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Counting Life Income gifts as income

  • 1.  Counting Life Income gifts as income

    Posted 01-10-2022 10:12 AM
    Hi all,

    We count Life Income gifts (CGAs or CRUTs) in our Campaign at their Face Value at the time the gift is established.

    My question is, at what point should we be recording Life Income gifts in our Gift Income reports? From what I can tell, we don't appear to be currently counting them either when they're established or when they have matured.

    Thanks!

    ------------------------------
    Gwen Donev
    Director of Advancement Services
    Gustavus Adolphus College
    gwendonev@GUSTAVUS.EDU
    ------------------------------


  • 2.  RE: Counting Life Income gifts as income

    Posted 01-10-2022 10:48 AM
    They always count!  The IRS deductible value should be included in your VSE submission.  And, beginning next year, you will also report the face value.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Counting Life Income gifts as income

    Posted 01-10-2022 11:09 AM
    We've included them in our VSE reporting per the prompts in Section 3c. Deferred Giving, but they haven't been pulling in to our monthly Gift Income reports for internal goal reporting and tracking.  I'm wondering what is the most appropriate way to report them in this context?  So if we take a CGA that was established this FY for example, we know the following information; which is most appropriate for this purpose?:
    Face Value = $25,000
    Deductible Amount = $9,689
    Future Amount = $12,500
    Received Amount = $25,000




    Original Message


  • 4.  RE: Counting Life Income gifts as income

    Posted 01-10-2022 11:25 AM
    I also suggest to my clients that they report internally what they report externally.  As such, irrevocable gifts should be reported in the gift income reports.  However, doing so assumes that you have also included those in your goal-setting exercises.  So, since you did not establish your current year goals with these in mind, I would wait until next year to include them.

    Which values you decide to include will also depend on which values you use for setting goals.  However, even if you opt to use the face value, as many institutions will, I believe it is important to also report the IRS value.  Your internal leadership needs to understand that you do not have that full amount to spend!

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


  • 5.  RE: Counting Life Income gifts as income

    Posted 01-10-2022 11:27 AM
    That's valuable insight; thanks much!
    Gwen




    Original Message