Implementing a Basic Planned Giving Program€¦ · Web viewGifts of Life Insurance Policy-owners can direct that the proceeds be given to a charitable institution as a deferred planned

Planned Giving Program BasicsDesigned for Oregon Community Foundation Endowment Partners

This outline provides a basic set of tools that will help your organization begin a planned giving program. Remember, there are many resources available about Planned Giving and we advise you to research your own ideas, materials, and marketing and website ideas, attend seminars and then tailor a program that best fits your organization. Once you have decided to implement a planned giving program and are committed to developing a plan you should, at the very least, consider the following key elements.

1. Do you have a Case Statement that clearly articulates your mission , the main functions of your organization, the purpose and goal for your planned giving program and one that identifies ways large and small gifts could impact your organization? You do not have to be engaged in a Planned Giving Campaign for this to be important

2. Is your Board and staff educated about planned giving basics , tools, gift types, partners and the importance of planned giving for your organization?

3. Does your organization have the appropriate infrastructure to manage a planned giving program? This should be tailored for each organization.

a. Professional advisor or team / development plan and committees

b. Endowment investment partner or managerc. Donor and gift tracking data base d. Staff to support the efforte. Funding for training - seminars, workshops or classes sponsored

by other institutions to learn more about planned giving

4. Is planned giving included in the organization’s overall development plan, and is the development plan part of your organizational strategic plan? And does that plan include:

a. Board Committee – what is the make-up and job descriptionb. Annual activities plan – assignments with datesc. Completed gift acceptance policies, investment policies,

distribution policies

5. Do you have a prospect development, solicitation and follow through plan and is it part of your annual activities plan?

6. Tool box for staff and volunteers:

OCF Planned Giving Basics Page 1

a. Informational materials for prospective donors – think dual purpose.

b. Marketing planned giving opportunities through your newsletter.c. Include on/or create a web page for planned giving opportunitiesd. Promote the concept of planned giving by using brochures,

bookmarks advertisements, articles, stories and programs. e. Direct Mail f. Eventsg. Personal solicitation tools

Your organization’s planning for an effective Planned Giving Program is vital. Planned gifts can come in many forms; all require effort on the part of the organization to let donors know there are options for planned gifts. Perhaps the donor only needs to know how to phrase bequest language in their will or how to designate the organization as the beneficiary in their IRA. Your organization needs to be ready, and ready to fulfill consistent effort. Planned gifts are based on your organization’s relationship with donors and often take years to reach fruition.

The Case - Focus on your Case! Know it and be able to articulate it!

Starting with your planned giving committee or its equivalent, draft a case statement for your organizations planned giving effort. The case should concisely explain why your organization needs and deserves planned gifts, how much it is looking for, and how it plans to use the gifts once received. Do not skip this process. It is fundamental to building an effective program and getting board and volunteer participation. (And their planned gifts)

Be aware that as soon as your supervisor, board members, or planned giving volunteers see the draft of the case statement they will think, “brochure.” Help then understand that the case statement, while helpful in developing a brochure for general distribution, is above all a fund-raising tool to get planned gift commitments.

Your staff or a key committee, if you are a smaller organization, should draft the initial case statement. Once the Case draft is complete, refine the case by presenting it to appropriate volunteer committees, planned giving, finance, development, etc. – revising the statement as you go. Use each of these opportunities to encourage planned gifts.

Have the Board sign off on the case statement with a formal board resolution. Your case should include specific information, a dollar goal, use, timeline, and agreed upon activities. Present the case statement to the rest of the organization, test it and refine by sharing it. This exercise should bring to the fore-front a one line statement or title that encapsulates the case, a key phrase that every volunteer, board member and staff can share with the community.

Use the Case to prepare an annual activity plan – see check list example.


