Creating a Strategy for Creating a Strategy for Planned GivingPlanned Giving

Kathryn W. MireeKathryn W. Miree & Associates, Inc.

The Role of Gift Planning The Role of Gift Planning In Your Development In Your Development

ProgramProgram

Gift planning that considers◦Donor’s personal goals◦Donor’s charitable goals◦Most effective gifts

Effective planning enhances all gifts◦Expands opportunities for major gifts

No longer narrow definition◦Not deferred alone◦Involves donors, advisor, and charity

What Is Planned Giving?What Is Planned Giving?

Gift planning is the rising star of fundraising in this market.

Gift planning involves:◦The donor◦The donor’s advisor◦The charity◦Working together to create the most effective

gift for the donor and the charity.

The Value of Gift Planning for The Value of Gift Planning for Major and Planned GiftsMajor and Planned Gifts

Revisiting the PyramidRevisiting the Pyramid

ANNUAL GIVING

MAJOR GIVING

PLANNED GIVING

DonorCommitment

Gift OfficerInvolvement

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The Benefits of Planned The Benefits of Planned GivingGiving It opens the door to the wealth transfer

◦ The IRS Statistics of Income Bulletin - data from 2008 tax year

◦ Boston College Social Welfare Institute

IRS Statistics of Income IRS Statistics of Income BulletinBulletinState Number of

ReturnsNumber of Itemizers

Number of Charitable Deductions

Dollar Value of Charitable Deductions

Indiana 3,019,320 853,43728.6% of all

who filed)

667,684 (77% of all

who itemized)

$2.732 Billion

U.S. 139,230,752 49,597,995 (35.62% of

all filers)

41,366,929 (83.4% of all

who itemized)

$182.14 Billion

Boston College Social Boston College Social Welfare InstituteWelfare Institute

Boston College Social Welfare Institute measured the transfer of wealth expected from generation to generation between 1998 and 2052.

Assuming 2% growth - $41 trillion Assuming 4% growth - $136 trillion Between $6 trillion - $25 trillion to charity Updated in 2003 - stood by numbers

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The Opportunity GapThe Opportunity Gap Independent Sector: 89% of all households

give to charity Independent Sector: 44% of all adults

volunteer

NCPG: 8% have made a gift to charity under will

The gap is the opportunity!

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Why Planned Giving? It Why Planned Giving? It Connects You with GiversConnects You with Givers

Source Amount in BillionsPercentage of

Total

Individuals $227.41 75%

Foundations $38.44 13%

Bequests $23.8 8%

Corporations $14.10 4%

Total $303.75 100%

Charitable Giving Potential:Giving USA 2010

Individuals

$227.41

Corporations

$14.10Foundations$38.44

Bequests

$23.8

Total: $303.75 Billion

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Why Planned Giving? It Why Planned Giving? It Connects You with GiversConnects You with Givers

Sector Amount in BillionsPercentage of

Total

Religion $100.95 33%

Education $40.01 13%

Human Services $27.08 9%

Public Society/Benefit

$22.77 8%

Health $22.46 7%

Arts, Culture and Humanities

$12.34 4%

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Why Planned Giving?Why Planned Giving? It creates donor visions for the community It creates resources for the future It focuses you on donor relationships It allows you to engage with donors

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Making the Case for Making the Case for Planned GivingPlanned Giving

There are two cases for planned giving:◦ The internal case - focused on the board and staff -

those internal to the organization that must provide the support

◦ The external case - the case to donors - the statement in which they will be moved to contribute long-term funds

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The Internal CaseThe Internal Case This case focuses on WHY you need a

planned giving program◦ Community charitable needs are increasing and

you need additional permanent funds to meet those needs

◦ Community giving is decreasing and the foundation needs to stimulate more giving

◦ The foundations needs resources for community disasters

◦ The foundation needs to be positioned to capture the transfer of wealth

◦ The foundation needs resources to serve a leadership role in the community

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The External CaseThe External Case The community foundation is the strongest

platform for perpetual gifts - cy pres power The community foundation’s board is

comprised of community leaders who know the needs of the community

You can support your favorite fields of interest - more flexible

You can give to multiple organizations through the foundation

You can - and should - make a difference in the community’s future

Are You Ready for Are You Ready for Planned Giving?Planned Giving?

