May - December
CGA: The term May - December marriage often refers to a couple
where there is an older and younger spouse, say 10 to 15 years younger.
Therefore, it is important to listen to your prospect's needs and
tailor your gift strategy to their wants and wishes? I have found
many individuals do not respond to the major motivations provided
by gift annuities, i.e., to increase their income or decrease their
taxes. So you need to practice market segmentation with you gift
annuity program! With market segmentation you may have discovered
there is a new market for the flexible deferred CGA for an older
individual with younger spouse.
This market segment is concerned about preservation of
income for the survivor spouse. They are a couple who does not need
the modest income from assets to maintain current lifestyle. They
would like the asset to grow for the benefit of surviving spouse.
While they can benefit immediately from the income tax deduction
it is not a primary motivator. Another advantage is they can diversify
their assets with little or no current capital gains tax liability.
Additionally they may have an asset producing small dividend payments,
which they will not miss.
With a May - December CGA or you may also refer to it as
a “Partnership Annuity” you donors always have the option
of turning the annuity payments on if needed for health or financial
The surviving spouse (assuming a younger individual) has
the option of turning on the annuity payments or making an outright
gift of the CGA agreement and then you get the current asset for
an immediate memorial for deceased spouse.
Think about those on your top 50 prospect list. Do any
of them fit this profile? If so you have some new gift options to
present to them. Let me know of your successes.