Finally, Planned Giving Gets into the Presidential Campaign!

Just when I thought that I wouldn’t have any topics to blog on until after the election, Planned Giving jumps to the forefront of the presidential election campaign!

I am going to provide the link to the article about Mitt Romney’s use of a charitable remainder unitrust (CRUT) found on this week but I have to preface the link with a few comments:  this is the worst reporting on the charitable arena that I have even seen.  Complete garbage.  The article starts out by calling charitable remainder unitrusts “a popular tax shelter” – implying that is abusive – at least that is the clear message readers get.

Of course, that is complete insanity for anyone with knowledge of this field.  Yes, there were a handful of abusive planners who tried to take advantage of some holes in the law – which were promptly closed by the late 1990’s.

And, to destroy any credibility of the writer and editor, their prime source in the article is none other than Jonathan Blattmachr –  the well-known planned giving outlaw who created the abusive practices that Congress had to shut down.  Sure, if you interview a mafioso, he’ll tell you that killing and stealing is just a part of a day work (for him, but not for me!).  Seriously, this guy has no credibility to be talking about an alleged scheme –  if he was being truly honest for this article, he would explain why Mitt’s CRUT was NOT one of his own abuses (see end of blog post for my own analysis).

Trust me – whoever is reading – only a handful of planners ever did the stuff that Blattmachr came up with that was abusive.  And, from the bits and pieces of info that they found for the article, I can tell already that Mitt’s CRUT was not one of the abusive schemes that involved CRUTs.  The fact that it still has funds in it – after multiple and prolonged recessions – is all the testimony we need.  Hundreds, if not thousands, of charitable remainder trusts have not fared so well.

Ok, so here is the link:

I know it is just politics and writers looking to dig up dirt before their guy loses a close election.  This one just seems insanely incorrect in its accusations.  In fact, the article posits that Mitt’s CRUT only projected a charitable remainder of 8% of its initial principal at the time of its funding.  Excuse me – the writer didn’t actually have the full funding amount or date of funding!    Based on what they do have (end of 2011 principal of $421,201 and a 2011 payment to the Romney’s of $36,696), we can guess that the CRUT rate was probably 8%, max 9%.

Little lesson in planned giving history:  the abusive trusts that Blatt-idiot was promoting in the 1990s were paying up to 80% of their principal to their donors.  8% or 9% CRUTs?  Not only was that a standard (even a low rate for those days), but it even completely acceptable for CRUTs created today.

In other words, the writer was bluffing when he wrote that Mitt’s CRUT had only an 8% charitable remainder projection (2% lower than today’s legal requirement).  He doesn’t have that information and can only be guessing.  Anyway, it was clearly legal at the time and not an abusive Blatt-trust that Congress set out to close down.

Even though I love the idea that planned giving is making some headlines, I have to admit that this was a difficult piece to get on paper.  I think a video of me ranting and raving about how bad this reporting was might have done a better job.

Good news for the Romneys – no one is paying attention to this story.  Too complex.

And, maybe good news for the planned giving world: we might have a President who a planned giving donor!  Who knows, maybe we’ll get the IRA rollover back and maybe it will include an option to roll into a CRT or CGA?

If you are interested in reading another writer’s disgust about this article and a different perspective on tax planning, check out this post from Taxgirl on Forbes:


  1. Regarding the second to last paragraph of your excellent piece — is it a given now that the IRA rollover will not be reinstated for 2012?

  2. That was then, this is now. If he is really interested in preserving his wealth and helping charity, I would guess that there is a CLT hiding in his closet. : ) Thanks Jonathan!

  3. Even if IRA rollover is reinstated, most donors have already made their required minimum distribution. How can a donor wait until mid December to know what to do? Chris Hoyt speaking at PPP said that what is important is to have the IRA Rollover for all of 2013, which would be part of the extender, if passed.

    1. Over the summer I sent out a mailing to our alumni who are subject to RMDs, suggesting that if the charitable rollover is of interest to them, they should delay withdrawing their RMDs to November or December (this was Jonathan’s excellent idea). A few indicated they would. I’d love to get back to them…

      1. We are all waiting to see indications of the extender bill moving forward. Will definitely be sounding the alarm when it goes through!

  4. Jonathan, I appreciate your post. The Bloomberg report was offensive on many levels. Thank you for shining a spotlight on this shoddy bit of reporting. As a former newspaper editor, I can assure you that many in the media are simply lazy, stupid, and biased. It’s up to the rest of us to correct the record.

    As for the IRA Charitable Rollover, there is an excellent chance that this provision will NOT be revived. Both presidential candidates have expressed interest in either capping or eliminating the charitable giving tax deduction. Congress is scrabbling to find new sources of revenue. In other words, the climate is generally not very good on Capitol Hill for the nonprofit sector. Of course, when it comes legislation and budgets, Congress is always full of surprises. But, if the IRA Rollover comes back, it will mean that the sector got very, very lucky.

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