A review of your current planned giving activities and their effectiveness

A review of your infrastructure such as gift acceptance policies, donor data policies endowment structure and policies, staffing budget, reporting, board involvement board committees

A review of your messaging such as marketing materials, donors stewardship, etc.

Recommendations for change

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A Checklist of Essentials

1. A strategic plan2. A visible organization3. Staff to talk with donors4. Standard fund documents5. Clear instructions on how to name the

foundation in gift documents6. An effective donor database to manage

donor relationships7. A legacy society to recognize donors

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A Checklist of Essentials

8. Basic marketing materials9. Key policies governing gifts and gift

management : 1) gift acceptance, 2) investment management, 3) stewardship, and 4) donor data

10. Available counsel when you need help11. Annual reports and measures12. Strong relationships with professional

advisors: 1) database, 2) one pager, 3)sample language 4) council

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Gathering the Data A fundraising history An organizational history Giving patterns:

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

# Corp Donors

# Indiv. Donors

# Fdns or Other

Total Donors

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Gathering the Data2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

# DAFs

# add

Total $$

# Desig.

# add.

Total $$

# FOI

# add.

Total $$

# Unrest.

# add.

Total $$

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Donor Potential Who’s in charge of your donor data? Can you use the data? Is the information extensive enough to help

distinguish one donor from another?◦ Long-term giving history◦ Gift commitment records◦ Call data◦ Marketing response information◦ Ages◦ Family connections◦ Personal and programmatic interests◦ Event attendance

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What to Measure The number of donors in the database by

type◦ Corporate◦ Foundation◦ Individual

The number of active donors The number of repeat donors Segments by age sex, connections location,

and other characteristics

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Grant Patterns The number of grants committed to each

sector - by type of fund (unrestricted, FOI, DD, DAF)

The dollars committed to each charitable sector - by type of fund (unrestricted, FOI, DD, DAF)

The number and amount of unfunded grant requests each year (and sectors)

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Key Community Needs Position the foundation as the “go to” in the

community Do the research - look for a university

partner (use a grant to fund it) Also - great way to connect with the

charitable community and know it better

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Evaluate the Board They hold the reins, make the decisions,

have the fiduciary responsibility Critical Board Skills

◦ Leadership◦ Financial skills◦ Fundraising experience◦ Grant analysis◦ Organizational skills◦ Staff/program evaluation skills◦ Political/social connections◦ Program administration experience◦ Prior experience nonprofit boards◦ Planned giving donors

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Review the Current Board’s Strengths and Weaknesses What skill sets do you have on the board? What are the critical skills you need to move

forward? Development several names for each of the

skill sets you need Then, select the individual that best fits, has

the broadest giving experience, and the time to participate

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The Staff Evaluation You don’t just need bodies - you need the

right bodies Job description

◦ Title◦ Supervisor, subordinates◦ Education◦ Experience◦ Licenses, certifications◦ Technical Skills◦ Personal qualities◦ Duties and responsibilities

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The Staff Evaluation NCPG’s study of planned giving officers

Time spent on PG Percentage Responding

0% 1.7%

1-24% 39%

24 - 49% 15.6%

50 - 74% 11.8%

75 - 99% 14.8%

100% 17%

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The Staff Evaluation Goals

◦ Calls◦ Gift proposals◦ Completed gifts

Annual Evaluation

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Marketing Messages - How Do You Position the Foundation? A community foundation is a difficult

concept Only a fraction of the community knows

who you are and what you do Even your board would be hard pressed to

explain a community foundation in an elevator speech

What are your five key messages you convey now?

