Question: Should a donor’s lifetime giving total be adjusted once the deferred gift annuity payments exceed the value of the gift?
Question: A donor's deferred gift annuity payments have exceeded the value of the gift. Should I adjust their the donor's lifetime giving total?
Answer:
No, you should not adjust the lifetime giving total if the deferred gift annuity payments exceed the original principal transferred. The donor gave you an irrevocable gift of a specific amount. A donor’s lifetime giving total is a figure used by the development office for donor recognition and stewardship.
Think of it as your organization making an investment with your donor’s principal. Charitable Gift Annuities (CGAs), whether current or deferred, are irrevocable. It’s no longer the donor’s money. Both your organization and the donor have made a contract with some risks for both parties.
Once the contract has been signed, either your Business Office or a Third-Party Administrator keeps the records. The IRS and actuarial tables dictate how annuity payments are reported for income tax purposes. However, that has nothing to do with the lifetime giving total in your development system.
The American Council on Gift Annuities is a great resource for best practices, public policies, donor education, and other pertinent topics.
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