The American Council on Gift Annuities (ACGA) recently announced that the suggested maximum payout rates will increase for new charitable gift annuity contracts issued beginning July 1, 2018. Since the rates have not changed since 2012, charities are very encouraged by the increase in payout rates. The suggested maximum payout rates of contracts already in place or of new contracts issued prior to July 1 are unchanged. Organizations may wish to notify prospective donors of the upcoming payout rate increase once the new rates are published on May 15. The ACGA also increased the annual gross investment return expectation on gift annuity funds from 4.25% to 4.75%.
The gift date of the charitable gift annuity should still comply with the IRS date of gift rules for charitable contributions. For example, the date the donor hands the check to the charity’s representative is the gift date. When the donor mails a check to the charity via the U.S. Postal Service, the ‘mailbox rule’ would apply—meaning the postmark determines the gift date. However, the mailbox rule does not apply to checks sent by a private delivery service. Instead, these checks would have a gift date of the date the charity received the check. The suggested maximum payout rate increase applies to contracts with gift dates on or after July 1.
The new ACGA rate recommendations will make charitable gift annuities more attractive to donors. For more information, please visit the ACGA website. https://www.acga-web.org/