Planned Giving News

The following articles are from the Planned Giving News section of Clifford Swan's quarterly newsletter, The Investment Counselor. To add your name to the mailing list, fill out the form here.

  • 2014

    • Philanthropy from the Donor's Perspective (January 2014)

      Many of our clients are either active philanthropists or seeking opportunities to positively impact their communities. If you are considering contributing to a not-for-profit, there are several factors to keep in mind to make your gift as effective as possible.

  • 2013

  • 2012

    • The Planned Giving Environment (February 2012)

      The last few years have been difficult for non-profit planned giving professionals, as lower investment returns, a depressed real estate market, uncertain tax laws, changes in life expectancy, risking healthcare costs, and changing family structures have become of increasing concern to donors. The resulting decrease in charitable giving means that non-profits find fewer resources to accomplish their missions, while witnessing increasing need in the communities they serve.

  • 2011

    • The Charitable Contribution Tax Deduction (October 2011)

      We all know that the tax code and government spending will be reviewed in the near future with the objective of increasing revenues and/or decreasing expenditures.  The charitable contribution income tax deduction will undoubtedly be included in these discussions.  Although most people do not make charitable contributions solely because of the related tax benefits, the tax benefits certainly enhance a taxpayer's ability to give.

    • Issuing New Gift Annuities in an Uncertain Environment (May 2011)

      We were recently asked by a client if it still makes sense to issue gift annuities given the present environment and its perceived risks.  Understanding that gift annuities are guaranteed obligations of the issuing charity, are the downside liabilities simply too great at the present time?  To address that question, we thought we would dust off an article we wrote just two years ago when we discussed the same subject during a similarly difficult period. 

    • Determining the Date of a Charitable Gift (January 2011)

      The date on which a charitable gift is made, also known as the "date of delivery," not only determines the tax year in which the related charitable deduction may be taken, but could determine the value of the gifted assets.  This is most relevant when securities that fluctuate in value over time are given to charity, since non-cash assets are priced, for gift valuation purposes, as the gift's date of delivery.  Lastly, the gift date could affect the donor's long or short-term holding period of the gifted asset. 

  • 2010

    • Gift Annuity Payout Rates Increase Slightly (July 2010)

      For the first time in seven years, the American Council on Gift Annuities (ACGA) has increased, althought slightly, the recommended payout rates for charitable gift annuities (CGA).  Since July 2003, there have been two rate reductions.  The first reduction was effective for CGAs issued after June 2008, and the second rate reduction became effective in February 2009.  The most recent increase to the recommended payout rates apply to gift annuities received after June 2010. 

    • 2010 Repeal of Estate Tax:  Testamentary Charitable Remainder Trust Implications (July 2010)

      In our first quarter, 2010, newsletter, an article by James Gamb discussed a few of the unintended consequences of the estate tax repeal for 2010.  This article will discuss the unintended consequences involving charitable remainder trusts (CRTs), created by a decendent's will (testamentary CRTs).

    • Considerations for a Successful Charitable Gift Annuity Program (April 2010)

      Charitable Gift Annuity (CGA) contracts continue to be very popular with many donors.  They are simple to understand, while offering security, a steady stream of income, and some tax advantages.  On the surface, they appear relatively straight forward for charities to administer, while attracting a large donor base.  And yet, there are many intricacies we would suggest non-profits consider as they maintain or establish as successful CGA program.

    • Commuted Payment Gift Annuity- College Tuition Annuity (January 2010)

      It is possible for an individual to receive a charitable tax deduction today and avoid taxation on a portion of appreciated assets currently held while providing future financial assistance to both a charity and heir of their choice.  A grandparent holding appreciated stock can donate the stock to a charity in exchange for a Commuted Payment Gift Annuity that pays the grandchild a fixed amount for four years beginning when the grandchild reaches the age of eighteen and is likely to begin his/her college experience. 

  • 2009

    • Uniform Prudent Management of Institutional Funds Act (UPMIFA) (October 2009)

      In our work with endowment committees and non-profit boards, we have been fielding some questions about potential changes caused by the adoption in California of the Uniform Prudent Management of Institutional Funds Act (UPMIFA).  While there are a number of important issues affecting endowments associated with the UPMIFA, for purposes of this article we will focus on the impact it may have on spending and investment policies.

    • IRS Updates - Mortality Assumptions (July 2009)

      The mortality assumptions used by the IRS to calculate charitable deductions for gift annuities and additions to split-interest trusts have been updated and are now based on the 2000CM mortality table effective for gifts made after April, 2009.

    • Safety of Custodial Assets (July 2009)

      In light of the recent problems encountered in the financial services industry, some of our clients have expressed concern over the safety of their assets.  Our clients' assets are held, in custody, at brokerage firms and banks such as Charles Schwab & Company and City National Bank.  As assets held in custody, federal law requires that they be segregated from the custodian's corporate assets and are not subject to the claims of the custodian's creditors.

