Whether your organization decides to outsource gift annuity administration or to handle administration internally, the best way to store gift data is in PG Calc's GiftWrap gift administration software. Many banks and financial institutions use GiftWrap to store gift annuity data for their charitable clients, and hundreds of charities use GiftWrap internally. GiftWrap software is the industry standard, so your gift annuity data will be stored in a completely transferable format should you change service providers or move from internal to external gift administration. If you would like a recommendation for a bank or service provider that uses GiftWrap, contact info@pgcalc.com. Sometimes decision makers at charities believe that tracking planned gifts is not needed if gift administration will be outsourced. However, outsourcing rarely eliminates all need for internal tracking and reporting. Often an outside provider takes care of payments and tax forms but may not supply reports required for state compliance, financial statements, or management. The need to meet these requirements can spawn duplicate systems in accounting and finance offices, resulting in data inconsistencies, time squandered on complex spreadsheets and fees spent on actuaries and accountants.
A sound approach is to identify who will need access to your gift annuity data. This list will usually include the Development, Planned Giving, Accounting/Business and Finance/Treasurer's offices. One approach is to track all your gift annuity data in one primary database that addresses the needs of all departments and to make it accessible on a computer network with appropriate security. PG Calc's GiftWrap software is ideal in this situation. GiftWrap not only stores comprehensive gift annuity information, but it also uses the data to provide reporting and calculations quickly and without additional cost.
Let us address some common objections to using a database specifically designed for
gift annuities:
"I already have a donor database and don't want to duplicate information."
This is a valid concern and some organizations opt to track their gift annuities in their regular fundraising database. However, tracking annuities in a system designed for fundraising is not ideal for Finance and Accounting. Fundraising databases do not store all the data that turns out to be needed sooner or later, and cannot perform the calculations required for reporting. The unhappy results may include:
- Dependence on paper files for details
- Evolution of secondary databases in other departments
- Reliance on spreadsheets for reporting
- Retyping data into MS Word for Board reports
- Late or incorrect tax forms to annuitants
"We outsource gift administration so we don't need to track gifts internally."
This idea is very appealing, but may not turn out to be true. Charities often need more information than the service provider offers, such as:
- Management reports
- Expectancies
- Cash flow projections
- FASB 116/117 liability reports
- Updated market value reports
- Gift annuity reserve reports for all states
"Our Accounting Office has its own software."
Accounting staff understandably prefer to use their own software but accounting software may not produce reports needed by other departments, leading to duplication of information. A better alternative is to store all gift data in a shared system and use simple upload files to send data to the accounting software to produce payments or generate general ledger entries. With this approach, all departments generate reports, payments, and tax forms using the same source data.
In summary, decisions on where and how to track gift annuity information should be based on the long-term needs of all departments and should cover any gaps in services offered by an external administrator. Using a professional system like GiftWrap ensures that data is accurately tracked from the beginning and readily available to all departments, and can save your organization a great deal of time, vexation, and expense in the years ahead.
For information on integrating GiftWrap with your other software systems, call Tina Yelle at 888-497-4970.