Gather your marketing materials

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Marketing Messages Organization and community needs

◦ Clear call for support◦ Financial and program information - current and

future community needs◦ Current strategic plan

Use and impact of funds◦ Basic financial information◦ Detail on fundraising revenue◦ Detail and long-term holdings◦ Investment performance◦ How funds are spent

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Marketing Messages Recognition of Donors

◦ Who do you recognize - and how?◦ How do you encourage giving through

recognition?◦ How do you recognize planned giving donors◦ How do you recognize volunteers?

Ease of Giving◦ Clear communication that gifts at all levels are

welcome◦ How to give◦ Encouragement to call◦ Information for professional advisors

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Using the Audit Information to Build the Program Make an implementation plan that includes:

◦ Each step◦ Person responsible◦ $$ required◦ Volunteers required◦ Timeline

Action/Step

Person Responsible

$$ Required

Volunteers Required

Timeline

The Tools of the TradeThe Tools of the Trade

Age Goals

25-40 Generate income

40-55 Build assets

55-65 Position for retirement

65-on Generate income!

Outright Gifts Gifts that Pay Income Deferred Gifts

Publicly Traded Securities◦ Valued at average of

high and low on date of gift Mail - Date of postmark Special carrier - Date of

dispatch DTC - Date of Delivery

◦ Nonprofits need disposition policies

100 Shares Merck on Monday, holiday

Preceding Friday:High/Low $21/$19Mean $20

Following Tuesday:High/Low $22/$20Mean $21

Average $20.5Gift Value: $2,050

Publicly Traded Securities

Mutual Funds◦ Valuation: Net asset

value at end of day of gift

◦ Transfer difficult◦ Issues on receipt by

nonprofit Sell? Hold? How?

What are they? Valuation issues Practical issues

Partnership Interests

Valuation and Substantiation Congressional Issues Transfer Special Donor Issues

◦ Does the item have a related use? Personal property to CRT not deductible if donor/donor’s family receive income

Donor contributed $100,000 painting to local museum to satisfy $100,000 campaign pledge

Painting had basis of $10,000 Transferred, sold for $105,000 What was donor’s deduction?

Special Nonprofit Issues ◦ Does the property fulfill the mission of the

organization?◦ Is the property marketable? Under what

conditions?◦ Are there any undue restrictions on use?◦ Are there any carrying costs?

Why is real estate a good gift?

Valuation & Substantiation

Other Issues◦ Environmental Liability◦ Mortgages◦ Restrictions◦ Type of charitable gift

Types◦ EE Patriot Bonds (can no longer rolled over tax

free after August 31, 2004)◦ Series HH◦ Series I

Remainder interest only in home or farm (no other types of property)

Generates current income tax deduction for remainder interest

Invokes the issues with real estate Must run the numbers- see page 46

Split interest gifts are those that split the income and principal benefits of a gift among charitable and non-charitable beneficiaries

Charity Mom & Dad Normal

Irrevocable TrustSpecified distribution, at

least annually to non-charitable beneficiary(s)

Measures distribution as sum certain (annuity), or fixed percentage (unitrust)

Continues for a time measured by years or lives

Pays remainder to charitable beneficiary

Has 10% + remainder

Charitable Remainder Annuity Trust◦ Income interest

expressed as a specific sum, usually as a% of initial market value

◦ Income interest can be no less than 5%, no more than 50%

◦ No additions to trust once executed

$100,000 Trustwith a

6% Annuity Amount= Annual Distribution of $6,000 for Life of

Trust

Charitable Remainder Unitrust◦ Income interest

expressed as % of annual market value

◦ Must be at least 5% and no more than 50%

◦ Additions may be made if document allows

$100,000 Unitrustwith a

6% Unitrust Amount= $6,000 in Year One.

