Donors Over Age 70.5 Can Now Fund a CGA or CRT with IRA $!

I have been waiting for around 20 years for this!!! (Back in 2002, I already had marketing templates ready to go to promote these!!!).

Here is are links to PGCalc’s summary posts on this big Planned Giving news:

In short, donors age 70.5 and older will be able to establish CGAs (CRTs are less likely) for up to $50,000 each year from their IRA accounts – no tax as a distribution and it counts towards your RMD!!  All income received from these annuities will be 100% ordinary income and the donor will not receive a charitable deduction.

I think this is an amazing turn of events for the planned giving world!

More to come on this and Secure Act 2.0.


Cat Got Your Tongue? Learn How to Start the Planned Giving Conversation

Fan Art] Cat Got Your Tongue By Katx-fish On Deviantart - Cartoon - Free Transparent PNG Clipart Images Download

I tell my clients all the time that in the planned giving world, people skills will take you much farther than technical skills.

You might understand CRUTs and CRATs inside and out; know the latest tax-law changes by heart; and have the ability to set up a CGA with your eyes closed. But if a fundraiser clams up when it’s time to have a conversation with donors and prospects, all that knowledge will be about as useful as a snow shovel in Florida. And if you can’t initiate a dialogue or make the ask, your prospects will look for a fundraiser (and a new nonprofit) that can.

But when you possess the ability to have an effective, engaging conversation, your prospects suddenly turn into donors; your donors turn into repeat donors; planned gifts increase, along with major and annual gifts; and your reputation grows (along with your career).

You’ll also find it’s much easier to gather information for donor stories—a must for creating a powerful, emotional connection that inspires other prospects to give.

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SAVE THE DATE – FEBRUARY 1, 2023 2:00 – 3:15 PM EST

The truth is, even seasoned fundraisers sometimes have trouble initiating a conversation. There are times that making the ask feels like an impossible task. Some prospects or situations are just trickier than others, and sometimes your usual, tried-and-true methods will fall flat. 

That’s why, in conjunction with,  I will be giving a new course on February 1st on initiating planned giving conversations where we will show you how to find the clues to begin the dialog and close the deal.

Put your doubt and uncertainty in the rear-view mirror. Brush up on your donor conversation skills and start the new year strong. This exclusive PlannnedGiving.Com course is a must-have for anyone who’s serious about planned giving. You’ll learn how to:

  • Develop your “Legacy Opener.”
  • Initiate a planned giving conversation
  • Select good prospects.
  • Understand those prospects’ mindsets, motivations, and aspirations.
  • Identify life events that are good triggers for a planned giving dialogue.
  • Overcome the greatest hurdles to a legacy conversation.
  • Discover if they have a will or an estate plan, and know what to suggest if they don’t.
  • Close on a gift.
  • Gather exceptional information for a donor story.

Don’t fumble another planned giving conversation. Sign up for our new course today and take your nonprofit (and your career) to the next level.


A Tale of Two Gifts

I have wanted to share these two gift stories for a long time and yesterday, I learned the fate of one that finally got me to write.  Read to the end!

Two donors, both serial gift annuity donors (i.e. do many CGAs with multiple organizations).  Both coming to two separate clients of mine looking to create a new CGA.  One gift gets closed, AND the donor kicks in extra hundreds of thousands of dollar in immediate gifts that would not have happened without the planned gift.  The other donor just let me know that we missed our shot this year, maybe next year.

There are some very interesting lessons in both stories.

Donor 1 – Huge Success – In the spring, he approached the nonprofit about establishing a CGA.  Not having a program at all, I recommended using an independent foundation willing to offer CGAs on behalf of other charities.  But, this ultimately fell through as the donor had two particular requirements that the foundation would not agree to – he wanted annual payments with the first payment coming at the onset of the gift and a higher than ACGA rate – both doable but unusual.

Here are some of the basics of the offer:  joint annuitants, ages 85 and 80, annual payments, $200,000 cash funding, wanted .5% higher than the ACGA on their ages, first payment at beginning of annuity (not a great idea as it hampers the long-term investment of the gift corpus).

Sounds like not such a good offer?

