Today we welcome back a special guest to the blog: Stelter’s Senior Technical Consultant Lynn Gaumer, J.D. Lynn returns to share 3 ways you can grow your CGA program.
One of the key takeaways from the American Council on Gift Annuities Conference held earlier this year was that rapidly growing planned giving programs shifted from smaller cash gifts in favor of larger property gifts.
In a new analysis for the 2017 Survey of Charitable Gift Annuities, the ACGA examined the share of gifts funded with property such as stocks, bonds, mutual funds and real estate compared to those funded with cash. The organizations that experienced the most growth in their CGA programs and average annuity size focused their efforts on gifts of property rather than cash. Those organizations that experienced a decline in their CGA programs and a decline in the average annuity size reported a larger share of gifts from cash.
Dr. Russell James, researcher at Texas Tech University, participated in a panel discussion that highlighted the results of the survey. He recently returned from his “lab” after reviewing one million nonprofit tax returns. His research found that planned giving programs that focused on non-cash gifts grew at a larger rate than those that did not.
Promote Non-Cash Gifts
With the stock market experiencing strong growth, focusing on non-cash assets is easy to do. Cash comprises less than 10 percent of the collective assets and wealth owned by Americans, yet we seemingly focus on gifts of cash.
Before your donor writes a check, consider the tax advantages of gifting appreciated assets held longer than one year, like stock, instead. By contributing appreciated stock, donors take an income tax charitable deduction (if they itemize), and avoid capital gains taxes. This is because the appreciated stock is transferred without a sale, so a capital gain is not triggered.
Gifts of highly appreciated assets continue to make sense for everyone, as the donor benefits from both an income tax charitable deduction and avoidance of capital gains tax. Russell James talks about more benefits of focusing on non-cash gifts in his recent Stelter webinar.
Expand Your Marketing
The 2017 Survey of Charitable Gift Annuities found that rapidly growing programs increased emphasis on marketing gift annuities. These organizations reported that board or staff leadership had expanded fundraisers’ ability to market gift annuities. It appears organizations are catching on. Twenty-three percent of respondents expanded their marketing programs for gift annuities in 2017, up from 18 percent in 2013.
Educate Your Donors
One development officer at the ACGA conference makes it her practice to personally thank a donor when she receives a large check. Instead of cashing the check immediately, during the conversation she takes time to educate the donor on the benefits of giving long-term appreciated stock instead of cash.
Often, the donor is unaware of the additional capital gains tax benefits. The donor is typically not only impressed with the personal thank you, occasionally the donor makes a new, larger gift of appreciated stock and the development officer returns the original check.
Still have questions? Feel free to ask them in the comments!