September 2023 eRate

Funding CGAs with Mutual Funds:
Is This Still a Problem?

Americans have extensive holdings of mutual funds representing significant portions of their investment portfolios, and many invest exclusively in mutual funds. This makes sense – mutual funds are easy to purchase, simple to understand, and they allow for continuous reinvestment of dividends and income earned by the mutual fund shares. As donors review their financial assets to determine which ones to use to fund charitable gift annuities, mutual funds present an obvious choice. As an added bonus: mutual funds are easy to value for gift purposes. The share price of a mutual fund is determined daily and published as the “Net Asset Value (NAV).” A donor uses this share price to value a gift of mutual fund shares. In contrast, a gift of publicly traded securities must be computed as the average of the high and low trading prices on the date of the gift.

But gift planners should be aware of some particular aspects of mutual funds that can cause significant complications in the process.

WEBINAR August 31

Taxation Basics for Gift Planners

Whether you are a gift planning specialist or a fundraising generalist, there are some essentials you should know about Federal taxes. In this webinar, Craig Wruck will cover the basics of the income tax and transfer taxes (gift taxes and estate taxes). Craig’s focus will be on a conceptual understanding that will equip you to provide clear and concise explanations to your donors. In addition to the basics of taxation, Craig will describe the tax benefits associated with charitable gifts and factors that can affect these benefits. His discussion will be based on current tax law.

Presented by
Craig Wruck

Thursday,
August 31, 2023
1:00 - 2:00 pm ET

UPCOMING TRAINING

PGM to PGM Anywhere – FREE!

September 7, Online (90 Minutes)

PGM Anywhere and Charitable Remainder Trusts

September 13-14, Online (4 hours over 2 days)

GiftWrap Fundamentals

September 26-27, Online (6 hours over 2 days)

Gift Planning with PGM Anywhere

October 31, Introductory, In-person (Chicago)
November 1, Advanced, In-person (Chicago)

**Quick Tip: Make Sure More Than One Person Can Unlock PGM Anywhere User Accounts**

If your organization has multiple PGM Anywhere user accounts, it is a good idea to make sure that more than one person can unlock user accounts. A user may use the "Forgot Password" option on the login page to reset their own password. However, a user's account may become locked, either due to too many incorrect login attempts in a row or because it has been too long since their last login (how many and how long are settings under Users > Security).

If the person designated the “Primary Admin” of your organization’s PGM Anywhere account is not available and no one else is set up with access to the Users menu, a user who gets locked out will not be able to access the program (PG Calc is able to unlock and reset the password only for the user designated as the “Primary Admin”). Additional users may be set up with access to the Users menu by assigning them the “Admin” role (or a custom role with Users menu access) so that they too will be able to unlock accounts. Users with the “Officer” role can run illustrations but do not have access to the Users menu.

To unlock a locked user:

Open the Users menu in PGM Anywhere. (If you don’t see the Users icon in the upper right, you don’t have access to this menu.)
Click the lock icon next to their user account listed in User Management. It will change to the unlocked icon .
If you want the user to reset their password, you can force this by clicking the edit icon next to their user account listed in User Management, marking the “Send email to reset password” box, then clicking Save.

To review/change user roles:

Open the Users menu in PGM Anywhere.
To review the access provided by a role, click Roles, then click the symbol next to the role and note the permission sets marked with a check.
To change a user’s role, click the symbol next to their user account listed in User Management, then update their role and click Save.

Note that accounts may be set up with the “Tech” role, which is intended for non-user administrative or IT contacts. The “Tech” role provides access to the Users menu but does not allow the user to produce illustrations. The “Tech” role does not count toward an organization’s limit for user accounts.

Please contact Client Services at support@pgcalc.com or 888-474-2252 if you would like to review your organization’s PGM Anywhere account or if you have any questions.

PG Calc's BDQ blog series: the big dumb questions of planned giving

From the Blog: BDQ #5 – What Is Planned Giving?

Sometimes there are really obvious and very simple answers. Everyone knows what planned giving is, right? Not so fast. A quick web search reveals a slippery slope of ambiguity. Introducing terms like “gift planning” and “deferred giving” only adds to the confusion.

Are we doomed to concede as many different definitions of planned giving as there are readers of this article? Maybe the definition of planned giving has to be as vague as Justice Potter Stewart’s famous definition of obscenity, “I know it when I see it.”

We propose the following definitions. Read the blog post . . .

Things We Are Following: Donor Advised Funds

It isn’t a surprise to anyone that the state of politics and legislation in Washington cloud the legislative crystal ball for the foreseeable future. Nonetheless, there are a number of things we are keeping an eye on. This is part one of an occasional series on “Things We are Following.”

Donor Advised Funds: Lawmakers are concerned about the huge amount of wealth in the nation’s Donor Advised Funds (DAFs). Fidelity Charitable was the largest grantmaking organization in 2022 with grants to non-profits totaling $11.2 billion.

Donor advised funds are a popular alternative to private foundations because DAFs don’t have to comply with private foundation rules. DAFs are not required to make a minimum annual charitable distribution, nor are they required to file detailed tax returns. Therefore, while DAFs are attractive alternatives to private foundations, they are not subject to the same level of oversight as private foundations.

