In a co – authored position paper submitted by the American Council on Gift Annuities (ACGA) and the National Committee on Planned Giving (NCPG), both groups are adamant that the commissioned sale of gift annuities is a dangerous proposition.

The concerns of the ACGA and NCPG are both appreciated and supported by Metamor Charitable Funding, as it is indeed important that the issuing charity not put itself in the crosshairs of the IRS, jeopardize their nonprofit status or create negative tax implications for their donors. That is why Metamor took more than six years to adequately research and create a business model that would meet with ACGA suggested guidelines, and IRS tax law.
 
In addressing these concerns point by point on The Metamor Response page, the careful development of the Metamor model becomes evident.

The text of that November 2, 2002 commentary by ACGA & NCPG
“In response to concerns expressed by many gift planners about commission sales of charitable gift annuities, the National Committee on Planned Giving (NCPG) and the American Council on Gift Annuities (ACGA) wish to reiterate their long standing opposition to this practice. NCPG and ACGA jointly reaffirm the purpose of charitable gift annuities as a method of making a gift to charity, and they continue to oppose the commission sales of charitable gift annuities for the following reasons:

  • The payment of commissions on the sale of a charitable gift annuity may subject a gift annuity reserve fund to regulation by the Securities and Exchange Commission (SEC). The Philanthropy Protection Act of 1995 exempted charitable gift annuity funds from regulation as securities provided that no commissions are paid to solicitors of these gifts. Click Here for the Metamor Response to this issue >>

  • Charitable gift annuities are different from commercial annuities because they are a means of making a charitable gift. If gift annuities are sold by commissioned agents they may appear to be much like commercial annuities. Click Here for the Metamor Response to this issue >>

  • The payment of commissions on the sale of charitable gift annuities creates confusion and uncertainty as to proper crediting of gift amounts on gift receipts issued by charities for charitable gift annuities under the substantiation requirements of IRC Sec. 170(f)(8). Click Here for the Metamor Response to this issue >>

  • The commission sale of charitable gift annuities may violate state solicitation laws and cause a loss of tax exempt status. Click Here for the Metamor Response to this issue >>

  • The payment of a commission on the sale of a charitable gift annuity may significantly reduce the residuum that will be available for charitable purposes. Click Here for the Metamor Response to this issue >>

  • These practices violate the Model Standards of Practice for the Charitable Gift Planner which state that payment of "finders fees, commissions and other fees by a donee organization... as a condition for the delivery of a gift are never appropriate. Click Here for the Metamor Response to this issue >>

Accordingly, NCPG and ACGA jointly urge all organizations engaged in this practice to cease immediately and further urge all charities to refuse to participate in these practices.

Finally, the National Committee on Planned Giving and the American Council on Gift Annuities urge all charities that issue charitable gift annuities to (1) comply fully with applicable federal and state regulations, and (2) maintain adequate financial reserves, responsibly managed, to assure payments to all annuitants for the duration of their contracts.”

...continue: The Metamor Response to the ACGCA / NCPG Position Paper >>

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