The American Council on Gift Annuities (ACGA) just released its new recommended gift annuity rates, effective July 1, 2018. In general, the rates will increase by .3% to .5%. For a look at the rates and PG Calc’s analysis of the change, read our recent blog post. Changes in the ACGA suggested rates, up or down, create the chance for communication with current annuity donors and those considering a gift annuity. The current rate increase certainly offers opportunities for additional annuities from existing annuitants. But more importantly, the rate increase will likely motivate others considering an annuity to make their first gift. This means increased diversification of your pool, thereby reducing your long-term risk.
On May 15, 2018, the American Council on Gift Annuities (ACGA) announced new suggested maximum gift annuity rates to replace the rates that became effective on January 1, 2012. The new rates will apply to gift annuities established on or after July 1, 2018. The new suggested maximum rates are moderately higher than the ones they replace. The new rates were set with the goal of 50% of the funding amount remaining for the charity on average. The rates also ensure a 20% present value and a contribution value of at least 10% of the funding amount at all ages down to an IRS discount rate of 2.8% (as compared to 1.4% under the January 1, 2012 rates). These additional criteria cause the maximum rates suggested for very young ages (under 20) to be lower than they otherwise would be.
It's always interesting to discuss the latest marketing trends, especially since trends don’t occur that often in the planned giving world. However, in the last 18 months, we have conducted several marketing evaluations and audits that have revealed something - a shift in thinking.
When we at PG Calc run long-term projections for charitable remainder trusts using our Planned Giving Manager (PGM) and PGM Anywhere software, we make certain assumptions about the investment performance of the trust assets. There is a fairly basic dynamic implicit in our modeling, which is that the remainder of the gift plan will be the result of the original funding amount, the amount paid out to one or more beneficiaries, and the amount earned by the trust assets. The default assumptions in PGM and PGM Anywhere are that of an 8% total investment rate of return, broken down into 5% principal appreciation and 3% income.
When we think about sustainability, the first thing that generally comes to mind is saving our world’s precious resources. Sustainability is in the news daily. Just recently, it was reported that Cape Town, South Africa will run out of water as soon as April 2018! Sustainability is not just about being careful how we use our resources so as not to deplete or damage them. It’s also about “relating to a lifestyle involving the use of sustainable methods,” according to Webster Dictionary. Sustainable methods = Something you can maintain So how do you sustain your planned giving marketing program?