Planned Giving Program ChecklistActivities Time frame

1. Develop draft of planned giving case statement, (staff)

date

2. Form a planned giving committee that is able to meet about four times a year. Their major focus is one-on-one meetings with prospects. (Job description)

Meeting schedule

3. Ask Board members to approve case statement and make their own planned gift commitments. Great opportunity for small meetings with Board members and key donors.

date

4. Make a motivational presentation to Board of Directors with volunteer/planned giver as main speaker.

date

5. Develop prospect list, who should be considered, how many per year can you feasibly reach?

date

6. Set up a system of technical support that will help you to provide information on bequests and charitable gifts, such as trusts, annuities, life insurance, advised funds, etc. (OCF offers that support for endowment partners),

date

7. Hold (a number) in-person conversations, preferably with volunteers involved with planned giving prospects, inviting them to become members of a (legacy society) and describing methods of joining.

date/schedule/who

8. Make planned giving presentation to volunteer groups.

date/schedule/who

9. Provide planned giving committee and board with an orientation to planned giving ethics and techniques. (OCF can support)

date

10.Begin to publish planned giving information, especially donor case histories/stories.

Publication date/where

11.Develop planned giving “legacy Society” recognition program, hold annual gathering. Will there be additional events.

date

12.Explore possibility of estate planning seminars, including on line support.

date/outcome

13.Present committee and Board with planned giving activities and goals for the year.

dates/assignments/follow-up

14.Review your website – expand or enhance planned giving section

date

15.Survey a few other comparable institutions and ask what they’ve done that has promoted planned gifts successfully.

date/who

16.Evaluate planned giving program annually. Was the plan implemented, how will you evaluate

date


your work?17.Based on year-one activities and outcomes

assess and plan year two.


Planned Giving Committee Job Description

Purpose:The Planned Giving committee is responsible for cultivating and soliciting current and future gifts that require the use of estate planning techniques. These gifts will significantly impact and support the organizations long term sustainability.

Composition: Community Leaders who are dedicated to your organization At least one of the members of the committee should also be a

member of the corporate Board. If the organization has a working Foundation/Development Board or committee members of that board should be included as well.

Responsibilities: Understand the organizations case for planned gifts Gain general knowledge of planned giving concepts Make a planned gift to your organization Develop and monitor planned giving activities for the year, assess and

evaluate Make annual planned giving presentation to the board Assist in the creation of a prospect list for planned gifts Assist in the solicitation and recognition of those donors Know planned giving ethics Open doors to staff for planned giving presentation to professional

advisors, volunteers, groups and others.

Qualifications for membership: Dedication to the organization Willing to complete own planned gift arrangement within a year of

joining the committee Capable of identifying prospects with the ability and willingness to

make a planned gift Willing to meet four times a year for two hours and participate in

planned giving events as required Willing to meet with prospects and ask for planned gifts face-to-face.

Tools: Create the necessary tools for solicitation Case Statement – easy to know and share Have in place a simple tracking data base, record information, track

donors


One on One Solicitation - The Conversation

A one-on-one conversation is a proven tool to help you make legacy-level connections with your donor. Use questions that are specifically designed to draw out who the donor really is, what motivates them, and that will give you unmatched insight into the values they hold most dear. But perhaps more importantly, you will deepen your relationship with your donor as a result of merely sharing this meaningful and perhaps personal conversation.

Your donor already sees the value in supporting your cause and wants to see his/her contributions well spent. With rare exceptions, your donor will want to share his wisdom. Listen closely to them to learn their charitable intent.

Ex. Call: We know that your contributions to are just one part of the impact that you are making in our community. If we can better understand how our mission fits into the overall personal vision of our major donors, we believe we can build an even stronger partnership, and make an even greater impact on our shared cause. Would you be willing to meet with us to discuss the role philanthropy has played in your life?

Possible Conversation or Feasibility Questions:1. Can you tell me a little about where and how you grew up – your

family, education etc?

2. Who were the people who most affected your personal values? What were the most important things you learned from them?

3. What did you learn about charitable giving and community service from your parents, grandparents, or other important people in your life?

4. Does your own personal faith tradition inform your giving? How?

5. In your view, what are some of the greatest needs today in your community, your country and the world? What would you do about them if you could?

6. Of course I know you’ve been a major contributor to , since . How did you learn about us and what led you to your generous and on-going support?

7. I’m sure you know that our Mission is to . What does our Mission help accomplish that is important to your own personal legacy? (You could also present your planned giving case – see how it resonates with the donor.)


