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  • 1.  Internal Counting of Annuities

    Posted 07-26-2023 07:21 AM

    Good morning, 

    We recently had an annuitant pass away and we received the residual of her annuity. This brought up a question. When you receive unrestricted residual funds from an annuity, does your institution count this as part of your "unrestricted" fund goal for the year?  We appear to have been counting this as far back as I can tell, but I was wondering what others are doing. Is this just an internal decision as to whether it's included or is it really strange that this is something we've included in our past goal totals? 

    Note: This is not counted in our VSE or overall gifts totals, only as part of our internal Unrestricted fund totals. 

    Thanks for your input! 



    ------------------------------
    Suzie Weesner
    Indiana Wesleyan University
    suzie.weesner@indwes.edu
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  • 2.  RE: Internal Counting of Annuities

    Posted 07-26-2023 07:29 AM
    If you already counted the planned gift when it was established, it is not appropriate to count it again (double-counting). But if never counted then you certainly can count it now. But not necessarily as unrestricted. You must adhere to donor intent and documentation and place the funds where those conversations suggest.

    John

    John H. Taylor 
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard



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  • 3.  RE: Internal Counting of Annuities

    Posted 07-26-2023 08:26 AM

    Certainly John is right about CASE-standard gift counting/reporting.

     

    With respect to internal considerations, I have worked for institutions that included in their budgeting a budget-relieving/unrestricted dollar goal for Advancement to meet.  Such goals may be set up more expansively than "new tax-deductible gifts as defined by CASE."  Internal goals may be less focused on charitable gifts and more focused more expansively on identifying funding to balance the institutional budget.

     

    For instance, at one institution, one of the revenue streams that counted toward such a goal was the contractual income from an alumni credit card program that Advancement was responsible for facilitating.  Were those payments charitable contributions? Absolutely not.  Did they provided unrestricted funds for the institution?  Absolutely.  Did they count toward Advancement's obligation to generate unrestricted funding? Yes, because they were one of the revenue streams in view as the internal goal was established.

     

    So, if the funds from the maturity of an annuity were unrestricted, they could be available to support the institutional budget.  Might those count toward an internal goal for funds to underwrite the budget?  Depends on what kind of the goal was established.  If the goal was "generate new completed unrestricted cash gifts," then no.  If the goal was "underwrite the budget with new unrestricted gifts and other unrestricted revenue derived from Advancement activities," then maybe so.

     

    My US$0.02 worth; the usual disclaimers apply.

     

    Good luck!

    Alan

     

    Alan S. Hejnal (he/him)

    Data Quality Manager

     

    SNAGHTML5cbfa34

     




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  • 4.  RE: Internal Counting of Annuities

    Posted 07-26-2023 08:38 AM
    To clarify, I was not exactly talking about CASE.

    If you have internally counted and reported a gift once, you should not count and report the same gift a second time.

    In the case of a bequest expectancy, you can internally count the anticipation of the bequest much like a pledge, and then the realization as a gift. That's not double-counting!

    But, if you internally count and report a CGA at either the face or present value (or both), you should not count the realized proceeds down the road. That would be double-counting.

    But always, if the donor stipulated a restricted purpose for the realized assets, then those instructions should be followed.

    Of course, if there were no instructions from the donor regarding disposition, as Alan indicates the funds can be treated as unrestricted!

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


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