CGA Best Practices - 5 Helpful Reminders
Below are some helpful reminders for your gift annuity program:
- Provide “full and adequate disclosure” of the risks and benefits of a gift annuity as mandated by the Philanthropy Protection Act of 1995 (PPA).
Take time to review the PPA, including the requirements and its penalties for non-compliance. This information should be included when you send a proposal to a donor. Some charities use an attorney to draft a disclosure document to comply, while others may use booklets from vendors that include relevant information.
- Make gift annuity marketing materials friendly to older donors.
The average age range for establishing a gift annuity is 78 to 80 years old so it’s important that marketing materials are easy to read. Using a readable font such as 12 point, paper stock that isn’t too thin or shiny, and using black ink on a white background with plenty of open space on a page are ways to make printed material more legible.
- Always include a disclaimer on your sample gift annuity calculations to highlight the information is for illustrative purposes.
Fundraising professionals represent the non-profits by whom they are employed and cannot provide legal, tax or accounting advice. It is recommended that language suggesting the donor seek professional advice before establishing a gift annuity be included on sample illustrations as well.
- Clarify your organization’s state registration status.
If your organization is not registered to issue charitable gift annuities in all states that require registration and/or notification, your marketing materials should have a disclaimer stating “Not available in all states."
- Obtain a next of kin or emergency contact name and phone number when establishing a new gift annuity.
This can help save a lot of time and headache in solving problems including uncashed checks, locating missing annuitants, returned 1099 forms, and closing out matured contracts.