If Unitrust value is $120,000 in Year Two,

the Unitrust Payout is $7,200

Charitable Remainder Trusts Alteratives - The Unitrust

Straight Unitrust◦ Fixed percentage

each year, regardless of income generated by trust

Net Income Unitrust◦ Fixed percentage, or

net income generated by trust, whichever is less

Net Income With Makeup Unitrust

◦ Fixed percentage, or net income generated by trust, whichever is less; however, in years in which excess income is generated, can make up

Flip Trust◦ Begins as NI, and “flips” to

standard

5% Charitable Remainder Annuity Trust

5% Charitable Remainder Unitrust

Charitable Deduction

$48,306 $55,543.00

Income Stream over Lives

$70,000 $74,737

Benefit to Charity at end of Term

$121,015 $114,947

CRT, $100,000, Age 72, September 2010

CRTs are long on rules and short on logic. There is no reward for creativity.

Charitable beneficiaries: Most 501(c)(3)’s qualify - but check. Income tax list and estate/gift tax lists vary slightly

Income amounts must be prorated in short years

Always on calendar year

The irrevocable (outright) transfer of property to charitable organization at the same time that an annuity agreement is executed

Charity promises to pay donor (or beneficiary named by the donor) a specific sum for life

The amount is fixed and guaranteed by the charity’s assets

Remainder must be worth at least 10% at the time of the gift

There can be no more than two annuitants The capital gain in the gifted property

becomes a ratio of the payment stream Once the donor lives to life expectancy, all

remaining payments are ordinary income

Simple to understand - part gift and part annuity contract

Charity can provide document - no separate trust

Charity can accommodate smaller amounts

Charity can set lower rates if preferred

Tax benefits to donor - deduction in year made

Can count on income Income stream for life

expectancy is part income/part return of principal (part of which may be gain)

Can execute several annuities to create income stream

ACGA◦ Meets periodically to

recommend rates computed by actuaries

◦ Rates based on assumption that 50% goes to charity

◦ Life expectancies based on Annuity 2000 tables

◦ Assumes 6.75% rate of return

◦ Assumes .75% cost

Donor’s Age Annuity Rate 7/1/2010

50 4.8%

60 5.2%

70 5.8%

80 7.2%

90+ 9.5%

Charitable Deduction $11,096

Ordinary Income 422.10

Capital Gain Income $801.86

Tax-free Portion $451.04

Donor Age 77, $25,000 with Basis of $9,000

Straight - donor is sole annuitant

Joint & Survivor CGA as gift - donor gives

to someone else (beware tax consequence - gain hits donor)

Deferred Gift Annuity - payment stream deferred to later date

Stepped Gift Annuities - Payment stream that increases over life - combination of several annuities in practice

Gift Annuity Under Will - for benefit of family member, etc.

Age Annuity Rate

Annuity Payment

Deduction

60 5.2% $520 $1,978.90

70 5.8% $580 $3,503.30

80 7.2% $720 $4,842.50

90 9.5% $950 $6,142.00

Sampling of Deductions at Various Ages 9/2010

A trust qualified as a separately maintained pooled fund

Which receives irrevocable transfers from donors

Which distributes income from units for the lifetime of the designated beneficiaries

Which liquidates units designated for the beneficiary at death and distributes to the charity

Who? Almost all public charities. Why? PIFs

◦ can be used for smaller donations◦ do not put charity at payout risk◦ can be used for donors who want to retain all the

income◦ fund can be managed efficiently

How?◦ Charity establishes fund◦ Donors contribute without need for separate

document

◦ Assume donor contributes property with a value of $100,000

◦ Value of fund on contribution is $750,00

◦ The donor’s contribution is equal to two units

◦ Beneficiary receives income from two units

No tax exempt bonds can be contributed or a part of the fund

Capital gain property can be contributed - gain is only triggered when property is transferred subject to indebtedness

Closely held stock can be contributed - no prior agreement

Care should be exercised on type of asset accepted because income is impacted.

