We are pleased to present the results of the third national survey of gift annuities. The first comprehensive survey was conducted in 1994, and it was repeated in 1999. Because the first two survey reports were greatly valued by charities, the American Council on Gift Annuities (ACGA) authorized still another update. ACGA anticipates that it will continue the surveys, spaced at five-year intervals. The surveys enable charities to evaluate their own gift annuity programs by measuring their results against national averages, and they assist the ACGA in one of its primary roles, recommending gift annuity rates.
During much of the period between the first two surveys, the ACGA in particular, but also charities in general, were preoccupied with the Ozee lawsuit that had been filed in a federal court in Texas. The 1999 survey revealed how that lawsuit had affected annuity policies and practices, and it also indicated how charities were responding to the many new developments regarding the regulation of gift annuities.
The five-year period between 1999 and 2004, the year in which data from the third survey were collected, saw the most severe bear market in 30 years. This caused an erosion of the gift annuity reserves in many charities and renewed attention to the financial risk inherent in gift annuities. The third survey has measured the level of gift annuity activity during a time when stock values fell and interest rates have remained low. It has also disclosed some of the steps charities have taken to control risk.