2019 annual charitable gift report€¦ · bny mellon wealth management’s 2019 annual charitable...

2019 Annual

Charitable Gift Report

2 | 2019 CHARITABLE GIFT REPORT

Table of Contents

Key Themes for 2018 . . . . . . . . . . . . . . . . . . . . . . . . .3

Charitable Gift Annuities . . . . . . . . . . . . . . . . . . . . .5

Charitable Gift Annuity Donor Profile . . . . . . . . .5

Trends in Gift Activity . . . . . . . . . . . . . . . . . . . . . . . .5

Gifts by Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Gifts by Month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Gifts by Organization . . . . . . . . . . . . . . . . . . . . . . . .7

Gifts by Contract Type . . . . . . . . . . . . . . . . . . . . . . .8

Gifts of Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Location of Donors . . . . . . . . . . . . . . . . . . . . . . . . 10

Donor Demographics . . . . . . . . . . . . . . . . . . . . . . 11

Annuity Terminations . . . . . . . . . . . . . . . . . . . . . . 12

Gift Acceptance Policies . . . . . . . . . . . . . . . . . . . 13

Charitable Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Trusts by Organization . . . . . . . . . . . . . . . . . . . . . 14

Trusts by Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


Trust Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17


Looking Ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

About BNY Mellon Planned Giving . . . . . . . . . . . . 23

BNY Mellon Wealth Management’s 2019 Annual Charitable

Gift Report assesses the planned giving landscape, levels of

giving and donor behavior to provide insights, context and

benchmarks .

This report provides analytics and observations on the

charitable gift annuity (CGA) and charitable remainder trust

(CRT) activity during the calendar year 2018 for 109 non-

profit organizations .

Organizations represented in this report:

54%Education

21%Faith-based

15%Social services

/Other

6%Cultural

4%Health care

About This Report

Additional information from BNY Mellon’s Planned Giving

Program survey is also incorporated in this report . The

survey gathered data from 40 clients on gift acceptance

policies, donor behavior and growth opportunities related to

planned giving .

511New CGAs

737CGA

terminations

37New CRTs

99Additions

to CRTs

Gift activity during 2018

1Data for the report is based on completed gift records in our database as of March 12, 2019 for the calendar year 2018 . Gift information collected after March 12 is not reflected in the data .

2019 CHARITABLE GIFT REPORT | 3

Table of Contents

Key Themes for 2018 . . . . . . . . . . . . . . . . . . . . . . . . .3

Charitable Gift Annuities . . . . . . . . . . . . . . . . . . . . .5

Charitable Gift Annuity Donor Profile . . . . . . . . .5

Trends in Gift Activity . . . . . . . . . . . . . . . . . . . . . . . .5

Gifts by Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Gifts by Month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Gifts by Organization . . . . . . . . . . . . . . . . . . . . . . . .7

Gifts by Contract Type . . . . . . . . . . . . . . . . . . . . . . .8

Gifts of Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Location of Donors . . . . . . . . . . . . . . . . . . . . . . . . 10


Annuity Terminations . . . . . . . . . . . . . . . . . . . . . . 12


Charitable Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Trusts by Organization . . . . . . . . . . . . . . . . . . . . . 14

Trusts by Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


Trust Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17


Looking Ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

About BNY Mellon Planned Giving . . . . . . . . . . . . 23

KEY THEMES FOR 2018

Several key factors affected the planned giving landscape in 2018 . The 2017 Tax

Cuts and Jobs Act legislation went into effect at the beginning of the year, the

American Council on Gift Annuities (ACGA) changed recommended gift annuity

rates and investments experienced a volatile market in the fourth quarter . While

we cannot state with certainty the impact of these factors on new planned gift

activity, the downward trend in gifts continued from prior years .

A survey of our clients’ reflections on giving in 2018 reveals:

• Over half of respondents (55%) saw no impact to charitable giving in 2018

resulting from the Tax Cuts and Jobs Act, while 25% indicated a negative

impact

• Following the increase in recommended rates by the ACGA in July 2018, 70%

of respondents saw no increase in charitable gift annuity activity

• 78% of respondents characterized their ability to close planned gifts of real

estate or other non-cash assets as “successful” or “somewhat successful”

New charitable gift annuities down 16% from 2017

New trust gift amounts (including additions) down 10% from 2017

Charitable gift annuity residuum 82%

Average charitable gift annuity $85,000 ($25,000 median)

Average charitable remainder trust $607,000 ($44,000 median)

Highlights from 2018 Gift Activity

BNY Mellon Planned Giving Client Feedback


A QCD or qualified charitable distribution (also known as an IRA Charitable Rollover) is a

distribution of up to $100,000 annually that can be directed by individuals aged at least

70 .5 from a traditional IRA to charity . The QCD not only qualifies towards the annual required

minimum distribution (RMD), it also reduces the donor’s taxable income .