Funds must be marketed and explained well

Donor receives ordinary income - short term gain is sometimes classified as income

Pooled Income Funds: The Rules

Benefits to the donor◦ Allows the donor to

plan the disposition of estate and to assign priorities to meet goals

◦ Allows donor to make a larger gift than with an outright gift

◦ Allows the donor to “invest” in the future of the nonprofit

Benefits to the nonprofit

◦ Simple◦ Easy ask◦ Builds commitment◦ Builds future income

stream

Beneficiary designation differs from gift of policy because decedent owns policy, and it’s in his estate. However, full amount passing to charity is deductible.

Life insurance policies have often extended beyond the need for which they were purchased. They’re easy to give up.

The “ask” is easy. Donors may not have considered this alternative.

Retirement accounts include pension plans, profit sharing plans, stock bonus plans, Keogh Plans, 401(k) plans and IRAs.

These assets have income tax consequences at death of owner in addition to estate tax consequences

Many individuals now have substantial assets in these plans

These plans are not disposed of through will (generally)

Pay on death/transfer on death on checking and savings

Designation made on account If charity named as beneficiary, assets

transfer at death Downside? Impossible to guess

Identifying the Perfect Identifying the Perfect ProspectsProspects

Chasing the individuals with high net worth

Focusing all of your attention on donors who have made the “big gifts” to your charity

Assuming donors who make small gifts are not capable of making larger or estate gifts

Avoiding the PitfallsAvoiding the Pitfalls

2006 Study Focused on philanthropic profile, motivations

and goals of high net worth individuals (income >$200,000, assets >$1 million)

3.1% of all U. S. households 98% of group made gift to charity in 2005

Bank of America High Net Bank of America High Net Worth Philanthropy StudyWorth Philanthropy Study

Important Motivations Important Motivations for Givingfor Giving

Motivation % of Respondents Citing

Meet critical needs 86.3%

Giving back to society 82.6%

Reciprocity 81.5%

Bring about a desired impact 68.5%

Nonprofits should do what government cannot do

64.4%

Factors That Would Prompt Factors That Would Prompt Additional GiftsAdditional Gifts

Factor % of Respondents Citing

Spent less money on administration 74.8%

Donor can determine impact of gift 58.3%

Donor felt more financial secure 52.0%

Donor received better return on investments

46.6%

Donor not already financially committed

40.2%

Type of Gift Vehicles Type of Gift Vehicles UsedUsed

Type of Gift % Who Have Created

Capital campaign 64.6%

Bequest 41.2%

Stocks/mutual funds 31.8%

Created foundation 19.5%

Created donor advised fund

15.9%

Three top reasons donors stopped giving:◦“No longer feel connected”◦Wanted to support other causes◦Solicited too often

Sources of advice:◦2006: Peers and nonprofits◦2008: Professional advisors

2008 High Net Worth 2008 High Net Worth Philanthropy UpdatePhilanthropy Update

Setting an example for children is an important motivation in giving.

Parents are the leading source of philanthropic education.

Donors expect transparency, accountability, and protection of privacy from the charities they support.

2008 High Net Worth 2008 High Net Worth Philanthropy UpdatePhilanthropy Update

Boston College Social Welfare Institute Intergenerational transfer of wealth from

1998 – 2052 $41 - $136 trillion in transfer of assets $6 - $25 trillion in gifts to charity Interest observations on giving attitudes and

habits of wealthy

Great Potential for Asset Great Potential for Asset GiftsGifts

Report in March 2007 Combined high net worth with surveys in

Indiana, St. Louis, Memphis Goal to identify potential bequest donors,

and donor motivation 48.4% had a will

◦FindLaw 44.4% (2002)◦NCPG 42% (2000)

Center on Philanthropy at IU Center on Philanthropy at IU Bequest StudyBequest Study

Age Bequest Study HNW Philanthropy Study

30-40 8.9% 1.4%

40-50 28.1% 9.4%

50-60 21.9% 19.3%

60-70 20.6% 27.5%

70-80 11.0% 25.1%

80+ 8.9% 17.3%

Age Demographics for Age Demographics for Those With Bequest in PlaceThose With Bequest in Place

Age Demographics for Age Demographics for Those Willing to Consider Those Willing to Consider a Bequesta Bequest