    • Issuing New Gift Annuities in an Old Bear Market (April 2009)

      With stocks down 50 percent in the past year and a half, many gift planners are wondering if issuing new gift annuities is a prudent decision for now and in the future.  Or are the risks to the issuing organization simply too great!

    • Charitable Trust "Qualification" Tests and Charitable Lead Trusts (January 2009)

      In the Planned Giving News section of our second quarter 2008 newsletter, we discussed the effect of changes in the IRS discount rate on the present value calculations used to determine the charitable deduction for gifts to split interest charitable trusts.  Every split-interest trust has two interests; the income interest and the remainder interest.

  • 2008

    • Charitable Trusts and the IRS Discount Rate (July 2008)

      The monthly IRS discount rate, which is at historically low levels, is used in the present value calculations required for split interest charitable trusts such as charitable remainder trusts and charitable lead trusts.

    • Gift Annuities:  Safe or Sorry? (April 2008)

      In our role as investment managers and administrators of planned giving assets, our non-profit clients periodically ask about the wisdom of spending a reasonable portion of gift annuities prior to the demise of the annuity's beneficiaries.

    • High Basis - Low Tax (January 2008)

      The tax advantages of donating highly-appreciated assets to a charitable trust are widely known and often discussed.  They include an up-front charitable deduction, avoiding estate tax on the donated assets, and shielding large capital gains.

  • 2007

  • 2006

    • Financial Advisors - Friend or Foe of the Charity's Planned Giving Professionals? (October 2006)

      There is a broad-based and growing movement among financial advisors to absorb many of the functions of the traditional Planned Giving Professional.  Many are incorporating into their practice the development of charitable giving strategies for their clients.

    • Pension Protection Act of 2006 (October 2006)

      President Bush signed the Pension Protection Act of 2006 (PPA 2006) on August 17, 2006.  Included in this act is a provision (Sec. 1201) that allows tax-free transfers of IRA funds to public charities during 2006 and 2007.

    • An Uncharitable Trust (October 2006)

      Recently reflecting on the events of 9/11 five years ago, we were reminded how many aspects of our lives and jobs were forever altered that day.  The non-profit world has not been excluded from these changes.

    • What You Get Is Not Always What You Keep (July 2006)

      In a recent newsletter we discussed the strains many non-profit organizations (NPOs) are experiencing with their charitable remainder trusts due to the cyclical nature of the securities markets.

    • Spousal "Right of Election" Against CRT Assets (April 2006)

      In the second quarter edition of our Planned Giving Newsletter, we discussed Revenue Procedure 2005-24 issued by the IRS on March 30, 2005 (see article Much Ado About Nothing).

    • Prudent Investor Rule (April 2006)

      From time to time as managers of non-profit assets, we review the key nuances of the Prudent Investor Rule, which was widely updated and adopted by nearly all states a few years ago.  We think it is important for our clients to do the same.


      (January 2006)

      After five years of a flat market and multiple years of declining interest rates, the current market value of charitable trusts may be underwater compared to their initial gift values.

  • 2005

  • 2004

    • 2004 Legislative Highlights (December 2004)

      The year 2004 was important for California non-profits.  The state's legislature took significant steps in the area of non-profit governance and better donor protection, while at the same time aided the long-term viability of these institutions through changes in gift annuity regulation.

    • What's in a Name? (December 2004)

      Remember when sales people in the financial services industry were clearly identified as stockbrokers, registered representative, insurance salesmen, or mutual fund salesmen?

    • USA PATRIOT Act and Planned Giving (October 2004)

      For decades, money laundering in the United States has been a federal criminal offense.  Financial institutions have always been required to assist authorities in countering money laundering attempts by maintaining programs and filing reports on certain transactions.

    • New California Legislation for Gift Annuities (October 2004)

      As mentioned in our Summer 2004 newsletter, a bill was introduced in the California Senate on January 6, 2004 by Senator Scott that increased the maximum allowable equity exposure of charitable gift annuity reserves from ten to fifty percent.

    • Proposed Legislation (July 2004)

      Proposed Federal Legislation:  Tax-Free IRA Rollovers to Charitable Remainder Trusts. 

      Proposed California Legislation:  Increase to maximum amount of gift annuity reserves invested in common stocks.

    • Tiers and Taxes (April 2004)

      This past November 20, the U.S. Treasury department issued proposed regulations (REG 11089698) detailing new rules for distributions from Charitable Remainder Trusts (CRT).

    • Investing Charitable Remainder Trusts (January 2004)

      Charitable remainder trust, charitable gift annuities, and pooled income funds serve mutiple purposes for both charitable organizations and their donors.  Many charities use these planned giving vehicles to significantly increase their donor base and support by opening more possibilities for a broader range of donor needs.

