The topics below address major events in the history of gift planning and its public policy contexts. My goal is to add new essays on these and other topics every month or two. For now, many of the topic headings are place-holders. I have divided the topics into six historical periods. Please browse around.
The history of life income gifts is long, international, and interwoven with subjects like the law of property and the development of personal finance. There is an army of scholars researching and writing about many related topics, though their primary interest is rarely charitable gift planning. The essays below rely upon and draw freely from excellent work by historians of philanthropy and other fields, whose contributions are carefully noted. Please respect and acknowledge these source materials.
Modern American Gift Planning: 1969 to the Present
The massive Tax Reform Act of 1969 clarified the rules for charitable remainder trusts and other planned gifts, stimulated rapid growth in the number and value of life-income gifts to charity, and led gift planners working for charities and for-profit firms to form local, regional, and national planned giving councils for technical training, networking, and sharing of best practices. After its proposal for a national training and certification program was rejected, the National Committee on Planned Giving regained moral and political authority by adopting an ethical code named Model Standards of Practice for the Charitable Gift Planner. Antitrust challenges to standard best practices in gift annuities and charitable remainder trusts were resolved by Federal legislation. Topics:
- Context, process, contents, and after-effects of the monumental Tax Reform Act of 1969
- Formation of local and regional planned giving councils
- Leadership by Charles Johnson and the Lilly Endowment
- Organization and early achievements of the National Committee on Planned Giving (NCPG), now known as the Partnership for Philanthropic Planning (PPP)
- The First Ethical Standards for Gift Planners: A Fledgling National Association Earns its Wings
- Failure to Launch: NCPG’s First Attempt at Shaping the Profession of Gift Planning
- NCPG Governance Evolves to Serve a Booming Field
- Tax Reform Acts Close Door on Some Abuses, Create Openings for Others
- What Business Are We In? A Modern Code of Ethics for Charitable Gift Planners
- National Associations Back Away from Prohibiting Commission-Based Fund Raising
- The CANARAS Group Develops Ethical Codes for the Profession
- NCPG adopts Models Standards of Practice for the Charitable Gift Planner
- Model Standards received with enthusiasm by most – but not all gift planners
- Appendix 1: Model Standards of Practice for the Charitable gift Planner
- Appendix 2: The CANARAS Convention
- Appendix 3: The CANARAS Code
- The Texas Lawsuit, Philanthropy Protection Act of 1995, and Charitable Gift Anti-Trust Immunity Act of 1997
- SEC action against the Mid-America Foundation (2001) and “We the People” (2013) for securities fraud: selling investments masquerading as charitable gift annuities
Philanthropic Planning in the United States, 1900-1968
A very successful national gift annuity campaign by the American Bible Society spurred many other charities to start gift annuity programs in the Roaring Twenties. Under the umbrella of a national council of churches, business and charitable leaders collaborated in 1927 to develop a voluntary national system of recommended annuity payment rates and other best practices for charitable gift annuities through a Committee on Gift Annuities (now ACGA). Colleges and universities like Dartmouth, Stanford, and Pomona developed sophisticated gift planning programs. Q: What abusive behavior prior to 1969 had to be “reformed” by the Tax Reform Act that year? A: Donors designed charitable trusts to benefit themselves and their businesses, rather than charities. Topics:
- America falls in love with gift annuities: The Roaring Twenties
- Calculating Gifts: Introduction (revised 8/13/2014)
America fell in love with gift annuities in the 1920s. In their enthusiasm for receiving gifts in exchange for fixed, lifetime payments, too many charities committed avoidable errors. George Huggins proposed a solution based on actuarial science. Over ten Conferences on Annuities from 1927-1959, Huggins and other leaders changed the world of gift planning by applying statistical methods to analyze gift experiences and develop standards of practice. Charities, professional advisors, legislators, and regulators created a robust public policy framework based on concepts like present value and average annuitant mortality. This is the first of a series of essays.
- How the modern system of gift annuity rates manages the uncertainties/ probabilities
- Planned giving in American higher education from 1930 to 1968:
- Dartmouth College
- Stanford University R Plan
- Pomona College pushes the boundaries of tax advantages for charitable life-income trusts
- Milestones in public policy: the Blake and Palmer cases
- Charitable foundations and trusts after WWII: Self-dealing, nondisclosure, and “un-American activities”
Charitable Gift Planning in the United States during the 19th Century
Life-income gifts in the United States were born between 1830-1850. Demand for personal financial products such as life insurance and retirement annuities was stimulated by entrepreneurial businessmen using modern marketing strategies. The American life insurance industry provided best practices, public policies, marketing strategies, and staffing models for charitable gift annuity programs, and commercial bonds provided a familiar analogy for annuity contracts. Fundamentally important public policy developments in our young nation, headlined by the Supreme Court decision in Vidal v. Girard’s Executors (1844), affirmed the legal validity of charitable trusts.
