June 2008 Newsletter

A complete collection of past Connell & Associated authored PG Mentor articles along with other useful items check out Planned Giving Mentor.

May - December CGA: The term May - December marriage often refers to a couple where there is an older and younger spouse, say 10 to 15 years younger. Therefore, it is important to listen to your prospect's needs and tailor your gift strategy to their wants and wishes? I have found many individuals do not respond to the major motivations provided by gift annuities, i.e., to increase their income or decrease their taxes. So you need to practice market segmentation with you gift annuity program! With market segmentation you may have discovered there is a new market for the flexible deferred CGA for an older individual with younger spouse.

This market segment is concerned about preservation of income for the survivor spouse. They are a couple who does not need the modest income from assets to maintain current lifestyle. They would like the asset to grow for the benefit of surviving spouse. While they can benefit immediately from the income tax deduction it is not a primary motivator. Another advantage is they can diversify their assets with little or no current capital gains tax liability. Additionally they may have an asset producing small dividend payments, which they will not miss.

With a May - December CGA or you may also refer to it as a “Partnership Annuity” you donors always have the option of turning the annuity payments on if needed for health or financial reasons.

The surviving spouse (assuming a younger individual) has the option of turning on the annuity payments or making an outright gift of the CGA agreement and then you get the current asset for an immediate memorial for deceased spouse.

Think about those on your top 50 prospect list. Do any of them fit this profile? If so you have some new gift options to present to them. Let me know of your successes.

It caught my eye.... In a recent AARP Magazine, May & June 2008 issue the gift annuity ad for their foundation promoting Charitable Remainder Unitrust was titled: "It's still philanthropy, even if you benefit." Getting the readers attention is more than half the battle in this new world for multi channel marketing. The ad drives the individual to their web site to "Create Your Plan." How is your web site? When was it last updated? Do you use an outside service? For suggestions click on Useful Links and explore web site vendors.

Rich Retirees.... One in four affluent 60 year olds are changing their retirement plans and 40% are downsizing their lifestyle due to recession jitters. findings indicate charity will have a difficult time interesting this group to part with their assets to establish life income agreements as retirees feel more financial stress than six months ago. Source: Bell Investment Advisors

Looking for a title for your next article? How about doing a series of articles called "Why I Give Back." I wish I could take credit for it but my LaSalle University, Phildaelphia, PA gets credit for the title and the interesting personal stories.
GRAT grows in popularity as interest rates decline. Low interest rates (AFR) make a Grantor retained annuity trust (GRAT) is mainly a tool for removing large amounts of assets from taxable estate while cutting gift taxes. The grantor sets up an income stream and the trust makes periodic payments to him or her. Once the trust terminates the assets go to beneficiaries and if the trust earns more than the return paid to the individual the excess goes to the beneficiaries. This is not a tax exempt trust.
TRowe Price reports....the first five years of retirement are critical and poor market performance or outright losses and significantly increase the chances of a retired person outliving their asset during a 30-year retirement.
USA giving stats news release available at this link
Looking for a good post card....to promote your web site. See the post card example McLeod Foundation as a first step toward promotion and I expcially like the personalization.

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