Giving Landscape

According to the “Giving USA 2019 Annual Report,” total giving nationally was

just shy of $428 billion in 2018, essentially flat over the prior year and slightly

lower when adjusted for inflation . There were unprecedented changes in both the

sources and recipients of contributions in 2018 . The amount of contributions as

a percentage of total giving from corporations, foundations and bequests stayed

relatively unchanged from 2017; however, giving by individuals decreased to below

70% of total giving for the first time since at least 1954 .

Educational organizations remained second to religious organizations for

total gifts received during 2018, although both of these organization types saw

declines in overall contributions compared to the prior year . In fact, religious

organizations fell below 30% of total gift receipts for the first time ever .

Not all giving trended flat or downward, however . Gifts to donor advised funds

continue to increase, with donor advised funds routinely established as part of a

donor’s philanthropic and tax planning . Qualified charitable distributions from

IRAs (QCDs) are also increasing, with charities surveyed by Freewill indicating an

average growth of 73 .8% from 2017 to 2018 .

2Giving USA 2019 Annual Report3Freewill, 2019 Charitable Report on Qualified Charitable Distributions from IRAs

What is a Qualified Charitable Distribution (QCD)?


CHARITABLE GIFT ANNUITIES

Charitable Gift Annuity Donor Profile

2014 2015 2016 2017 2018

Number of Gifts 607 593 569 608 511

Total Gift Amount $43 .2M $65 .8M $41 .3M $61 .3M $43 .4M

Annual Payments $3 .0M $5 .2M $2 .7M $3 .9M $3 .0M

Median Gift Size $25,000 $25,000 $25,000 $25,000 $25,000

Avg . Gift Size $71,000 $111,000 $73,000 $101,000 $85,000

Median Donor Age 81 81 80 80 78

Avg . Donor Age 79 80 80 79 78

*Payout rate based on ACGA-recommended payout rate

Husband/wife joint donors with successive lives

78 years old Repeat donor(s)

Residents of New York

Giving to educational or social services institutions

$25,000 cash gift

Payout rate* 6 .8%

Trends in Gift Activity


Gifts by Size

Average

Median

Min

Max

22%

50%

17%

49%

5%

18%

73%

86%

Annuitant concentration measures the total annuity payments as a percentage of total CGA pool payments attributed to a single annuitant . Concentration risk is an important consideration when a large portion of a gift annuity pool is concentrated with a few donors . If any of those donors outlive their life expectancy or if a market downturn causes the gift values to decline, the entire pool — or perhaps even the charity directly — would have to bear the burden of subsidizing the annuity payments for those gifts . Over time, the effects of this concentration risk can be quite costly and detrimental to the overall CGA pool . Repeat donors are great donors, but it is important to consider the impact on the overall CGA pool for multiple-gift donors .

Evaluating key metrics and putting the right processes in place can help improve the likelihood of a CGA pool’s viability over time . Learn more about how market volatility, the timing of investment returns and the makeup of the pool of annuitants can all carry risk for CGA programs in our article Understanding Key Metrics for a Healthy Charitable Gift Annuity Pool .

What is Annuitant Concentration and Why is it Important?

Annuitant Concentration for Clients with 20 or More AnnuitantsClient count = 64

Top Donor Top 5 Donors

4Based on number of contracts

2018 New Gifts by Size

Trends in Gifts by Size 4

0

20

40

60

80

100

% of Gift Amount20182017201620152014

0

20

40

60

80

100

20182017201620152014

0

20

40

60

80

100

% of Gift Amount% of Contracts

0

20

40

60

80

100

% of Gift Amount20182017201620152014

0

20

40

60

80

100

20182017201620152014

0

20

40

60

80

100

% of Gift Amount% of Contracts

1%

456

14

23

217%

<112

944

17

Gifts over $1M

$500k - 1M

$100k - 500k

$50k - 100k

$10k - 50k

up to $10k

Gifts over $1M

$500k - 1M

$100k - 500k

$50k - 100k

$10k - 50k

up to $10k

https://www.bnymellonwealth.com/articles/strategy/understanding-key-metrics-for-a-healthy-charitable-gift-annuity-pool.jsp

https://www.bnymellonwealth.com/articles/strategy/understanding-key-metrics-for-a-healthy-charitable-gift-annuity-pool.jsp


Gifts by Month

Gifts by Organization

0

2

4

6

8

$10

Dec.Nov.Oct.Sept.Aug.JulyJune MayAprilMarchFeb.Jan.0

30

60

90

120

150

Gif

t Am

ount

s (M

illio

ns)

Num

ber

of N

ew G

ifts

Gift Amount (Standard) Gift Amount (Deferred) Gift Amount (Flexible)

Number of New Gifts

While at least 80% of all programs issued new CGA contracts in 2017, that figure dropped to 70% in 2018 . This decline in the percentage of organizations issuing new CGA contracts was driven by Social Services/Other organizations, which fell from 88% in 2017 to 56% in 2018, and Health Care organizations, which fell from 80% in 2017 to 60% in 2018 .

