Guest Post – To CGA or Not CGA, That is the Question

A posting by Bob Cohen, Tamar Fink Agency

In the current and projected environment of rapidly improving healthcare, many nonprofits are viewing certain Charitable Gift Annuities as a liability rather than as an opportunity. The legal and contractual obligation pay a fixed rate / sum of money to a donor over his / her / their lifetime, has understandably made many organizations (and their boards), extremely nervous.

In many cases, the very gifting technique that has been around for decades and has helped build many nonprofit organizations, is now threatening those same organizations based on a commitment made prior to such increased life expectancies.

Low Interest Rates

Additionally, in the currently abysmal and historically low interest rates environment, donors are being presented rates of return on their money that many find insufficient and not at all compelling to complete the gift. Therefore, with risks and returns going in opposite directions, the answer must be for nonprofits to discontinue or at least temporarily retire their Charitable Gift Annuity program, right? WRONG!

Charitable Gift Annuity Alternatives

Charitable Gift Annuity Alternatives exist that address both the risk and the return concerns of the traditional CGA program. Properly structured and presented, nonprofits can get back into CGA arena (and for smaller nonprofits, getting into the CGA arena for the fires time), without the “what if’s”, “subject to’s” and / or interest rate / longevity risks.

Lastly, a traditional Charitable Gift Annuity program requires a great deal of oversight, costs and administrative effort. Many nonprofits choose not to venture into this arena for these reasons alone. Once exposed and properly educated on the CGA Alternative platform, a nonprofit is relieved of these obligations as well.

Solutions to the above referenced issues are simple but not always well known. Please contact me at cohenb@tamarfink.com for a more in-depth understanding of the Charitable Gift Annuity alternative and the resource available to establish this program.

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Bob’s focus is in the life insurance and charitable planning arena, leaving the investment and comprehensive financial planning disciplines to other qualified professionals. Specializing in the evaluation of mispriced and underperforming policies. Bob remedies years of in-force policy neglect and mismanagament. Reconciling in-force policy projections with reality, Bob “rescues” lapsing policies through effective carrier negotiations to acquire new, favorably priced policies, including for individuals with “pre-existing conditions.”

Bob is also a partner of Tamar Fink Charitable Advisors (TFCA), supporting Development Officers to expand their donors’ charitable capacity and maximize their giving. TFCA has completed over $700 million of charitable gifts for both U.S. and international non-profits.

Bob is a National Merit Quality Award recipient; an industry honor recognizing responsible and appropriate planning recommendations and is a measure of the trust and confidence earned through his clients.

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