Coincident with the traditional tax-filing day, on April 15, the American Council on Gift Annuities held its semi-annual meeting and affirmed that the suggested maximum rates for charitable gift annuities will remain the same. Below is the text of the announcement from ACGA, and you can find more details about ACGA and the analysis behind the rates at acga-web.org.
Approved by the American Council on Gift Annuities on April 15, 2013
Information last updated April 15, 2013
IMMEDIATE AND DEFERRED GIFT ANNUITY RATES WILL REMAIN THE SAME
The American Council on Gift Annuities (ACGA) board of directors held its semi-annual meeting on April 15. The board conducted its regular review of the assumptions underlying the rates schedule for charitable gift annuities and voted to make no changes to the suggested maximum rates that originally became effective January 1, 2012. The current rate schedule will remain in effect until further notice.
In the current interest rate environment, IRS discount rates in the range of 1.2-1.4% generate a relatively smaller charitable tax deduction. However, the balance for donors is the relatively larger portion of the annuity payment that is tax-free income. Colby is a client of PG Calc, and I especially appreciate one of the new features in the latest version of their Planned Giving Manager. When you are preparing a charitable gift annuity illustration, you can easily get comparisons based on the three available IRS discount rates. The comparison highlights the different results obtained for the charitable tax deduction and the annuity income breakdown based on the current month and the previous two months. For some donors, a high tax deduction is of primary interest, while others prefer more tax-free income.
How are you addressing the question of the tax deduction amount with your donors? Are you getting more inquiries or more gifts this year? Do you have tips to share with other members of the Maine Planned Giving Council community?
Author: Susan Cook, Senior Philanthropic Advisor Colby College