8. What other organizations or causes or projects do you support?

9. How did you come to support these organizations, causes, or projects?

10.Have you set plans in place to support these organizations in your will or estate?

11.Can you tell me who you are supporting? Why?

12.If we are not included on your list can you tell me why?

13.Is there a way we can become part of your legacy gifts?

14.Are there groups or causes that you emphatically do not support, and why?

15.Please tell me about your first large charitable gift. What did you learn from that experience?

16.What other substantial contributions have you made to charitable causes? What motivated those gifts?

17.Do you feel the purposes for which you gave those gifts were accomplished? Did your giving make a significant difference? Why or why not?

18.In general, have you had positive experiences working with charitable organizations? What are some that are most significant for you?

19.As a supporter, what makes you feel most connected to an organization? What type of communication do you expect from those organizations to help maintain your sense of connectedness to the cause?

20.Have you had any past negative experiences with charities? What lessons did those experiences teach you? Teach them?

21.Besides making charitable contributions, are volunteering and community involvement an important part of your life?

22.To what types of causes and organizations do you give your time and service?

23.What impact has volunteering and community service had on your life?

24.Does that service impact your charitable donations?

25.Which gives you more personal satisfaction, making charitable gifts or volunteer and community service?


26.Is your family involved in philanthropic decisions? Have you discussed with them the reasons for the choices you have made to this point? (If they are grown) Do your children support some of the same causes? As adults do you see your values reflected in the causes your children support?

27.Are there any projects you would fund today if you had adequate or additional financial resources?

28.What would you hope to teach children, grandchildren or other loved ones about giving, volunteering and community service?


Understand the basics

What types of gifts will you accept, and how will they benefit the organization?

Current GiftsCash, to benefit your organization’s endowment fund can be given currently or as a planned gift.

Appreciated Property - (Have your gift policies in place!!) Long-term capital gain property, such as securities and real estate, are excellent gifts to charitable organizations. Generally, a donor may deduct the fair market value of the gift up to 30% of his or her adjusted gross income with a five-year carryover for any excess. The capital gain from the donated property passes tax-free to the charity.

Other Tangible Property - Stock in privately held companies, limited partnerships, personal property and other unique resources (artwork) are also excellent assets to contribute.

Deferred Gifts

The Oregon Community Foundation (OCF) will act as trustee for deferred gifts (often referred to as planned gifts) such as Charitable Remainder Trusts (CRTs) and Gift Annuities that ultimately benefit the charitable purposes of the donor’s choice.

OCF’s deferred giving program is flexible. It encourages Oregonians to establish CRTs or other deferred gifts that will ultimately create charitable funds. Deferred gifts can be useful in providing retirement supplements, converting an asset that has little or no current income into a stable income stream, reducing the value of an estate, generating a charitable deduction, and most importantly, providing a future gift in support of a donor’s philanthropic interests.

The leading form of planned gift is a bequest.

What is a bequest? A bequest, made through the donor’s will or living trust, is the simplest form

of “planned gift”.Bequests constitute 80-90% of all planned gifts. A donor’s bequest to charity

can be: a) stated amount of cash, securities, or other assets; b) “the residue” or a “percentage of the residue” of the estate; or


c) the donor can make the charity a contingent beneficiary of their estate – that is, a beneficiary only if their other named beneficiaries are no longer living at the time of their death.

The benefits to the donor of making a charitable bequest are: there is an estate tax deduction for 100% of the value of the gift a bequest is very simple to establish Bequests are revocable – that is, donors can change their minds at any

point before the time of their deaths.


Following is suggested language for a bequest to The Oregon Community Foundation:

I give, devise and bequeath: (describe assets which are the subject of the bequest) for example, a stated sum or the residue of the estate or a percentage of the residue of the estate) to The Oregon Community Foundation, Portland, Oregon, tax ID# 23-7315673, an Oregon nonprofit corporation (“OCF”), subject to the following conditions:

CONDITIONS1. The property and any additions shall be accounted for and

designated by OCF as the _______________________________________ Fund (“Fund”). [Usually your name or your family name, for instance the “Smith Family Fund” or the “John and Mary Smith Fund”].

