Charitable Gift Annuity Program

A charitable gift annuity is a contract between a charity and a donor. The charity agrees to pay the donor (and/or one other person named by the donor) a lifetime annual income in return for a gift of cash or securities. The payment may continue for the life of a second individual, such as a spouse. The annual payment is a fixed sum, the amount of which is based on the size of the gift and the number and ages of the beneficiaries. Upon the death(s) of all beneficiaries, the residuum proceeds go to the SUNY campus as directed by the donor.

Gift annuities issued in New York State shall comply with New York state law and meet the disclosure requirements under the Philanthropy Protection Act of 1995.

• The charitable gift annuity is a contract between The University at Albany Foundation (Foundation) and the donor, with an addendum to the contract outlining the designation of the charitable gift annuity proceeds upon its termination. This designation will name the SUNY campus to which the residuum will be directed. You should complete the Proceeds Instruction Form as part of the gift annuity contract. 
• The Foundation will make every effort to ensure the program is conducted in compliance with applicable federal and state requirements and any noncompliance items identified are addressed in a timely manner.
• The Foundation will issue both immediate and deferred gift annuities. The deferred annuities may have either fixed or flexible payment-beginning dates.
• The annuity rates offered to donors by the Foundation will not exceed those suggested by the American Council on Gift Annuities (ACGA), although in any given instance a donor may agree to a rate lower than the rate offered. When a donor agrees to a lower-than-published rate, this should be documented by an addendum to the gift annuity agreement.
• The minimum contribution accepted by the Foundation for a gift annuity under the program is $10,000. The individual campus foundation may utilize a higher threshold above this minimum as per their foundation’s gift acceptance policy.
• Gift annuity payments may be made to one person for life or two persons, either concurrently or successively, for life.
• In the case of an immediate gift annuity, the minimum age of the annuitant of a one-life annuity, or younger annuitant of a two-life annuity, is 60. There are no exceptions. The individual campus foundation may utilize a higher age threshold as per their foundation’s gift acceptance policy.
• In the case of a deferred gift annuity within the program, the minimum age of the annuitant at the time of contract is 40 and if the payment-beginning date is fixed or flexible, the minimum age of the annuitant of a one-life annuity, or the younger annuitant of a two-life annuity, at the time that payments begin is 60. There are no exceptions. The individual campus foundation may utilize a higher age threshold above these minimums as per their foundation’s gift acceptance policy.
• Annuity payments are ordinarily made at the end of each calendar quarter, although at the request of the donor they may be made semi-annually or annually. There will be no monthly payments. Annuity payments may be direct-deposited or sent by check, as directed by the donor by completing the CGA Deposit Authorization Form.
• A gift annuity can only be funded with gifts of cash and liquid marketable securities. The Foundation will not accept any other consideration to fund a charitable gift annuity. 
• The Foundation will establish and maintain a gift annuity reserve fund. The Foundation shall oversee the management of the fund, including the investment of fund assets. The full amount of all gift annuity contributions shall be deposited in the fund, and all earnings on fund assets shall be credited to the fund. Disbursements from the fund may be made for the following purposes: to make annuity payments; to pay for costs associated with investing and managing fund assets and administering the gift annuity program; and to make the amount of fund assets attributed to a particular annuity obligation upon satisfaction of that obligation. Disbursements for any other purposes must be approved by the the Foundation Board.
• The Investment Sub-committee of the Foundation Board will provide oversight of the asset allocation of the gift annuity reserve fund(s) with the objectives of (1) realizing a net total return on gift annuity reserves that equals or exceeds the net-return assumption on which the ACGA suggested rates are currently based and (2) minimizing investment risk and volatility.
• In managing the Program, the Foundation may employ agents and advisors to assist with various aspects of operating the program. In particular, the Foundation may delegate to other entities the administration of gift annuities and the investment of assets held in the gift annuity reserve fund(s). The Foundation reserves the right to change the agents and/or advisors. Currently, the Foundation employs KeyBank National Association (Key) for such services. Key provides a variety of services including: Tax reporting to Donor (1099s); Annuity Payments (quarterly check or ACH deposit); Gift Reserve, FASB and Market Value Reports for individual campuses upon request.
• The Foundation does not currently charge a management fee for each gift annuity; the Foundation reserves the right in the future to charge a fee that would be calculated on the annuity’s quarterly fair market value based on an annual rate. Fees would be paid to the Foundation by reducing the amount distributed to the campus at the conclusion of the annuity contract.
• Gift annuity programs will have some annuity contracts that will ‘run dry’ of available funds prior to the end of the annuitant’s life. (In other words, the balance in the assets to support the related payout will be fully expended and the account will reach zero before the death of the sole or surviving annuitant.) As the related payments must continue for the life of the annuitant(s), the college foundation will be required to fund these payments over the remaining term of the annuity contract. It is the obligation of the college foundation to prepay to the Foundation the annual annuity amounts.
• The Foundation will not establish gift annuities in California.

