IRS Applicable Federal Midterm Rate for July 2012 is 1.2%.

The Valuation Rate for New Pooled Income Funds in 2012 is 1.8%. See an expanded explanation of how this rate is calculated.

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In this issue:

• Featured Article: Step Lead Trusts and Shark Fin Lead Trusts Can Perform Well for Family
• HelpClip: Running PGM Help When PGM is Installed on a Network
• Quick Tip: IRS Discount Rate Updated Automatically Via the Internet
• IRS Rules in Favor of Lead Annuity Trusts with Escalating Payments
• Planned Giving Manager 6.6 Released on May 31
• Liabilities for Planned Gifts – Your Role
• Turning Your Planned Giving Manager Proposal into a PDF
• Marketing Corner with Ann McPherson: Content Still Rules
• Upcoming Webinar: Gift Annuity Essentials, June 28
• Come to Group Training in Boston this Summer!

Step Lead Trusts and Shark Fin Lead Trusts Can Perform Well for Family
Over the past two years we’ve written feature articles on both the step lead trust and the “shark fin” lead trust. In each case, we suggested that economic conditions were ideal for setting up these types of trusts in part because of the very low IRS discount rate. Well, it was about 3% then. It is just 1.2% now. With the IRS discount rate at a new record low, it seems worthwhile to revisit these gift plans.

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Past topics...

HelpClip: Running PGM Help When PGM is Installed on a Network
Planned Giving Manager (PGM) 6.6’s Online Help is in a new format that is compatible with Windows 7 and Vista, as well as earlier versions of Windows. A requirement of the new format is that the Help file must be installed on your local computer in order to run. For clients who install PGM 6.6 on a network server (for example, to eliminate the need to install it on multiple local computers), PGM 6.6 automatically installs Help in the default local temp folder of each user’s computer. However, you can override this default behavior and instruct PGM 6.6 to run Help from a different local folder, if you or your IT staff prefer. PGM 6.6 Help describes how.

Learn more ...

Quick Tip: IRS Discount Rate Updated Automatically Via the Internet
PGM 6.6 updates the monthly IRS discount rate automatically. Each time you launch PGM after the 14th of the month, it looks for the next month’s rate on PG Calc’s website. If PGM finds a new rate, PGM imports the new rate automatically. If you go several months between launches, PGM imports all of the IRS discount rates published since your copy of PGM was last launched. If this automatic feature causes problems for some reason, you can turn it off under Customize – Setup - General and maintain your rates manually as before. See “IRS discount rate – Maintaining in PGM” in the PGM Help Index for more details on this feature.

IRS Rules in Favor of Lead Annuity Trusts with Escalating Payments
On April 20, the IRS released Private Letter Ruling 201216045. This favorable ruling finds that a testamentary charitable lead annuity trust may have a payout to charity that is variable and increases over its term without adverse tax consequences. Specifically, the assets transferred to establish the trust will qualify for an estate tax charitable deduction and the trust’s charitable distributions during its term will be deductible. In addition, the trust will not violate the rules against self-dealing, excess business holdings, jeopardy investments, or taxable expenditures.

Although a private letter ruling cannot be cited as precedent, PLR 201216045 does indicate the IRS’s current position on lead annuity trusts that make increasing payments to charity and is consistent with sample lead trust language found in Revenue Procedures 2007-45 and 2007-46.

Planned Giving Manager 6.6 Released on May 31
We promised in last month’s eRate that a meaty update of Planned Giving Manager (PGM) was coming soon. Two weeks later, on May 31, we released PGM 6.6. Enhancements being enjoyed by clients who have installed PGM 6.6 include presentations for bequests, projections for grantor, super grantor, step, and balloon (“shark fin”) lead trusts, automatic updating of the monthly IRS discount rate via the Web, diagrams for bargain sales and retained life estates, and an updated format of PGM’s Help system that is fully compatible with Windows 7 and Vista.

If you are a PGM client and have not yet installed PGM 6.6, please do so today so that you can take advantage of its great new features. If you cannot locate the update email we sent on May 31, please contact Client Services at 888-474-2252 or email us at support@pgcalc.com.

Liabilities for Planned Gifts – Your Role
Many of our client organizations end their fiscal years on June 30. If yours is one of them, you may have received a request to report liabilities associated with your organization's active planned gifts. If not, you may, because Financial Accounting Standards Board (FASB) guidelines require all charities to include these liabilities in their annual financial statements.

Learn more...

Turning Your Planned Giving Manager Proposal into a PDF
Emailing proposals to donors and prospects has become a much more common practice. Many of you know that Planned Giving Manager (PGM) has a feature that will convert a proposal into Microsoft Word, but you may not be aware that a proposal can also be converted into a PDF. Emailing a proposal as a PDF may be preferable to emailing a Word document since the recipient cannot make any unexpected or accidental changes.

In order to convert a proposal to a PDF, you need to have the Adobe Reader downloaded onto your computer. This is a free and easy download (www.adobe.com). Here is how the process works:

1. We recommend that after completing your proposal, that you save it to your local or network drive as a PGM input file. Saving the proposal in the .inp format will allow you to open the file later to make edits. Then go to the File menu and select Print.
2. When the Print window appears, look to see if you have Adobe PDF as one of your options. If so, select it, and click Print (if Adobe PDF does not appear among your printer options, contact your IT department and let them know you would like it added).
3. You will see that your file now has an extension of .pdf. Rename the file and save it to the desired location on your local or network drive.

It is as easy as that! Please do not hesitate to contact Client Services if you need assistance at 888-474-2252 or support@pgcalc.com

Marketing Corner with Ann McPherson: Content Still Rules
For the final installment in our series on Tried and True Marketing Methods, I want to discuss content since it is always relevant, and after your audience, it has the biggest impact on your marketing efforts. Everyone knows that tailoring content to your audience is important, but it’s not always easy to achieve.

Generally, I think content should meet the following three criteria:

1. Content should have utility
2. Content should be entertaining
3. Content should move your audience

Every once in a while I come across the trifecta - content that delivers on all three objectives. To learn more about creating content for the different prospect stages, download our latest white paper, “Cultivation Funnel: How Content Marketing Can Help You Move Prospects from Awareness to Gift.”

Upcoming Webinar: Gift Annuity Essentials, June 28
This Webinar will focus on the basics of gift annuities, providing guidance in terms of the nature and function of gift annuities, common roles of gift annuities in a planned giving program, characteristics of a typical gift annuity prospect, and the responsibilities of an organization that incorporates gift annuities into its planned giving program.

Date: June 28, 2012
Time: 1:00 – 2:30 pm ET
Presenter: Edie Matulka

Register

Come to Group Training in Boston this Summer!
We will be offering our Gift Planning with Planned Giving Manager and Gift Administration with GiftWrap group training sessions in Boston and Cambridge, respectively, in August. These sessions provide a solid foundation for individuals who are new to planned giving and gift administration. These classes may also serve to reinforce the skills and knowledge of experienced gift planners and administrators. We hope you’ll join us. August is a great time to visit Boston!

August 6-7
Gift Planning with Planned Giving Manager
Introductory & Advanced
Boston Common Hotel & Conference Center, Boston, MA

August 8-9
Gift Administration with GiftWrap
Basics & Reporting and Analysis
PG Calc’s Cambridge Office, Cambridge, MA

For more information or to register

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