2. The assets of the Fund may be commingled with other OCF property for investment purposes.

3. The Fund shall be subject to OCF's Articles of Incorporation and Bylaws, each as amended and restated from time to time, and the terms of this agreement shall be applied in all respects in a manner not inconsistent with said Articles and Bylaws (including without limitation the provisions thereof authorizing OCF to vary or modify restrictions or conditions that it believes are unnecessary, incapable of fulfillment, or inconsistent with the charitable, educational, and scientific needs of the state of Oregon).

Other beneficiary designation Gifts:Gifts of IRA Assets

IRA distributions are among the worst assets to pass along to heirs because of potential estate tax liability, plus, the beneficiaries pay income tax on the distribution. The combination of income and possibly estate taxes could approach 65% of retirement accumulations, depending on applicable tax rates. IRAs are likely to continue to be the most heavily taxed assets that can be left to heirs.

Funds from an IRA or qualified retirement plan where a charity is designated as beneficiary qualifies for an estate tax deduction and avoids income taxes because the charity is tax-exempt. Thus, a significant charitable gift can be made at relatively little cost. All a donor needs to do is name the charity as beneficiary of a portion of his/her IRA or qualified retirement funds. Following the donor’s death, that portion of the funds he/she designated will be paid to the charity in a lump sum, totally tax-free.

Gifts of Life InsurancePolicy-owners can direct that the proceeds be given to a charitable

institution as a deferred planned gift. This can be done without using a will or trust. There are approximately 400 million life insurance polices in force in the US, and in 1996, the face value of these policies exceeded $12 trillion.


This is a huge untapped resource. Not all donors know they can name charitable institutions as the first, second, or last beneficiary for a part of all of the proceeds from existing life insurance policies, simply by filling out a change-in-beneficiary form. Naming a charity as a beneficiary of a policy does not provide an income tax deduction since there has not been a completed gift of property. At death, the estate will include the full amount of the insurance proceeds but it can claim an offsetting charitable estate tax deduction.

A donor can also contribute a life insurance policy that the donor had purchased on his/her own life and on which no further premiums are due (a “paid-up” policy). Or, the donor can contribute a partially paid life insurance policy. The premiums will be paid by the donor to the charity and are tax deductible.

Planned giving tools:

Solicitation - Making the AskWhat is the number one reason people donate to charity? Because

they were asked! Planned gifts do not happen overnight. The average time from inception to maturity for a planned gift is 7 – 10 years. At the very minimum, you should start talking to your supporters about leaving a bequest because, if you don’t another organization most likely will. Start with the bequests because they are the simplest kind of planned gift and the one most often used. As you have more time to develop relationships with your potential donors, you can talk about more sophisticated planned giving vehicles.

Here are some conversation starters: Your annual gifts make such a difference to our organization,

have you considered leaving a planned gift to the library? Would you consider including the library in your estate plans? After you’ve taken care of your family, would you consider

leaving the library in your will? Are we already in your will? If so can we share that information

with other donors?

Once you have started the conversation, you can follow up with a one-on-one meeting to discuss specifics and the donor’s desires. Be sure to remind your donors that they will need to consult with their professional advisors for the best kind of planned gift, tax issues, and timing.

Recap your case statement as a conversation starter. It should be concise, compelling and told in terms that anyone should understand. (Think of it as an elevator pitch, because it should only take you as long as an elevator ride.) The language is informal and to the point. Example:

Bequests: “Your support of the library could be as easy as a simple designation in your will. It won’t affect your cash flow during your lifetime and can be revoked or amended if your situation changes.”


Life Insurance: “Did you realize that you can make a gift to the library by assigning the library as a beneficiary on your policy?”

Retirement Plans” “Retirement funds can be heavily taxed if passed on to your heirs. They’re tax free if given to the library.”


Marketing your Planned Giving Program“If a tree falls in the forest, and no one is there to hear it…….” You

know the rest. The most important thing about marketing your planned giving program is to be consistent and diligent about getting the word out.

You should plan to include something about planned giving in your marketing materials. It could be an article or notice in each of the organization’s newsletters or mailings, a link on the website, a brochure, a program series within the organization, etc. Start out simple by promoting bequests.