  • 2003

    • Donation of Income Interest (October 2003)

      If you are a beneficiary of a charitable remainder annuity trust and are thinking of donating your future income stream to the charity, now is the time.

    • Case of the Disappearing Mutual Fund

      (July 2003)

      Trustees of Charitable Remainder Trusts and other life income arrangements may from time to time receive notice regarding their mutual fund investments.  What are trustees' options when notice is received of a proposed merger?

    • Proposed Charitable Giving Legislation (July 2003)

      On April 9, 2003 the senate passed S. 476, The Charity Aid, Recovery and Empowerment ("CARE") Act of 2003 by a vote of 95 to 5.  On May 7, 2003 the House introduced companion legislation H.R. 7, The Charitable Giving Act of 2003.  Among other objectives, the purpose of both bills is to provide additional tax incentives for charitable contributions by individuals and businesses and change the way certain nonprofit entities are regulated.

    • Double Taxation of Dividends (April 2003)

      In early January, President Bush announced a major tax cut proposal to reduce federal taxes by about $700 billion over the next ten years.

  • 2002

    • The Mechanics of Present Value Calculations (July 2002)

      Charitable remainder trusts, charitable lead trusts, pooled income funds, and charitable gift annuities create an obligation to make periodic payments to a beneficiary over the time period specified by the trust or gift annuity agreement.

  • 2001

    • Setting Investment Policy (October 2001)

      In an earlier newsletter (Fall 2000) we discussed benchmarking investment returns and pointed out significant differences between endowments and deferred gifts.  Investment policy must respond to the split-interest nature of life income arrangements.

    • Financial Planning Vs. Financial Statements (October 2001)

      Charitable remainder trusts transfer funds to a charitable organization at some time in the future, usually upon the termination of the life income interests.

    • IRAs as Planned Gifts (April 2001)

      The IRS recently released rules that substantially improve the distribution process for IRAs and qualified retirement accounts.  The changes are clearly investor friendly and offer an opportunity to discuss new IRA strategies with prospective donors.

    • Planned Giving Strategies - Part II (April 2001)

      There are various forms of planned giving arrangements, each with unique characteristics that have evolved to address specific donor needs.  This is the final installment of a two-part article which identifies these characteristics and needs, and explains the corresponding investment approach applicable to these various types of arrangements.

  • 2000

    • Benchmarking Planned Gift Investments

      (October 2000)

      As the pace of making deferred gifts to non-profit institutions has increased, the importance of this asset pool to the remainder interest institution has grown.  What was once a low-profile maintenance effort, run perhaps by the finance department, has come under the scrutiny of trustee board members.

    • Planned Giving Strategies (October 2000)

      There are various forms of planned giving arrangements, each with unique characteristics that have evolved to address specific donor needs.

    • Measuring Investment Results (April 2000)

      How does one respond to a well intentioned trustee who asks, "How are our deferred gifts performing?"  Can an experience level whose sole observations have been of the endowment portfolio provide adequate preparation to successfully evaluate results achieved by Charitable Remainder Trusts, Pooled Income Funds, or Gift Annuity Pools?

    • Valuing Pooled Income Fund Income Interests (April 2000)

      Many charities hold pooled income funds with limited assets and only a few participants, many of whom are unhappy with the level of income being distributed to them.  Faced with the prospect of continuing to administer a fund that is not appealing to the charity's donor base and is not expected to attract additional gifts, these charities often explore options that would allow them to close the fund.

    • Trustee Duties (January 2000)

      The trustee of a charitable remainder trust assumes certain duties and responsibilities under local and federal law, IRS rules and regulations, and the trust agreement itself.  These duties encompass two basic areas, investment and administration.

    • Trading 'Round the Clock (January 2000)

      Valuing securities is a requirement assumed by the trustee, as described in this issue's companion article.  In addition to the instances noted, valuations are necessary at the time of charitable gifting, as well as for estate valuations.

  • 1999

    • Index Fund or Time Bomb? (October 1999)

      Only rarely do we see index funds used in CRT applications.  There is good reason!

    • Changing Donor Expectations (October 1999)

      Earlier this year, we discussed many of the issues needing review before converting older NIMCRUTS to standard unitrusts.

    • Don't Slip If You Flip (April 1999)

      If you are considering an application to convert older NIMCRUTS to standard unitrusts by the June 8th deadline, you have no doubt reviewed the benefits with your beneficiaries and can easily speak to the issue of why the conversion should be allowed from their perspective.

    • Donor Trusteed Gifts (April 1999)

      A continuing concern for charities is the possible erosion of gift (remainder) value of a poorly-managed, self-trusteed charitable remainder trust.