Planned Giving Insights and Information

Research on Donor Advised Funds Presented at 2022 CGP National Conference

Dr. Danielle Vance-McMullen of DePaul University and Dr. H. Daniel Heist of Brigham Young University presented their preliminary analysis of data from 13,000 donor advised funds at the 2022 National Conference of Charitable Gift Planners last month. While some of their findings confirm what we already know about DAFs, others challenge our common assumptions. The study, which examined data from 2017 to 2020, identified four key themes.

IRS Announces Indexed Tax Items for 2023

The IRS has announced the values for 2023 of various tax items that are indexed annually for inflation. In general, values have been adjusted upward about 7.0%. Of particular interest to gift planners, the unified gift and estate tax exemption amount will be $12,920,000 ($25,840,000 per couple) in 2023, an increase from $12,060,000 ($24,120,000 per couple). So, next year a couple that takes advantage of the portability of unused estate tax exemption will be able transfer nearly $26 million to heirs without triggering any federal estate tax.

New York Maximum Annuity Rates Higher than ACGA Rates in Q4 2022

As was true for the last quarter, there is good news for charities that issue annuities in New York! The maximum annuity rates allowed by New York for gift annuities issued to a New York donor in the fourth quarter of 2022 increased modestly from their third quarter levels. Consequently, as in the third quarter, New York’s maximum single-life annuity rates for Q4 2022 are higher than the corresponding ACGA rates for all male and female ages. This means charities can offer the ACGA rate to New York donors of single-life annuities funded from October 1, 2022 to December 31, 2022, regardless of the annuitant’s age and gender.

Beware CGA Rate Shoppers

The rate to be offered to your interested donor, per your organization’s policies, is 6.5%. So what do you do if your donor asks if you can go a little higher, maybe a rate of 6.8%? And then lets you know that another charity is willing to offer that? How do you suppress the urge to waive your policy in order to not “lose” the gift, particularly since these situations often arise in the context of an exceptionally large contribution amount – which is precisely when you don’t want to increase the risk to your organization? To help stamp out the urge to participate in rate shopping, it helps to understand how policy decisions affect your program, and the impact bumping up your rates can have on its success.