There's been a lot of public discussion about charitable gift annuities due to a highly misleading and prejudicial article in the May 12, 2009 edition of the Wall Street Journal. Many planned giving gurus (and even not so guru), including national organizations like The American Council on Gift Annuities and The Partnership for Philanthropic Planning, wrote to the Wall Street Journal outraged, pointing out the article's errors.
Too late - it can't be taken back! And letters don't hold the weight that articles with headlines do. Even if there's eventually an apology or correction, the damage has been done, and sadly it hurts charitable gift annuity prospects even more than the charities, although both may feel the impact.
Broadly speaking, both examples of gift annuity "defaults" used by the Wall Street Journal were akin to saying Bernie Madoff's methods were the norm for money managers. Coincidentally, one of the organizations mentioned was allegedly running a Ponzi scheme.
The other had been under previous scrutiny for making "risky and inappropriate investments." They have now filed bankruptcy because a court ruled against them when they were caught changing the beneficiary of an insurance policy that was intended to help a special needs child to their own name. Neither situation involved a nonprofit with a mission driven constituency and committed donor base. Neither was interested in anyone's needs but their own.
Sadly, people who might have benefited from charitable gift annuities will see the article and become fearful. They'll probably never see the experts' response via written letters (which have less impact than the original article) - they'll miss this opportunity, and the charities will miss the gift.
As you all know, I believe, when handled with care, common sense, and in compliance with many states' regulations and oversight, charitable gift annuities are a wonderful way for many donors to improve cash flow for themselves and/or a loved one, while also helping a charity they support. Often, this is the only way the donor might be able to donate the amount involved.
Keep in mind charitable intent and a commitment to an organization's mission should be the motivating factor behind the gift annuity. That's why I'm not a fan of offering the highest interest rate in order to "attract donors." Mission and capability should attract donors. If a prospect is shopping annuity rates, then their interest in your mission is lacking somewhere.
The answer to the question, "Why should I give to you when so-and-so charity is offering a better rate?" is:
Which charity would you want your money to help when you're gone?
Or:
We use these rates because they ensure we can make attractive annuity payments and still maintain the integral strength of this gifting program for the benefit of our supporters and ourselves.
Lorri M. Greif, CFRE, president of Breakthrough Philanthropy, Inc., has more than two decades of experience in the nonprofit community focused on creating and implementing successful planned giving and major gifts campaigns for local and national nonprofits. She has the experience of a seasoned nonprofit fundraiser coupled with the knowledge of a professional consultant.
Her many years of strategic thinking, fundraising know-how, and donor cultivation and stewardship, are now a key resource addressing the needs of Breakthrough Philanthropy's clients, mostly mid-sized to larger nonprofits.
Lorri has a unique skill for building or re-working fundraising campaigns from "the ground up." As the first Chief Development Professional for HIAS, Inc., a 120+ year immigration rescue agency, she created a major gift and planned giving program while accelerating their annual campaign. She changed the organization's fundraising culture by providing extensive training to other professionals and board members about the importance of individual giving versus dependence on government funding. She also created national marketing strategies, defined gift acceptance guidelines for the agency, oversaw adherence to IRS and government regulations, and more.
Lorri was also the National Director of Planned Giving for Women's American ORT (now ORT America, Inc.), a 100+ year-old nonprofit organization, which provides funding for vocational training and re-training worldwide. In addition to directing the program, she created and implemented a national marketing campaign for planned giving that helped to bring participation in the planned giving society to more than 1,000 members. She also helped to create the organization's Diamond Ladder campaign, which brings in millions of dollars in new and increased major gifts.
Additionally, Lorri helped to create or reinvigorate planned giving campaigns for such organizations as the Police Athletic League, Inc. (PAL), Friends of the IDF, YIVO Institute for Jewish Research, the Crohn's and Colitis Foundation, and the National Council on Alcoholism and Drug Dependence (NCADD), to name just a few.
Lorri proudly serves on the board of Women in Development (WID). She is also a member of the Planned Giving Group of Greater New York (PGGGNY), the National Council on Planned Giving (NCPG), the American Council on Gift Annuities (ACGA), and more! Contact Lorri at info@breakthroughphilanthropy.com .