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ACGA and PPP Respond to WSJ Article Re: Gift Annuities
The Partnership for Philanthropic Planning and American Council on Gift Annuities have released statements taking strong issue with a May 12 article from the Wall Street Journal entitled
Full Text of Partnership for Philanthropic Planning response:
May 14, 2009
To the editors:
Mike Spector and Shelly Banjo’s article, “Donors Find Gift Annuities Can Stop Giving” (May 12), presents a distorted view of the role gift annuities play in philanthropy and is potentially damaging to Americans and the charities they support. Such reporting also damages the Wall Street Journal’s reputation as a source of accurate information about the risks and benefits of financial decisions.
The couple featured in this article had a gift annuity with a charity that lost a $6 million lawsuit (for practices unrelated to offering gift annuities) that bankrupted the
organization. The article implies that charities go bankrupt with regularity, and that charities will have trouble making payments for other vague reasons. Neither contention
has any basis in fact. Although laws differ from state to state, and some states offer even stronger protections for annuitants, the minimum expectation in every state is that charities will pay their guaranteed annuitants using every dollar they have, regardless of the market value of endowment or reserve levels.
Especially in current times when everyone is cautious about spending, saving, and giving money, it is unfortunate that the Wall Street Journal chooses to sensationalize a method of giving that is historically very safe, and that enables donors to increase their philanthropy. Readers of the Wall Street Journal should be aware that many thousands of annuities have been successfully completed to the benefit of donor and charity.
The Partnership for Philanthropic Planning represents 10,000 philanthropic planners who work for charitable organizations or as legal and financial advisors to donors. All of these planners are angry today about this unbalanced reporting.
Gary M. Pforzheimer, Board Chair, Partnership for Philanthropic Planning
Tanya Howe Johnson, CEO, Partnership for Philanthropic Planning
Full Text of American Council on Gift Annuities response:
To the Editor:
Presenting both sides of a story has been a journalistic tradition at the Wall Street Journal. Unfortunately, the Journal’s May 12 misleading article “Donors Find Gift Annuities Can Stop Giving” violates this tradition and does a great disservice to the millions of Americans served by our nation’s charities.
The authors’ lengthy description of problems with two isolated charities may grab your reader’s attention, but does immeasurable harm to charities that feed and shelter the homeless, educate our youth, and provide innumerable services that enhance the quality of our lives. Except for the isolated cases in your article, donors receive their annuity payments on time and as expected from reputable charities running legitimate programs.
The American Council on Gift Annuities — with over 1200 sponsoring charitable organizations — has since 1927 been dedicated to both protecting donors and assuring that charities at the end of the day will have gifts to further their missions.
In Democracy in America (1835), Alexis de Tocqueville wrote: “These Americans are the most peculiar people in the world . . . in the local community, in their country a citizen sees there is some need which is not being met. What does he do? He goes across the street and discusses it with his neighbor. Then what happens? A committee comes into existence and then the committee begins functioning on behalf of that need. . . all of this is done by private citizens on their own initiative.”
Americans today continue to help their fellow citizens by giving their time and their assets — many of them with charitable gift annuities. We hope that the inaccuracies in the article don’t needlessly discourage them.
Conrad Teitell, Counsel to the American Council on Gift Annuities