With a year’s perspective, this is how we see it …

Most donors weren’t looking to make direct donations from their IRA accounts. What they wanted to do was transfer their accounts, tax-free, to a charitable lifetime income plan. They wanted to retain or increase their income, not give it away or reduce the value of their plan.

That is, unless they could afford to give whatever gift they wanted. Who is the target market for IRA gifts? They are 71 or older, and their retirement is so securely funded that they feel comfortable giving away part of their annual IRA distribution, or even turning to equity to make a charitable donation. For some of these too good-to-be-true prospects, IRA distributions are just a useless addition to their annual tax bill.

But as our real-life prospects watch their home values ​​decline and their investment portfolio falter, how many fit the idealized profile outlined above? Remember, under the transfer provisions, you have been asking them to make a donation as an act of pure charity, from which they will not receive lifetime income or a charitable deduction. Think about that twice.

Wouldn’t IRA donors have given a gift anyway? It seems. Yes, the law made a new category of assets available for donation. But most of those who benefit are loyal donors who have a variety of assets available to choose from when they give a gift.

Perhaps that is why the gifts received have been modest. Respondents to the NCPG survey reported a total of $ 104 million in full IRA gifts received in approximately 6,000 distributions. That makes an average distribution of $ 17,350. Sure, some gifts were bigger.

But remember, by law, none can exceed $ 100,000. And this after all the newsletters and emails we send out to prospects promoting this giveaway opportunity?

Should IRA distributions be counted as planned gifts? Your organization receives a full IRA distribution as a cash transfer. No planned gifts were involved in the delivery. All he did was inform his potential clients about the new opportunity.

It can be argued that IRA distributions are significant gifts and not planned gifts. The donor simply substituted a new asset for others that could have been used to make a full donation. If you had deleted a bequest and made a direct cash donation, would the planned donations have counted that transfer? If not, why count IRA gifts directly?

Many PGOs don’t even count IRA transfers. The results of our fall 2007 survey showed that only 31 percent of respondents counted IRA transfers in total planned giving, while 49 percent counted them as significant and absolute gifts. A strong minority, 18 percent, did not even seek IRA gifts.

Maybe it’s because they haven’t received many. For 83% of respondents, direct IRA transfers accounted for 5% or less of total planned and major giving. For the most successful fundraising operations among our respondents, 91% of those surveyed recorded those results of 5% or less.

Now, what has been the real cost to the planned giving office?

Consider the time that has passed in the last year and a half to catch up with the Pension Protection Act; attend seminars and read tax bulletins; And then try to translate all that complicated information into persuasive marketing pieces for your potential customers. If your organization has received substantial IRA distributions as a result of those efforts, congratulations!

But even if you’ve been successful, remember that the time you spent learning about IRAs was time when you weren’t doing your most important job: getting face-to-face with your prospects; that the IRA distributions you have received could / should be classified as major and unplanned gifts; that were made by donors who probably could have been allowed to make a donation for the same amount or more of other assets, and that, by stripping your retirement account, donors have reduced your ability to make a significant estate donation that, without place Surely the planned giving office could have counted and promoted its prospects.

Bottom line? The IRA rollover has encouraged prospects to consider non-traditional assets as sources of charitable donations. You have provided immediate cash rather than requiring the nonprofit to wait for your gift until the donor’s death.

But let’s do a reality check: your bread and butter are still bequests and gift annuities!

And it’s not just us curmudgeons who say it: More than 50 percent of our survey respondents told us they didn’t expect direct IRA transfers to significantly affect their fundraising totals.