Newsletter ArticlesBegin an awareness campaign about planned giving in your library’s

newsletter. A small ad, a brief article, or a donor will communicate the options of charitable bequests to supporters in your newsletter or mailings. These communication methods bring planned giving information to the attention of potential donors on a regular basis. Articles don’t have to long or detailed; just plant the seed to open up further discussion.

Begin your article or notice with a title or tage line, perhaps from your case statement, that is intended to catch a reader’s eye and attention, and then tell the story.

Examples:“Tomorrow’s results are created by today’s dreamers. Many people

dream of a way to help the library grow in the future. Some find that a good way to accomplish this is to designate the library as the beneficiary of all or part of your retirement plan or life insurance policy. Learning more about this support option happens when you call [contact name and number]”

“In recent years, donors have informed us of their intention to include a gift to [your organization] in their wills. These gifts provide an estate tax deduction and have a tremendous impact on our ability to [state purpose]. If you would like information on how to include [organization] in your will or estate plan, please contact us, we would be happy to visit with you. [name, contact info]”

“Libraries matter! While an overwhelming number of people believe library services should be a top priority, many are unaware of the financial difficulties facing American libraries. An easy way for anyone to provide support is through a gift provision included in a will. The wording is simple and can be provided by our organization. Directing your support to any of the library’s highest priorities, such as 1….., 2……, or 3…… -- would be appreciated. To learn more about planned giving choices please call [contact name and info].”

“There is yet another way for you to express you commitment to the goals of the [library] through a planned gift. Once your have provided for loved ones in your will, you may want to include a gift of money, stock or property to the library. Your gift will be a lasting tribute to your concern for


our mission, while guaranteeing the library’s long-term future. For further information on how to include [organization] in your charitable giving plans, please contact [name contact info].”

Use Your WebsiteCreate a simple web page or pages outlining the type of gifts you

accept, how to give and who to contact. Link this web page to the organization’s website. Include donor stories and testimonials, if possible, and talk about the impact planned gifts have made – and can continue to make – to the organization. You’ll want the web page(s) to motivate your prospects to make a planned gift, or at least learn more about planned giving.

The web page(s) should be designed for maximum ease of navigation. If it’s not clear and easy, your prospective planned gift donor may give up. If it is not an easy page to navigate – don’t use it.

Mail CampaignsIF you feel you want to get the ball rolling with broad base awareness

of your planned giving program AND you have the funding for design, print and postage for a direct mail piece there are some things to consider. The mail piece should highlight your case statement while being inviting to prospects, supporters and volunteers who may consider a planned gift. To produce a simple mailing, consider:

Personalized letter:Send a personalized one-page letter telling prospects about the

library’s bequest program. Let them know the important role bequests have played in your library’s history and encourage them to visit with your staff or volunteer [provide contact information] to learn more. (Go searching on line, you will get great ideas)

Response Card and return envelopes:Include a postcard-sized response card and a self-addressed

envelope (no stamp) that can be mailed back to your organization. Provide space for the donor’s name and contact information for your date base. Be sure to address the return envelope to the attention of the designated individual to ensure confidentiality.

Sample response card text: I/we have included the [name of the organization or receiving organization] in our will or trust. I/we are interested in including the [organization]in our will or trust. Please send information on leaving a gift in our will or trust

Follow-upTwo or three weeks later, follow up!!! You can assign members of your

development committee or staff members to give the prospective donor a call. (Remember you have already used the mail)


VITAL - Tracking/DocumentationWhen a donor decides to include your organization in his or her estate

plans, it is a cause for celebration. They’ve just made a decision to give a meaningful and long–lasting gift of support.

Regardless of the type of planned gift an individual wishes to make, it is important to have the donor’s wishes documented in writing. In the case of a bequest, try io get a copy of the will for your files. With other planned gifts get a copy of the retirement plans, beneficiary forms. Etc. The document can be placed in the donor’s file and on an expectancy form for future reference. You want to make sure that you have as many details as possible to execute the gift properly once it is received. That includes using the gift as designated by the donor.

Then smile! Thank your donors and keep them engaged!


