PlannedGiving.com - Planned Giving

On Wednesday, April 28, the American Council on Gift Annuities (ACGA) board authorized new suggested rates, as of July 1, 2010. The new Rates are published at: http://www.acga-web.org/2010ratesjuly/singlelifejuly10.html. The decision leaves me asking one question: “Why?”

The rates moved up only VERY slightly.

Here is a sample of a few rates, and a comparison that shows how they moved:

• The rates stayed the same for 90-yr-olds & older (still 9.5%).
• 80-yr-old rates went up from 7.1% to 7.2% (that’s an increase of 0.1%).
• 70-yr-old rates went up from 5.7% to 5.8% (again, an increase of 0.1%).
• 60-yr-old rates went up from 5.0% to 5.2% (that’s a 0.2% increase).

Even though I usually caution fundraisers against promoting gift annuities by saying, “Fund a gift annuity now before the rates go down,” those campaigns can sometimes be effective. There is at least some reason for donors to make a move before the rates get worse. See my caution about this type of promotion at: http://plannedgiving.com/blog/2009/02/27/all-annuitants-are-women-and-they-lie-about-their-age/.

But no one will actually jump at “Fund an annuity now because we’ll give you more money later if you wait.”

From a purely profit-driven perspective, this could bring some new business to PlannedGiving.Com from people who need to update their brochures. It could move a few holdouts who write their own web pages to consider switching to a professionally designed and maintained VirtualGiving web site. But I didn’t have anything to do with the decision, so don’t blame me.

In my opinion this is pretty close to a non-event from a donor-relations and gift-promotion perspective, and nothing more than a hassle for the planned giving officers who promote gift annuities to their constituents. I don’t understand why the ACGA Board didn’t wait to make a change until there was a change that made a difference.

What has Congress done?  (Or how could they just sit by and do nothing?)  I hear different versions of this question from a wide variety of people.

One article on a planned giving website starts with, “It’s an extraordinarily uncertain time …”  One boilerplate publication sent by nonprofits ends with, “… the estate tax litigation over 2010 law may last for the next decade.”  Some people in our profession may be trying to fan the flames of hysteria.  Do you want to be one of them?  Does hysteria encourage anybody to put together a good estate plan?

Here’s the short version of what happened, in plain English:  Read more »