The ACE Act is a Senate bill that would tighten the rules for DAFs to speed donations to charities. (Read our analysis of the ACE Act here.) Some feel the ACE Act could create disincentives to charitable giving, particularly giving via DAFs. On the other hand, lawmakers are concerned about the warehousing of wealth in DAFs and want to require DAFs to make more timely distributions to charity. The Act would create different classes of donor advised fund accounts. One variety will generate an immediate charitable deduction if the donor agrees to empty the account in favor of charity within 15 years.

The second type of DAF account would not generate an immediate charitable deduction but would allow delaying charitable grants for 50 years. These donors would only be entitled to the charitable deduction upon making the future grant.

Community foundation-sponsored DAFs with less than $1 million would be exempt from either distribution account requirements under the ACE Act. But donors with more than $1 million in a community foundation DAF would only qualify for benefits if they distributed at least 5% of their assets annually or made grants to charity from their DAF within 15 years of original funding.

We’ll keep an eye on potential DAF legislation and other topics relevant to planned giving, so watch this space.

Craig Wruck to Be Inducted into the CGP Hall of Fame

Yesterday, the National Association of Charitable Gift Planners released the names of its 2023 award recipients. We are thrilled that PG Calc Senior Advisor Craig Wruck is to be inducted into the CGP Hall of Fame in recognition of his years of service in the field of planned giving. Congratulations to Craig and all the CGP award winners of 2023!

We look forward to celebrating Craig's achievement and seeing many of you in November at the annual conference. Craig joins PG Calc President Gary Pforzheimer, who was inducted into the CGP Hall of Fame in 2020. (And yes, that's the same Craig who will be presenting the PG Calc webinar August 31st.)

Are You Ready for Fall Fundraising?

Fall is a busy fundraising time, particularly as many development teams meet with donors to plan gifts before year end. PG Calc’s gift illustration tools have been the top choice of fundraisers for nearly forty years, so make sure everyone on your team who will be creating gift illustrations for donors has access to PGM Anywhere, particularly now that PGM Anywhere has been updated with IRA QCD gift agreements and gift acknowledgements.

Adding users to your license is a simple process, and our Client Services team will be glad to assist. Contact us at support@pgcalc.com or 888-474-2252, and we can help you add users to your license. And remember, all PGM Anywhere users will also have access to our world-class Client Services team to help them with all their planned giving questions and gift planning head-scratchers.

PG Calc Summer Hours Until Labor Day

As a thank you to our team and in recognition of the lower demand for our assistance on Friday afternoons, PG Calc’s offices will close at 3:00 pm ET on Fridays until Labor Day.

We stand ready to help you and all our clients the rest of the week. Don't hesitate to contact us.

At a Conference Near You

It’s getting to be that time of year – when we start looking at the upcoming conference season. Here’s where the PG Calc team will be:

August 22-23: Colorado Planned Giving Roundtable Annual Summer Symposium (Senior Advisor Craig Wruck will be presenting The Essentials of Planned Giving, and Director of Gift Administration Julia Boerth will be presenting It Takes Two to Tango: How to Secure More Planned Gifts with a Well-Choreographed Dance)
September 14: Planned Giving Group of New England Kickoff Monthly Meeting (President Gary Pforzheimer will be the keynote speaker)
September 27: Maine Planned Giving Council Annual Conference
September 28: Northern Ohio Charitable Gift Planners Annual Planned Giving Day (Vice President, Consulting Jeff Lydenberg wil be presenting)
October 4-5: Minnesota Gift Planning Association Annual Conference & Brisk Walk
October 12: Washington Planned Giving Council Annual Planned Giving Day (Senior Consultant Edie Matulka will be presenting)
October 25: Planned Giving Council of Greater Philadelphia Planned Giving Day Conference
November 1-3: National Association of Charitable Gift Planners National Conference in Chicago (Senior Advisor Craig Wruck will conduct the pre-conference session: Gift Planning Fundamentals: Tools & Techniques). Also, PG Calc will be offering in-person training: “Gift Planning with PGM Anywhere.” Take our Introductory class on Oct. 31 and/or our Advanced class on Nov. 1.

The Salvation Army Appreciates PG Calc's Custom Gift Agreements

"I hate wasting time using multiple programs to do one thing. I saw there is a Gift Summary in PGM Anywhere that serves a similar purpose to our Gift Agreement Information Report that I was producing with a mail merge form in MS Word. The Gift Summary just didn’t have all the information we like to show. I was thrilled that PG Calc could create a custom Gift Agreement Information Report that I can produce right from PGM Anywhere. Having all the documents I use in one place (PGM Anywhere) saves me time and there is less room for human error when entering data."

-- Jessica DeRosa, CGPA
Territorial Gift Planning Coordinator
The Salvation Army │USA Eastern Territory

Learn more about The Salvation Army Eastern Territory.

If you'd like to learn more about how PG Calc's Bill Laskin can make custom gift agreements for your organization, call us at 888-474-2252.

PG Calc 129 Mount Auburn Street Cambridge, MA United States

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Funding CGAs with Mutual Funds:Is This Still a Problem?