But, I ran numbers, projecting the risk associated with this offer and concluded it was worth it to accept!  So, I created a “gift annuity program” just for this gift!  You see, if you look at CGA risk carefully, you will realize that the most risky gifts are from people in their 60s and younger.  Once the annuitants are in their 80s, you need to find a way to accept the gift, even at .5% higher than the ACGA.

In any case, we priced out reinsurance and guess what – the charity could accept the CGA under his conditions (first payment actually would be in early January 2023) and turn a nice profit!  For approx. $130,000, the charity could purchase a commercial annuity on the lives of the annuitants that would guarantee their payments for life.  Not only that, if both annuitants pass away within 5 years, they actually get refunded part of the purchase price.

In other words, the charity netted $70,000, which could be spent immediately or invested for later use.

This wasn’t quite legal “reinsurance” as the charity was still legally responsible for the annuity payments but the company issuing the commercial annuity was an A+ rated well known company. They will even send the annuity checks directly to the donor.

Donor was very pleased that we accommodated his wishes (I knew we were competing with other charities so I was very generous on giving him a higher rate than the others but I also know that my client was going to benefit either way – so why not close the deal).  So much so, that he committed more than $100,000 in immediate gifts!

And, just this week, the donor got a tour of the institution and is likely to do more CGAs and more immediate gifts!  An around “win win.”

(Note: buying a commercial annuity to cover CGA payments could work under certain circumstances but not ALL circumstances. Key was that both the donor and the charity were based on Florida – could never have worked in New York, for example.  Also, the amount was crucial – $200,000 was big enough. I am not sure how low we could have gone.  For sure a minimum of $100,000.  Also, we had a great financial advisor help us who was able to compare commercial annuity options from among several companies.)

Donor 2 – Failure (for now) – This donor already had existing CGAs with this client as well as several other nonprofits but hadn’t done any for my client in many years.  He reached out to staff for two reasons.  Firstly, he wanted an update on a pre-existing endowment fund and there were issues that needed to be cleared up.  Secondly, assuming the charity could be responsive to his first request, he was ready to do another $50,000 or $100,000 CGA.

He wasn’t looking for anything unusual with the CGA – ACGA rate and regular quarterly payments.  But, HE WAS CLEAR THAT HE NEEDED SATIFACTION REGARDING HIS ENDOWMENT BEFORE MOVING FORWARD.

Unfortunately, the client just wasn’t responsive enough.  By the time, they addressed his endowment issues, he had already made this year’s CGAs with other nonprofits and let me know that this was the reason.  Maybe next year.

Lessons for fundraisers.

CGAs from older donors – 80+ are a very good deal for your institution.  Find a way to accept them and depending on the state your are in, reinsurance can be a great way to avoid risk and free up cash immediately.  Of course, you may have state licensing issues if you go higher than the ACGA – check with counsel!

Most important – be very responsive to planned giving donors like this!  Once you show them that you care, and that your organization is financially sound – based on the quality of your response – you are in a great position to get another gift!

Lastly, I am seeing an uptick on CGAs. I can’t tell you that this is across the board but something tells me that interest is picking up steam.

Thank you for reaching the end of this post!  I will try to keep writing these as gift situations unfold.



Where is planned giving going in the next few years?

The Challenges of Predicting Future BehaviorGood luck being a new Prophet.  Back in the 1990s, a few entrepreneurial professors prophesied that nonprofits would be the beneficiaries of trillions of dollars in a massive generational wealth transfer, much of which was supposed to reach nonprofits by 2017.

Well, that story was milked for many years (probably for profit, not prophet) while the predictions never came close.  Click here to see a prior article on the topic.

So, why am I back with my own predictions?

Well, the demographic numbers are not pretty for the United States.  But, they are for planned giving (just not on the time table of prophiteers referred to above).

Just take a look at this age 65+ percentage of population chart:


Red means emergency – and the entire country is going red (i.e…super aged) by 2030.

So, there will be a wealth transfer.  How much, who knows?

But it will be a lot and nonprofits who will be losing perhaps the greatest giving generation in history (the Baby Boomers) need to pivot toward planned giving very quickly if they want to maximize their opportunity for building their endowments (i.e…large sums not in the operating account).

If you want to the latest details on planned giving and demographic and how to get yourself and your organization ready, check out my latest Planned Giving Boot Camp for MGOs!