The Oregon Community FoundationDeferred Gift Guidelines

BequestsThe Oregon Community Foundation (OCF) can provide donors or their legal advisors with bequest language for inclusion in a will. OCF prefers that a testamentary fund agreement accompany the bequest – please refer to our “Guide to Giving” brochure for additional information on our wide variety of flexible fund options.

Charitable Remainder Unitrusts and Charitable Remainder Annuity TrustsOCF will consider acting as trustee of a charitable remainder trust that meets these general guidelines:

Minimum age of each beneficiary is 55 years. The payout percentage to the income beneficiary is between 5% and

7%. Minimum gift amount is $100,000. Donors may make additional

contributions to a charitable remainder unitrust, but not an annuity trust.

OCF is named as the irrevocable remainder beneficiary.

Charitable Gift AnnuitiesOCF will consider issuing gift annuity contracts for charitable gift annuities that originate in Oregon and meet these general guidelines:

Minimum age of the annuitant is 65 (55 for deferred gift annuities). The annuity rate will not exceed the rate published by the American

Council on Gift Annuities (www.acga-web.org). Minimum gift amount is $25,000. A donor may not make additional

contributions to a gift annuity. Gift asset is cash or marketable securities.

Charitable Lead TrustsOCF will consider acting as trustee of a charitable lead trust on a case by case basis.

Costs of Charitable Trusts and Gift AnnuitiesOCF does not charge a fee for serving as trustee of charitable trusts or issuing charitable gift annuities. However, direct expenses incurred in administering and investing deferred gifts are charged to the trust or gift annuity reserve. These expenses include:

Third-party trust administration and investment management fees, currently about 0.8% of market value per year. OCF’s current


http://www.acga-web.org/

administrator and investment manager for most deferred gifts is Kaspick & Company.

Legal expenses for preparation or review of trust documents. Expenses associated with completing due diligence on non-cash assets

(for example, an environmental assessment of real property). Expenses to insure and maintain non-cash assets prior to their sale.

When a trust is created with a non-cash asset, such as real property, an additional cash donation may be required to cover the above expenses.

Charitable Use of Trust and Gift Annuity ProceedsDistributions to OCF from Remainder Trusts and Lead Trusts may establish a permanent named OCF fund in support of charities or purposes chosen by the donor. If OCF serves as trustee, at least 50% of the charitable remainder is required to either be added to an existing OCF fund or to be used to create a new permanent fund at OCF. The remainder may be distributed directly to the donor’s charities of choice. The donor may also retain the right to modify the use of the fund or the charities named in the trust agreement during their lifetime.

OCF holds the full value of a gift annuity in reserve until the contract expires. If the original value of the gift annuity was $100,000 or more, the remainder can create a permanent named OCF fund in support of the donor’s charitable interests. If the original value of the gift annuity was under $100,000 the remainder is directed to one of three OCF funds: The Oregon Fund, The Oregon Scholarship Fund, or the Administrative Endowment Fund. Under special conditions the remainder can be directed as a permanent addition to an OCF Endowment Partner fund.

Gift Acceptance ReviewAll deferred gift conditions and terms, including acceptance of non-marketable assets, must be approved by OCF’s Deferred Gift Acceptance Committee prior to preparation of trust documents or a gift annuity contract by OCF counsel, or review by OCF counsel if documents are prepared by an outside party.

The Foundation will consider acting as successor trustee to existing CRTs if the trust complies with Foundation policies.

Additional InformationTo learn more, please see The Oregon Community Foundation’s “Guide to Deferred Giving,” or visit our website at www.oregoncf.org to read about deferred giving or locate the OCF Charitable Gift Planner nearest you.


OCF may not provide tax or legal advice. All donors are encouraged to consult with their own tax and legal advisors. All trust documents should be reviewed by the donor’s professional advisor.

http://www.oregoncf.org/

Planned Giving Program Basics

Presented by:Maureen Thomas

Oregon Community Foundation

July 11, 2011


Documents

Implementing a Basic Planned Giving Program€¦ · Web viewGifts of Life Insurance Policy-owners can direct that the proceeds be given to a charitable institution as a deferred planned