The artist John Trumbull gave his best paintings of the American Revolution to Yale College in 1831 in exchange for a life annuity. Yale scientist and entrepreneur Benjamin Silliman overcame financial, legal, and donor-relations challenges to plan the gift, with help from New York attorney Peter Jay, who was also a leading advisor for the American Bible Society (ABS). The Bible Society issued its first gift annuity in 1843, but after receiving half a dozen requests from other potential donors, ABS had second thoughts about financial and legal risks. A groundbreaking report by Judge Luther Bradish to the board of the Society in 1848 provided a learned legal defense and “general rule” for the systematic marketing and administration of charitable gift annuities. Topics:
- Explosive growth of the U.S. life insurance industry, 1830-1870
- A (very) brief history of personal financial economics, mortality tables, and actuarial science
- Benjamin Silliman: The Gift Planner Behind the First Modern Gift Annuity
John Trumbull offered his best paintings of the American Revolution to Yale College in 1830 in exchange for a life annuity. Benjamin Silliman, the leading scientist in the United States, overcame financial, legal, political, and donor-relations challenges to arrange America’s first charitable gift annuity, create the world’s first college art gallery, and endow it with paintings by the chief visual recorder of America’s War for Independence. He made it all work — and we are the beneficiaries. Part 1 of 3.
- Benjamin Silliman: The Gift Planner Behind the First Modern Charitable Annuity, Part 2 of 3
Artist John Trumbull offered to give his best paintings of the American Revolution to Yale in exchange for “a competent annuity for life.” Gift planner Benjamin Silliman devoted 18 months to making this proposed gift a reality. His first challenge: financing construction of the first art gallery on a college campus. Silliman mastered changing currents of public policy in lobbying successfully for a state grant to a private college.
- Benjamin Silliman: The Gift Planner Behind the First Modern Charitable Annuity, Part 3 of 3
The first modern gift annuity contract committed Yale to make fixed payments for the unknowable length of a person’s life. Attorney Peter Augustus Jay adapted complex ideas drawn from his experience with life insurance, pensions, and banking for charitable purposes — a giant leap towards the professionalization of charitable gift planning. Includes an important brief history of life-income gifts.
- Stephen Girard’s testamentary charitable trust and the U.S. Supreme Court: How a Supreme Court argument in 1844 about the history of charitable trusts defeated Daniel Webster; approved the largest gift to charity in the brief history of the United States, from financier Stephen Girard; and opened the door to life income gifts to charity in the young nation.
- Judge Luther Bradish’s report on charitable gift annuities for the American Bible Society, based on the Vidal case, provided a “general rule” for risk management
- Making the U.S. Safe for Gift Annuities
A 19th-century reformer named Elizur Wright, the “father of life insurance,” built American consumer confidence in life annuities.
- Surprising facts about charitable gift annuity programs in the 19th Century
Philanthropic Planning in the British-American Colonies
From the European discovery of America through the War of Independence for the United States, immigrants and Native Americans held an extremely wide range of ideas and customs of charity. While the British colonies officially observed the common law, new economic, social, and political forces compelled colonists to re-imagine their traditions. Topics:
- The Mayflower pilgrims, and charitable bequests by early British-American colonists
- John Harvard’s bequest
- Fund raising tools of the College of New Jersey (Princeton), 1740-1800
- The British are gone! So now what is our law of charity?
The Roman Catholic Church: Medieval and Renaissance Traditions of Philanthropy
Classical traditions of charitable gift planning were adopted and re-purposed by the medieval and Renaissance Christian Church with a new order: to be saved, help the poor. So much land was given to the Church in England through charitable trusts and bequests that a series of legal restrictions were imposed by the King and/or Parliament, and new ways around the laws were found. An early form of charitable gift annuity known as a corrody became popular. The Protestant Reformation led to a shift in social responsibilities from the Church to the State, and to the expression of modern philanthropic ideas and methods in the great reform act known as the Statute of Charitable Uses (1601).This statute became the basis of the American law of charity. Topics:
- The conversion of Roman Emperor Constantine to Christianity, and the Edict of Milan
- Christian charity: “lover of the poor”
- Jerome, Valentinian, and Roman public policy for gift planning
- Rule of St. Benedict, family philanthropy, and life income gifts in 600 A.D.
- A long academic debate: where and when did “trusts” originate?
- Charitable corrodies: an early form of gift annuities
- British scholarship on charitable bequests
- Public policy frameworks for charitable trusts (“uses”)
- Protestant Church Reforms and the Elizabethan Statute of Charitable Uses
The Classical Tradition: Jerusalem, Athens, Rome
Modern ideas and methods of gift planning (for example: charitable trusts, annuities, foundations, endowments, and bequests) were shaped by laws and customs of the Hebrews, Greeks, Arabs, and other ancient cultures. These gift planning traditions were re-ordered and codified by the Romans. In the 3rd century A.D., the application of science to life annuities appeared, when the lawyer Domitius Ulpianus reported the creation of a new table for calculating the present value of life annuities. Topics:
- Introduction to Hebrew and Greek values and traditions of charity: why do people give?
- Roman charity: “lover of his city”
- Roman vocabulary and tools for philanthropic planning
- Social customs of Roman wills
- Ancient and Roman annuities
- Ulpian (Domitius Ulpianus) and the first experience-based table for valuing life annuity payments, born from the practical need to implement a new tax law
- Early development of charitable trusts and trust-like devices
- Annuities and trusts: compare and contrast