The Pentera Blog
July CMFR Jeopardizes Some Gift Annuity Charitable Deductions
by James Brandt, Planned Giving Specialist, Integrated Marketing Department
Gift annuities using the newly adopted (effective July 1, 2010) and slightly higher annuity rates qualify for a charitable deduction when the charitable midterm federal rate (CMFR) is 3.2% or higher. With the July CMFR falling to 2.8% gift annuities at some younger ages won't qualify.
A one-life gift annuity for a 52-year-old will not qualify for a charitable deduction, and a gift annuity for two 61-year-olds meets the same fate. Two 58-year-olds hoping to establish a deferred annuity with payments to start at the age of 65 will also be denied.
Possible Solutions:
1. Create those annuities in July when the May CMFR of 3.4% is still available.
2. Continue using the current gift annuity rates.
3. Wait until the CMFR is 3.2% or higher.
Pentera has creative and effective strategies for marketing gift annuities. Postcards are a great way to let donors know about upcoming changes that may affect them in planned giving. With gift annuity rates increasing July 1, Pentera has a popular postcard featuring more information about the rate-change. Contact Mary at 317-875-0910 x251 or mary@pentera.com to see samples of these postcards.