Do you have a prospect who might want information on a charitable gift annuity?

• The Foundation can prepare a basic gift illustration for a SUNY gift officer to present to their donor. 
• Complete a Request for Gift Annuity Illustration.
• Email the completed form to Lori Matt-Murphy, Associate Vice President, Planned Giving at [email protected]. Please allow at least one week for a response.
• Share the illustration with your prospect and explain all the benefits of this type of gift.

What are the steps if your prospect wants to move forward with a charitable gift annuity?

• The Foundation is responsible for preparing the gift annuity contract.
• To ensure we have all the pertinent information, complete the Donor Information Sheet. 
• Email the completed form to Lori Matt-Murphy, Associate Vice President, Planned Giving at [email protected]. Please allow at least one week for us to prepare the contract.
• The Foundation will prepare duplicate gift annuity contracts and send them to the gift officer. The gift officer must:
  • Secure signature(s) of donor(s).
  • Collect funds for the gift.
    • Checks can be made payable to The University at Albany Foundation.
    • Appreciated securities can be electronically transferred to the Foundation’s account at KeyBank. We will provide account information upon request.
  • Obtain copies of driver’s licenses for all beneficiaries as proof of age.
  • Return all items to Lori Matt-Murphy to execute the remaining required signatures on the contract.
• Once fully completed, the Foundation will return one (1) original document and one copy of the document to the Gift Officer who shall hold the copy for their organization’s records and give the remaining original to the donor for their records. The Foundation will keep the second original for their records.
• The Foundation will ensure that the donor receives a tax acknowledgment letter. This letter will confirm receipt of the gift to the donor and outline the donor’s final taxation of the gift annuity.
• The Foundation will oversee the investment of the gift annuity funds, the disbursement of annuity payments to each beneficiary, and send tax forms (1099s) to donors at year's end.
• The Foundation does not currently charge fees to administer the gift annuity funds to cover administrative costs, investment management fees, accounting costs, or fees for state and federal tax compliance.

Q: Why is University at Albany Foundation (Foundation) offering to manage the Charitable Gift Annuity Program?
A: The Foundation has a well-established Charitable Gift Annuity Program with the processes in place and appropriate funds set up. The Foundation had been chosen by the Research Foundation for SUNY to manage the program.

Q: What is the Foundation’s management fee to administer this program?
A: The Foundation does not charge a management fee to administer this program. The program is offered as a service to all other SUNY-related institutions.

Q: What happens if the individual outlives the value of the annuity?
A: Gift annuity programs will have some annuity contracts where the balance in the assets to support the related payout will be fully expended and the account will reach zero before the death of the sole or surviving annuitant. As the related payments must continue for the life of the annuitant(s), the college foundation will be required to fund these payments over the remaining term of the annuity contract. It is the obligation of the college foundation to prepay to the Foundation the annual annuity amounts.

Q: What are the program's investment management fees?
A: The Foundation does not currently charge a management fee for each gift annuity; the Foundation reserves the right in the future to charge a fee that would be calculated on the annuity’s quarterly fair market value based on an annual rate. Fees would be paid to the Foundation by reducing the amount distributed to the campus at the conclusion of the annuity contract.

Q: How is a charitable gift annuity (CGA) included in fundraising or campaign reporting?
A: Per the University at Albany Gift Acceptance Policies and Guidelines, when producing annual and campaign fundraising reports, a CGA is counted in the planned giving category at face value. A CGA is dated using the date the funds were received. The contribution is counted in the appropriate campaign or annual fund report according to this date.

Q: How are charitable gift annuity contributions reported externally?
A: UAlbany reports fundraising activity on an annual basis to the Voluntary Support of Education (VSE) survey administered by the Council for Advancement and Support of Education. Charitable gift annuity contributions are reported as deferred giving in section 3c of the survey along with charitable remainder trusts, pooled income funds and remainder investment in property contributions. CGAs are reported at both present and face value. Two separate overall giving totals are produced in section 3d; one of these counts present value and one counts face value of deferred gifts.

