Planned Giving Insights and Information

Hey, How’s That PIF Doing Lately?

We write about pooled income funds (PIFs) from time to time. Pretty much the same old story – no one is creating new PIFs, and if you’ve got a PIF, it’s probably languishing. The income distributed each year is just a fraction of what was distributed in the heyday of PIFs – the glory days of the 70s, 80s, and 90s. Since PIFs can only distribute net income, and since interest rates have been relatively low for decades, there seems to be no appeal anymore. There have been no new gifts in years, and the participants are slowly dying off. Death by a thousand cuts, as they say. But there is still something to say about pooled income funds. For organizations that have large and robust PIFs, the benefits are significant, and they are still coming in. We took a random look at some actual PIFs and found that the charitable remainder amounts distributed to their sponsoring charities are astounding. Remainders ranged anywhere from 110% to 250% of the original gift amount. How can that be? How is...

Questions to Ask Before Accepting an International Gift

I have a friend, a veterinarian, who told me that one of the first things she was taught about cats is that they are not small dogs. Even though both are companion animals, the similarities between cats and dogs are only fur deep. This anecdote came to mind last month when discussing the challenges of negotiating life income gifts from donors abroad. Because outright gifts to charity are universal, and bequests to charity nearly so, it is tempting to think that split-interest agreements, like charitable gift annuities, charitable trusts, and pooled income funds, are just as ubiquitous. Think again. Among the nearly 200 countries on the planet, only a few have charitable gift opportunities similar to American charitable gift annuities and charitable trusts. Even when split-interest gift arrangements are allowed, there can still be striking differences. For instance, Canada offers immediate charitable gift annuities but does not allow donors deferred gift annuities or flexible gift...

Charitable Lead Trusts: Not Just for the Super-Rich

Sometimes, in the world of charitable gift planning, we focus too closely on the tax consequences of potential gift plans. With charitable remainder trusts (CRTs) and charitable gift annuities (CGAs), it is not enough to know how much the income tax deductions will be – donors also want to know how much the vehicles will pay to themselves and/or other beneficiaries over time. And not just how much the payments will be, but also, how those payments likely will be treated for income tax purposes. Occasionally a donor comes along and says that the amount of the charitable deduction, or even the amount of the payments, is not important, but that type of donor tends to be the exception to the rule. Charitable lead trusts (CLTs) are at times described as “upside-down” or “reverse” CRTs. While it is true that the charitable interest leads with a CLT (a stream of payments is made over time to one or more charitable organizations), and the remainder of the corpus at the end goes to one or more...

New York Maximum Annuity Rates Have Increased Significantly

(Updated February 13, 2024) Governor Hochul signed New York Bill A4599a on October 25, 2023. The new law revises how New York computes its maximum annuity rates for gift annuities issued to New York residents and went into effect 90 days after signing, which is to say, on January 23, 2024. New York has now published the maximum rates applicable for gift annuities funded January 1, 2024 – January 22, 2024, during which the old method still applies, and for gift annuities funded January 23, 2024 – June 30, 2024, during which the new method applies. (The new law calls for updating the New York rates semiannually rather than quarterly.) As expected, switching to the new method increases New York’s maximum annuity rates significantly. The table below compares old and new New York maximum rates with American Council on Gift Annuities (ACGA) suggested maximum annuity rates over a range of typical gift annuitant ages. The columns on the far right show that New York’s new single life maximum...