Age Bequest Study % of Sample

30-40 18% 18.2%

40-50 28% 28.8%

50-60 24% 18.3%

60-70 5% 10.9%

70-80 3% 7.8%

80+ 1% 3.7%

Bequest Intention Bequest Intention PotentialPotential

>$25,000 $25,000 to$49,999

$50,000 to

$74,999

$75,000 to

$99,999

$100,000+

Bequest currently in

place

6.6% 7% 7.6% 6.5% 10%

Would consider putting a

bequest in place

28.4% 34.6% 28.8% 25.99% 35.63%

Donors have more than 1.5 million choices (including those with tax-exempt status and an additional 300,000 churches and religious organizations).

Donors give where they are the most connected and have the greatest interest – often that interest is kindled by participation or similar involvement.

Look for Points of ContactLook for Points of Contact

Identifying connected donors:◦Members of the board◦Former members of the board◦Staff and former staff◦Donors with DAFs◦Other donors◦ Individuals with passions about specific

charitable interests

Look for Points of ContactLook for Points of Contact

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The Top 100 (50) Potential The Top 100 (50) Potential Planned Gift DonorsPlanned Gift Donors

Prospects Current Board Member

Past Board Member

Multiple Gifts

Multiple Funds

Attends Events

Comm. Leader/Active in Giving

Current or Former Staff

Total

Ann Adams

Bob Brown

Calvin Cox

David Dugan

Ellen Engels

Having the Having the ConversationConversation

Biggest obstacle in talking to donors about planned gifts is getting the conversation started

You don’t want to say:◦“Are you prepared……”◦“Do you have your affairs in order?”◦“Do you know you’re going to die?”◦“Leave us in your will when you die.”

Research Before You GoResearch Before You Go

Giving history Capital campaign donor Planned gift commitment Volunteer relationships Family history with your charity Specific interests or personal goals Information from public sources Prospect’s philanthropic history

Research Before You GoResearch Before You Go

It’s hard to remember everything. Use a worksheet. The goal on the call is to learn more about

the donor and the donor’s connection to and passion for xyz charity – not to tell them about your charity’s needs.

Use a WorksheetUse a Worksheet

How did you first get involved with xyz charity? (assume nothing)

When and why did you make your first gift to xyz charity?

What is your area of greatest interest at xyz charity?

The Magic QuestionsThe Magic Questions

How did you first get involved with your charity?

When and why did you make your first gift to your charity?

What is your area of greatest interest in the community?

What are the community’s greatest challenges over the next five to ten years?

Would you like to know more about how you can address those challenges?

The Magic QuestionsThe Magic Questions

Ask the magic questions Identify the donor’s interests Thank the donor for the commitment to the community

Identifying Interests and Identifying Interests and ObjectivesObjectives

Listening For Listening For OpportunitiesOpportunities

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The Current Environment for Donors The current environment is tough for donors Consider the last decade

Investment Results Matter:Investment Results Matter:1999-2007 Major Markets1999-2007 Major Markets

DJIA S & P 500 NASDAQ

1999 25.22% 19.53% 85.50%

2000 -6.18% -10.14% -29.29%

2001 -7.10% -13.09% -21.05%

2002 -16.76% -23.37% -31.53%

2003 25.32% 26.38% 50.01%

2004 3.15% 8.99% 8.59%

2005 -.61% 3.0% 1.37%

2006 16.29% 13.62% 9.52%

2007 6.4% 3.5% 9.8%

2008 -33.8% -38.5% -40.5%

2009 18.8% 23.5% 43.9%

Snapshots of Market Snapshots of Market Movement (DJIA)Movement (DJIA)

