Posted August 1st, 2005

News You Can Use

New rules for CRTs

The IRS has imposed new requirements for charitable remainder trusts (CRTs) designed to assure that funds donated to such trusts are actually received by charity at the termination of the trust. Revenue Procedure 2005-24, which applies to CRTs created on or after June 28, 2005, now makes it necessary for the current or future spouse of a CRT donor to sign a waiver giving up the right to subsequently claim a share of the trust in the case of divorce or the spouse’s death if they reside in a state which allows for such a claim.

To learn more about the impact of Revenue Procedure 2005-24, see www.irs.gov or www.acga-web.org.

ACGA releases new survey

The American Council on Gift Annuities has recently released a survey of charitable entities that issue gift annuities. Highlights from the report include:

  • The average gift annuity amount is almost $60,000, while the median amount is just over $28,000.
  • Almost all charities (97%) that offer gift annuities usually or always follow the ACGA-recommended rates.
  • The majority (55%) of annuitants are female.
  • Donors of immediate-payment annuities average 78 years of age.
  • For details of the survey, see the analysis on page 4.

Giving online reaches 1% of giving

Two recent studies report that giving via the Web is on the rise and has now grown to slightly more than 1% of all donations. The Chronicle of Philanthropy’s sixth annual survey of online fund raising reveals that many nonprofit groups raised more through online giving in 2004 than they did in 2003. In a similar study, The Kintera/Luth Nonprofit Trend Report finds that a large percentage of donors use the Internet to research a charitable organization before making a donation. The study also reveals that in 2004 approximately $3 billion, 1.2% of all donations, were made online.

IRS offers helpful statistics on expanded Web site

The IRS has recently expanded the information included on its Tax Stats Web page. The IRS Web site continually provides updated information about the U.S. tax system that is helpful to those charged with raising funds for charitable organizations. The newly revised Tax Stats site makes searching for information that much easier by prominently featuring the most popular items such as charitable and tax-exempt statistics and individual tax statistics. To access the newly expanded site, see www.irs.gov/taxstats.

Noted philanthropist John Walton dies

John Walton, son of Wal-Mart founder Sam Walton, died June 27, 2005, in an airplane crash in Wyoming. Just three months before his death, John Walton was ranked the 11th wealthiest person in the world, with a personal fortune of $18.2 billion. Walton was known for his philanthropic work in the field of education and through his role on the Board of the Walton Family Foundation. He is survived by his wife and son.

Study reveals wealthiest zip codes

Look to the coasts to find the wealthiest U.S. zip codes, according to a study by American Demographics, a division of Advertising Age. Of the 50 wealthiest zip codes, 45 are either in the northeast or on the west coast. Chicago suburbs account for three of the remaining five, with Atlanta and Paradise Valley, Arizona, completing the list. The New York City area is home to almost half (24) of the top 50 zip codes. On the west coast, the San Francisco area has the highest concentration, with six. Rankings are based on several factors, including the residents’ average household income and average net worth.

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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