific and updated quarterly. Over the past 21 months, these maximum NY rates have been below the maximum payout rates suggested by the American Council on Gift Annuities for many typical annuitant ages. This makes it necessary for any organization issuing CGAs to New York donors to look up the maximum one-life immediate rates in each instance and then offer the lower of the ACGA rate and the NY maximum rate.

The State of New York does not publish the maximum rates for immediate payment two-life gift annuities or for one- or two-life deferred gift annuities. Nevertheless, charities may not assume they can use the ACGA suggested maximum rates for these gifts when issuing to New York residents. New York determines maximum rates for these gifts following the same methodology used to determine the maximum one-life rates for standard gift annuities.

What does that mean in practical terms? PG Calc customers may request from us a free calculation of the maximum payout rates for two-life immediate annuities and one- or two-life deferred gift annuities issued to New York residents.

Learn About PG Calc's NY Rate Calcs Service

See You in Philly at the PGCGP Planned Giving Day Conference

Come say hello to PG Calc's Director of Gift Administration Julia Boerth at the 2021 Planned Giving Day Conference "The Power of Legacy" on Wednesday, October 27 in Philadelphia. Julia looks forward to catching up in person.

You can still register for the conference.

Cape Eleuthera Foundation Is Pleased With Their New Planned Giving Website Created by PG Calc

“The PG Calc team was fantastic to work with; they were very responsive and engaged throughout the process. They created a beautiful, seamless experience for us that is a new component of our development operations – the finished product looks and feels just like our website. We are so pleased with the result!”

Lindsay Johnson
Director of Development Operations
Cape Eleuthera Foundation

Learn more about the Cape Eleuthera Foundation.

Learn more about PG Calc’s Marketing Services.

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