Jul 2018 AFR: 3.4%
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Two Planned Gifts that Make the Perfect Blend

I have written about a number of blended gift options always combining a current and planned gift.  That’s why this next combination doesn’t seem to fit.  Charitable gift annuities and charitable bequests are both considered planned gifts.  However, when combined in a blended gift arrangement, they have the same impact as the other blended gifts we have looked at in prior posts.

This gift blend works well for a donor who wants to make an immediate gift and likes the idea of fixed lifetime payments.  The donor also finds attractive the ability to make his or her giving go even further with a bequest to support your cause.

How a Charitable Gift Annuity and Bequest Works as a Blend

In this gift combination, the charitable gift annuity works like the current or immediate component of the gift blend. That is because when a charity receives a transfer of cash or assets in exchange for a gift annuity, the charity has access to the gift right away.

While it is true in theory that the charity could take and spend the gift right away, this is not recommended.  The American Council of Gift Annuities (ACGA) best practices recommend that the charity place the full gift value in its reserve account.  Also, if the gift annuity contract is issued in a highly regulated state (such as California, Washington or New York) the state will require that a significant portion of the gift be maintained in reserve to ensure that there are sufficient funds to meet the annuity payment obligation.

The charitable bequest serves as the planned gift portion of this blended gift, enabling the donor to make a commitment today for a future gift made through their will or trust.  While the gift annuity will produce an income tax deduction at the time the gift is made, the charitable bequest will result in estate tax savings from an estate tax deduction only if the donor passes leaving a taxable estate.

For more ways to blend gifts and present these ideas to your donors, please contact Crescendo and ask for a free trial of our new blended gifts software.

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About Kristen Schultz Jaarda, JD, LLM

Kristen Schultz Jaarda

Kristen Schultz Jaarda is Executive Vice President of Crescendo Interactive, Inc. She specializes in charitable tax planning and online marketing for planned gifts. She is responsible for client education and leads Crescendo's marketing services and support team. She is a nationally recognized speaker, conducts seminars nationwide and is a principal faculty member of GiftCollege.

Kristen serves as a board member for the American Council on Gift Annuities (ACGA) and as a member of the ACGA Rates and State Regulations Committees, Editorial Advisory Board member for Planned Giving Today, Committee Member for the ABA Charitable Planning and Organization's Group, past Legislative Chair and a board member for the Partnership for Philanthropic Planning of Greater Los Angeles (PPP-LA), a member of the Ventura County Planned Giving Council and a committee member and volunteer for several California charities. She writes weekly for CrescendoTweet and her planned giving blog.

Previously, Kristen served as Counsel to the Assistant Secretary of Education in Washington, D.C. and was Oversight Counsel to the U.S. House Committee on the Judiciary. Prior to that, she worked in a public affairs law practice. Kristen graduated from UCLA School of Law where she was Law Review Editor. She completed her Tax LL.M. with honors at Loyola School of Law. Kristen is a member of the California State Bar, D.C. Bar and the Maryland State Bar.


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