Q: How is investment income handled?
A: Fundraising reports only consider the present value (charitable deduction at time of agreement) and face value (amount of the asset donated to create the CGA) of a CGA. Fundraising reports do not consider investment gain or loss realized by the Foundation. Fundraising reports also do not consider any CGA residuum realized by the Foundation after the donor passes. These amounts are not entered into the advancement database.

Q: Charitable gift annuity vs. deferred gift annuity?
A: UAlbany’s advancement database is able to distinguish between an immediate CGA and a deferred CGA. Both are booked in the same fashion, and deferred gift annuities are reported in the same way. Deferring a CGA payout has the effect of increasing the charitable deduction and therefore the present value is reported.

The University at Albany Foundation Gift Annuity Disclosure Statement

Description of a Gift Annuity

A gift annuity is a simple contract between the donor(s) and The University at Albany Foundation (Foundation). In exchange for the donor's(s') contribution, the Foundation promises to make fixed payments for life to one or two annuitants (usually, but not necessarily, the donor(s)). The amount paid is based on the age(s) of the annuitant(s), in accordance with the Foundation's rate schedule.

Not a Commercial Investment

The act of establishing a gift annuity with the Foundation is not, and should not be viewed as, an investment. Rather, it is a way to arrange for annuity payments while making a charitable donation. In this respect, a gift annuity issued by the Foundation is different from a commercial annuity. While both types of annuities make payments that are usually partially tax-free, the charitable donation aspect of establishing a gift annuity may result in additional tax benefits that are not available when purchasing a commercial annuity. These tax benefits include a current federal income tax charitable deduction (if you itemize your deductions) and possible future estate tax savings.

Gift Annuity Rates

Generally, the gift annuity rates paid by the Foundation are those suggested by the American Council on Gift Annuities, which is a national organization of charities that has been in existence since 1927. These rates have been calculated so as to provide attractive payments to the donor and/or other annuitant(s) and also to result in a significant portion of the contribution remaining for the charity. Because a charitable gift is involved, the rates are lower than those available through commercial annuities offered by insurance companies and other financial institutions.

Assets Backing Annuity

The annuity payments are a general obligation of the Foundation, and they are backed by all of our assets (subject to security interests). As of June 30, 2021 the market value of our total invested funds was $148 million, and they are invested in equity securities, fixed income securities, real assets, and other vehicles. Included is a gift annuity reserve fund valued at $2.15 million in accordance with the laws of the states in which we offer gift annuities. Assets received by the Foundation for gift annuities are managed internally, in a conservative and disciplined manner. If the Foundation should ever fail financially, individuals entitled to receive annuities will qualify as general creditors of the Foundation.

Governance

Responsibility for governing the Foundation, which was established in New York in 1927, is vested in a Board of Directors composed of 35 persons, who are elected or appointed. Common investment funds managed by our organization are exempt from registration requirements of the federal securities laws, pursuant to the exemption for collective investment funds and similar funds maintained by charitable organizations under the Philanthropy Protection Act of 1995 (P.L. 104-62). Information in this statement is provided to you in accordance with the requirements of that Act.

Points to Remember

• A contribution for a gift annuity is irrevocable.
• The right to annuity payments may not be assigned to any person or organization, other than the Foundation.
• The gift date is the date when you actually transfer assets. In the case of cash, it is the date you mail or deliver a check. In the case of an electronic transfer of securities, it is the date they are received into the account of the Foundation. If you have certificates, it is the date they are properly endorsed and mailed or delivered.
• The gift annuity is governed by applicable state laws.

For More Information

This disclosure statement is intended to provide basic information regarding the gift annuities issued by the Foundation, and is not intended to serve as legal advice.

If you have additional questions concerning the Foundation’s gift annuity program, please call or write:

Lori A. Matt-Murphy, Associate Vice President for Planned Giving
1400 Washington Avenue, UAB 226
Albany, NY 12222
Phone: 518-437-5090
Fax: 518-437-5089
[email protected]

• Request for Charitable Gift Annuity Illustration
• Donor Information Sheet
• Proceeds Instruction Form
• Deposit Authorization Form
• Request for Remainder Funds
• Sample Contract Templates
• Memorandum of Understanding