Planned Giving Insights and Information

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Jeffrey Frye

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The Revocation Clause

Posted by Jeffrey Frye on May 16, 2016

The life income gift arrangements that make up a significant portion of planned giving – charitable gift annuities, charitable remainder trusts, and pooled income funds – are all irrevocable. In order to qualify for a charitable deduction and special tax treatment, these vehicles cannot allow any changes, and the donors cannot “take them back” in any way. There is, however, a provision that may be included in these legal arrangements which allows the donor to revoke the income interest of another person at some point in the future.

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Why Are the K-1s Late Again This Year?  Why Are They Late Every Year??

Posted by Jeffrey Frye on March 3, 2016

It happens every year – your gift annuity donors received their 1099-R forms at the end of January, and everyone was happy. But once the calendar turned to February, the calls started coming in from your charitable remainder trust donors; they are looking for their K-1 forms, which report the income they received from their trusts. If you have a pooled income fund, you’re getting calls from those donors too, because they are also entitled to a K-1 form. And once the calendar turns into March, the calls get uglier. Everyone expected to receive their tax forms around the end of January, because that’s when all tax forms are due, right?

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Topics: K-1

10 Dirty Little Secrets of Gift Administration

Posted by Jeffrey Frye on December 23, 2014

OK, so they’re not exactly “dirty” little secrets. But who among us hasn’t had a moment administering a particularly complex gift and thought – what have I gotten myself into?

PG Calc has been providing gift administration services since 2001, and we know that the work we do behind the scenes is critical to the ongoing success of our clients’ planned giving programs. We also know that there are plenty of unexpected headaches that can accompany administering a planned gift.

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Topics: gift administration

Your Donor's Vote Counts (on Discount Rate Election)

Posted by Jeffrey Frye on April 21, 2014

You probably know already that the IRS allows donors to base their charitable income tax deduction for a life income gift arrangement on either the IRS discount rate for the month of the gift, or the discount rate for one of the 2 previous months. For charitable gift annuities and charitable remainder trusts, the highest discount rate results in the highest charitable income tax deduction.

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What's the Big Deal about the Donor's Cost Basis?

Posted by Jeffrey Frye on March 20, 2014

The question of why charities need the donor’s cost basis for long-term appreciated stocks funding charitable gift annuities (CGAs) comes up frequently in our client support calls. If the donor doesn’t provide the information up front, do they really need to pursue it? What if the donor says he doesn’t have the cost basis information? Can the charity simply assume zero for the cost basis and call it a day? What difference does it make anyway?

Why it matters

PG Calc’s Planned Giving Manager prompts the user to supply the dollar amount the donor paid for the stock when it was originally acquired – or, in the case of inherited stocks, the official value of the stock on the date of death of the previous owner (AKA the “stepped-up” cost basis).* This information is relevant and White Paper on Managing Complexities in Gift Administration - Download now! necessary because charitable gift annuities are split-interest gift arrangements. In each CGA, there is a benefit for the charity (the remainder or residuum), and a benefit for the annuitant (the value of the stream of annuity payments over time).

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Topics: gift annuities, cost basis, tax incentives on charitable giving

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