We have developed a comprehensive package of gift annuity risk management services and modeling tools as
well as a proprietary business process designed for pools of $10 million or more - Life Income Risk
Management Analytic Suite (LIRMAS).
Risk Management Services
- Start-Up Program Risk Management Plans
- Risk Audit of Existing or New Programs
- Asset/Liability Matching Optimization Strategies
- Reinsurance Optimization Strategies
- Large Concentrated CGA Recommendations
- "Underwater" CGA Recommendations
- CGA Cash Flow and Financial Modeling
- Investment and Longevity Assumption Sensitivity Testing
- Internal Communications to Financial Staff and Volunteers
- Technical Assistance on Gift Design (Assist Donor's Advisors, Prepare Proposal, etc.)
- Technical Assistance on Specific Asset Contributions (Real Estate, Closely-Held Stock, etc.)
- Customized and Specific Policy Recommendations
Our CGA Services Answer the Following Questions
- What are the demographics of our annuity pool?
- What is the probability of exhaustion for each of the annuities?
- What are the projected cash flows and balances given various investment and longevity assumptions?
- Where are our major potential problems?
- Analyze and quantify internal mortality and investment risk of self-insuring contracts
- How can we develop policies and procedures to mitigate risks and maximize investment returns?
- How do we determine when and where to use reinsurance?
Life Income Risk Management Analytics Suite
Our principals recently invented the Life Income Risk Management Analytic Suite. Our proprietary CGA risk
management models/algorithms/formulas determine the overall pool’s health; exhaustion probabilities using
sensitivity analysis; optimal asset allocations given the characteristics of the annuitants; risk
retention/reduction/transfer thresholds and policy implications; and optimal strategies for “underwater” annuities.
This analysis is beneficial for any CGA pool; however, it is specifically designed for pools greater than $10 million.
This tool uses a proprietary gift annuitant life expectancy table to more precisely measure CGA liabilities. The 15-
step business process employs a series of formulas to analyze 10 dimensions of risk and then offers
customized policy recommendations to optimize ending balances while minimizing risks. The report is
specifically designed to be developed collaboratively with the charity’s gift annuity investment manager.
Final Report and Pricing
The customized report generally includes 20-40 pages of information and 15-20 graphical pages (approximately
30 different charts).
This service typically ranges from $2,000-20,000 depending on the number of annuitants and complexity of the
analysis.
| "Charitable Solutions analysis of our gift annuity pool gave us peace of mind and helped fine-tune our approach. The CS method uses hard data, sound quantitative concepts, and has no preconceived notions of how a gift annuity pool should be invested and risk managed. It is a client centered approach." David W. Brown, Ph.D., CFP Director of Planned Giving Georgia State University |
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