Date Dow Level

DJIA Return from 12/31/89 to 12/31/89 317.59%

DJIA Return from 12/31/99 to 12/31/09 -9.3%

DJIA Return from 12/31/00 to 9/3/10 -3.15%

Historical Prime Rate, Historical Prime Rate, QuarterlyQuarterly

March June September December

1998 8.5 8.5 8.5 7.75

1999 7.75 7.75 8.25 8.5

2000 8.75 9.5 9.5 9.5

2001 8.5 7 6.5 5

2002 4.75 4.75 4.75 4.25

2003 4.25 4.25 4 4

2004 4 4 4.5 5

2005 5.5 6 6.5 7

2006 7.5 8 8.25 8.25

2007 8.25 8.25 8.25 7.5

2008 6 5 5 4

2009 3.25 3.25 3.25 3.25

2010 3.25% 3.25% 3.25%

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The Madoff ChillThe Madoff Chill Numerous reports of investment manager

misfeasance and malfeasance have affected both charities and individuals.

Madoff ran off with $50 billion Statements were manufactured Sophisticated people were caught in the web

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Retirement NeedsRetirement Needs An increasing number of people are retiring -

making them dependent on their current assets.◦ Millions ready for retirement◦ Uncertain about the future

Millions are unemployed

We’re about to experience a wave of retirements – those in retirement are especially hard hit.

Donors do not know what’s next – and are holding onto cash.

The country is officially in (or out?) of recession – unemployment, business losses, and real estate markets are creating a negative impact.

The federal debt is at an historical high.

What This Means to DonorsWhat This Means to Donors

Planning enhances all gifts. Concepts can be simple, such as using

appreciated stock. Or, gift options can be complex such as

funding a charitable remainder trust with closely held stock.

Gift Planning Leverages All Gift Planning Leverages All GiftsGifts

My CD income has been cut dramatically….I’d like to make a gift but don’t have the resources.

I’ve got three children in college. I can’t afford a gift right now.

I’m holding cash waiting to get back into the investment market.

Leave behind: ◦Making a gift with non-cash assets.◦Making a gift with writing a check.

The Donor is Tight on CashThe Donor is Tight on Cash

I don’t itemize my deductions, so I can’t deduct the gift.

I have stock I’ve owned for over 30 years – it’s doubled many times.

I have highly appreciated stock - I hate to pay the capital gains.

Leave behind:◦Using publicly traded stock to make a gift◦Using your home to make a gift

The Benefits of Gifts of The Benefits of Gifts of Appreciated AssetsAppreciated Assets

I’d like to make a gift but…. I’m worried about taking care of my parents I’ve got to put children through college.Our assets were eroded in the stock market –

I’m worried about retirement. What to leave behind:

◦ Create a gift that pays income.

I’d Like to Make a Gift, But I’d Like to Make a Gift, But Need IncomeNeed Income

I would love to create an endowment to honor my sister but I might need the assets in retirement.

I’m worried about taking care of my parents in the event something happened to me.

My parents are the current beneficiaries of my insurance policies.

What to leave behind:◦Impact the next generation through your will.

Making a Future GiftMaking a Future Gift

I wrote my will when the kids were born. Our company attorney drafted a will for me

several years ago – he told me to keep things simple.

I asked my real estate attorney about a will. He said it was complicated and couldn’t help. I don’t really have a good attorney.

I don’t need an estate plan – we own everything jointly.

The Donor Needs to The Donor Needs to Engage in PlanningEngage in Planning

I understand it costs a lot to get a will. I’ll go on line and see if I can find a simple form when I have a chance.

What to leave behind:◦Emphasize planning is an ongoing process:

Change in assets Change in income level Change in work status Change in family status

The Donor Needs to Engage in The Donor Needs to Engage in PlanningPlanning

My retirement plan will pass to my children. My largest asset is my retirement plan – of

course, that passes to my wife at death. It doesn’t look like I’ll pay any estate taxes at

death. I’ll leave something for xyz charity, but my family comes first.

What to leave behind:◦How to use your retirement plan to make a gift.

A Gift of Retirement A Gift of Retirement AssetsAssets

Identify and nurture the donor’s vision – but “today” may not be the right time to execute the plan.

