Here is a situation encountered recently with a gift of stock to fund a charitable gift annuity.
Our normal process for a charitable gift annuity is:
(1) Fundraiser discusses a CGA,
(2) Donor completes a CGA application,
(3) Charity accepts the application,
(4) Donor's stock received by Charity's broker, and
(5) CGA contract issued.
* The date of gift, date of CGA contract and date of valuation of the stock are all the same based on step #4 because at that point both the application is accepted and the assets have been received.
We had a situation where the order was very different, which led to a discussion about the appropriate date of gift:
(A) Fundraiser solicited Donor for an outright gift,
(B) Donor's stock received at Charity's CGA broker, not outright gift broker,
(C) Fundraiser and Donor discuss Donor's intent and Donor wants a CGA,
(D) Donor completes a CGA application,
(E) Charity accepts the application, and
(F) CGA contract is issued.
* In this scenario, several days elapsed between stock arrival and application acceptance. After consulting with counsel, the stock was determined to be revocable until such time the application was accepted since the stock contribution was tied to a contract (not an outright gift of stock). Therefore the date of gift, date of CGA contract and date of valuation of the stock are based on step E.
This timing issue could have created a donor relations problem had the stock been given, say, December 27 and the CGA application accepted, say, January 10. To prevent this type of problem, a Fundraiser will need to clearly communicate with the Donor about the urgency for completing all steps for a CGA before year end.
I am sure there are other approaches or lessons, so please share your insights.
Thanks,
Mark
Mark W. Metivier
Assistant Vice President and Controller
UVM Foundation > 411 Main Street > Burlington, VT 05401
Office 802-656-8401 > Mobile 802-488-0449 >
mark.metivier@uvm.edu