New Method Proposed to Place Value on Gifts

In an effort to help fund raisers determine the value of charitable annuities and other planned gifts more accurately than in the past, the National Committee on Planned Giving proposed new gift-valuation standards at its annual conference here.

The recommended standards are intended to help organizations determine the charitable impact in today’s dollars of planned gifts that the organizations might not receive for 10 or more years. The standards also are designed to help organizations figure out what it costs in salaries and other fund-raising expenses to secure planned gifts.

IRS Rules

Many charitable organizations now calculate the value of a planned gift by employing an Internal Revenue Service method used to determine a donor’s tax deduction on the gift, said Jeffrey W. Comfort, senior director of planned giving at Georgetown University, in Washington, and co-author of the valuation standards. However, using the IRS method to value deferred contributions frequently causes charities to undervalue or overvalue gifts, he said.

“The IRS method is perfect for what it tries to accomplish — determining the tax deduction a donor receives for making a gift — but it is not designed to represent a present value of the charitable impact of any planned gift,” Mr. Comfort said. “Our standards will allow charities to understand the real value of a planned gift.”

Understanding the Dollars

Fred Sansone, director of gift and estate planning at Xavier University, in Cincinnati, said that five years ago he developed a valuation method for the university that is similar to the standards proposed by the National Committee on Planned Giving.

His method helped the university’s development committee better understand the value of a planned-giving program than it previously had, he said, and later helped his director of development get permission from the university’s president to hire a new planned-giving officer.

The National Committee on Planned Giving plans to invite comments on the proposed standards from November 10 to November 30, and expects to publish the standards early next year. Members will not be required to adopt the standards. For more information, visit the organization’s Web site at http://www.ncpg.org, or call (317) 269-6274.