Look for opportunities such as:◦Selling a business◦Reducing concentrations in a stock portfolio◦Selling a home◦Retiring and converting assets◦Receiving an inheritance

Other Opportunities: Major Other Opportunities: Major Financial EventsFinancial Events

The economy is so uncertain right now – I’m not making any decisions or distributions until things stabilize.

Response:◦This is an extremely difficult time for many

families at all income levels – we’ve seen a significant increase in the demand for services. Your gift could not have any greater impact than this year when the need is so great.

Push Back From the Push Back From the EconomyEconomy

I’m worried about having enough income in retirement.

Response:◦Have you considered making your gift by

creating a charitable gift annuity? I’d be happy to run an illustration of the benefits for you.

Push Back From the Push Back From the EconomyEconomy

I’m worried about my parents – I can’t really make any major financial distributions until I’m sure they are alright.

Response:◦It is great that life expectancy is increasing,

but it does mean our parents may outlive their resources.

◦Rather than reverse estate planning, consider a charitable gift annuity for their benefit.

Push Back From the Push Back From the EconomyEconomy

My children are my primary beneficiaries – we’ve left everything to them.

Your responses:◦Most individuals prioritize family in their will and

have specific goals for family. ◦Some individuals leave a percentage of their

estates to charity. For example, 5%, with three children, reduces each child’s share by only 1.66%.

Deferred Gift Push BackDeferred Gift Push Back

You’ve asked the donor to consider an estate gift and they say they don’t think they can.

Your responses:◦Many members of our Legacy Society have

made commitments similar to yours.◦ I would be happy to arrange a time for ____ to

talk with you (and your advisor).

Deferred Gift PushbackDeferred Gift Pushback

I’ve included my church and (favorite charity) under my will, but I didn’t know you needed a bequest

Responses:◦I’m glad I raised the question. You have been

such an important donor to us and have already impacted many, many lives.

◦A gift through your estate will fund future programs and projects that will improve lives.

Deferred Gift Push BackDeferred Gift Push Back

Steps Following the Steps Following the CallCall

Before you leave the visit, think about next steps:◦If the donor has expressed an interest in a

specific project, send more information.◦ If have discussed trends or outcomes – offer to

do research.◦The donor may have asked about a favorite

professor – check and back with contact info or an update.

◦The donor may have indicated now was not a good time, but maybe later. Set a tickler.

Look AheadLook Ahead

Before you leave the visit, think about next steps:◦You may have discussed estate planning and

offered to send the donor some worksheets or tools.

◦The donor may have asked that you provide him with two or three names of recommended attorneys. Be sure to follow up.

Before You Leave the Call, Before You Leave the Call, Look AheadLook Ahead

Record the details of the visit in the donor data system.

If you planted an idea for a deferred or other planned gift, note that as well.

Identify a reason to follow up, and make that note. (Then, follow through!)

After the VisitAfter the Visit

Track results to evaluate effectiveness:◦The number of calls on which you had an

opportunity to introduce a planned gift idea The number of follow-up donor contacts

◦The number of planned gift commitments that resulted from your suggestion

◦The consistency and size of the donor’s major gift in the years following the planned gift commitment

Keep Track of the ResultsKeep Track of the Results

Was the prospect qualified? Has the prospect been well stewarded? Was your call the donor’s first visit? Was the donor expecting your visit? (Did you do

a good job of setting up the call?) Did you learn anything new on the call?

Evaluating the Evaluating the Effectiveness of the CallEffectiveness of the Call

Long-term commitments have short-term benefits to your foundation.

The key is building a relationship with a long-term donor and asking him/her to consider a planned gift.

The donor conversation allows you better insight and understanding of the donor’s giving goals and philosophy.

Final ThoughtsFinal Thoughts

Your role is more personal than technical. Ask the questions, learn the priorities, raise the issues, and bring in the experts.

If you don’t know the answer, say so. Then, get back with the information.

Work as a team with others in your organization. You’ll build stronger connections and have greater strength.

Final ThoughtsFinal Thoughts

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What’s Next?

Final Thoughts