Is There a Way to Unsay Something?

There's been a lot of public discussion about charitable gift annuities due to a highly misleading and prejudicial article in the May 12, 2009 edition of the Wall Street Journal. Many planned giving gurus (and even not so guru), including national organizations like The American Council on Gift Annuities and The Partnership for Philanthropic Planning, wrote to the Wall Street Journal outraged, pointing out the article's errors.

Too late - it can't be taken back! And letters don't hold the weight that articles with headlines do. Even if there's eventually an apology or correction, the damage has been done, and sadly it hurts charitable gift annuity prospects even more than the charities, although both may feel the impact.

Broadly speaking, both examples of gift annuity "defaults" used by the Wall Street Journal were akin to saying Bernie Madoff's methods were the norm for money managers. Coincidentally, one of the organizations mentioned was allegedly running a Ponzi scheme.

The other had been under previous scrutiny for making "risky and inappropriate investments." They have now filed bankruptcy because a court ruled against them when they were caught changing the beneficiary of an insurance policy that was intended to help a special needs child to their own name. Neither situation involved a nonprofit with a mission driven constituency and committed donor base. Neither was interested in anyone's needs but their own.

Sadly, people who might have benefited from charitable gift annuities will see the article and become fearful. They'll probably never see the experts' response via written letters (which have less impact than the original article) - they'll miss this opportunity, and the charities will miss the gift.

As you all know, I believe, when handled with care, common sense, and in compliance with many states' regulations and oversight, charitable gift annuities are a wonderful way for many donors to improve cash flow for themselves and/or a loved one, while also helping a charity they support. Often, this is the only way the donor might be able to donate the amount involved.

Keep in mind charitable intent and a commitment to an organization's mission should be the motivating factor behind the gift annuity. That's why I'm not a fan of offering the highest interest rate in order to "attract donors." Mission and capability should attract donors. If a prospect is shopping annuity rates, then their interest in your mission is lacking somewhere.

The answer to the question, "Why should I give to you when so-and-so charity is offering a better rate?" is:

Which charity would you want your money to help when you're gone?

Or:

We use these rates because they ensure we can make attractive annuity payments and still maintain the integral strength of this gifting program for the benefit of our supporters and ourselves.