Number of New Gifts and Gift Amounts by Month

Percentage of Organizations That Received New Gifts in 2018

80%Educational

44%Faith-based/

Religious

56%Social services/

Other

83%Cultural

60%Health care


Gifts by Contract Type

Consistent with findings in the 2017 ACGA Survey on Charitable Gift Annuities, our data shows that new deferred and

flexible deferred annuities are increasing . Flexible/deferred annuities are often considered by younger annuitants

who do not have an immediate need for income, perhaps because they are still in their income-earning years, but

want to have a stream of fixed income later in life . Funding multiple flexible/deferred CGAs with various payment

start dates, sometimes known as “laddering,” is a technique that allows annuitants to increase the amount of income

received over time to address possible income needs in the future .

New CGAs

# Contracts

Gift Amount

Avg . Contracts

per Org .

Average Gift

Amount

Educational 67% 63% 74% 8 $99,800

Social Services/Other 12% 18% 13% 13 $61,600

Faith-Based/Religious 8% 10% 6% 10 $54,000

Cultural 8% 7% 4% 7 $52,200

Health Care 5% 2% 3% 4 $129,200

Distribution of New Gifts in 2018 by Organization Type

Number of Contracts Value of Contracts

Standard 82% 89%

Flexible 14% 9%

Deferred 4% 2%

2018 Gifts by Contract Type

Flexible / Deferred Annuities: Laddering for Retirement


It’s not surprising that the number of non-cash assets closely trends to the S&P 500 Index as donors can support their philanthropic goals and take advantage of the tax benefits of gifting appreciating assets . However, planned gifts overall are not seeing the same increase in giving that follows the growth in the S&P 500 Index .5 The decline in total giving is also an interesting counterpoint to the 2 .7% increase in Gross Domestic Product (GDP) and the 5% increase in disposable income from 2017 .

Cash vs . Non-Cash Gifts

New CGAs vs . S&P 500 Index

Gifts of Cash

0 20 40 60 80 100

2018

2017

78% Cash 22% Non-Cash

76% Cash 24% Non-Cash

5 Giving USA 2019

%S

&P

500

Non

-Cas

h G

ifts

25

20

15

10

5

0

% 3000

2500

2000

1500

1000

5002004 2006 2008 2010 2012 2014 2016 2018

S&

P 5

00

% of Total Non-Cash S&P500

Non-Cash Gifts vs . S&P 500 Index

S&

P 5

00

New

CG

As

10

8

6

4

2

0

3000

2500

2000

1500

1000

500

0

S&

P 5

00

New CGAs S&P500

2004 2006 2008 2010 2012 2014 2016 2018


Location of Donors

9%Central

Average gift value

$75,700

30%Pacific

Average gift value

$105,200

31%Northern

Average gift value

$68,000

27%Southern

Average gift value

$103,4004%

Western

Average gift value

$60,100

Gifts from California donors were

64% greater than

non-California donors

Western

Southern

Pacific

Northern

Central

40

60

80

100

2018201720162015

Trends in Giving by Region 6

Top Five States (No . Gifts) Top Five States (Gift Amount)

New York 13 .0% California 18 .5%

California 12 .2% New York 13 .0%

Florida 9 .8% Tennessee 8 .4%

Pennsylvania 5 .7% Florida 8 .1%

New Jersey 5 .7% Virginia 6 .2%

Donor Location Relative to Organization’s Primary Location

34% Donors in Organization’s state

66% Donors outside of Organization’s state

Northern

SouthernCentral

Western

Pacific

6Percentages based on gift amount .


Donor Demographics

53% Male

47% Female

Over 9080-8970-7960-6950-59Under 50

Deferred Flexible Standard

Standard 80 years

Deferred 68 years

Flexible 65 years

Repeat Donors

58% repeat donors

42% new donors (down from 47% in 2017)

Age of Donors at Gift

Gender of Donors

Average Age by Annuity Type


The American Council on Gift Annuities (ACGA) is a qualified non-profit organization formed in 1927 . Composed of

professionals active in the field of planned giving with some of America's most well-respected charities, the ACGA’s

mission is to foster the success of charitable gift annuity programs at charities nationwide through the promulgation of

suggested maximum gift annuity rates, education, research, monitoring state regulations, advocacy and other activities

that promote good gifts for non-profits and their donors .

One of the primary activities of the ACGA is the publication of suggested maximum charitable gift annuity rates for use

by charities and their donors . The ACGA’s suggested maximum rates are recognized not only by charities and donors,

but also by state insurance departments and the IRS as being actuarially sound and in the best interests of all parties

involved .

Generally speaking, the ACGA's suggested maximum rates are designed to produce a target gift for charity at the

conclusion of the contract equal to 50% of the funds contributed for the annuity . The rates are further predicated on the

following:

• An annuitant mortality assumption equal to a 50/50 blend of male and female mortality under the 2012 Individual

Annuity Reserving Table (the 2012 IAR)

• A gross investment return expectation of 4 .75% per year on the charity's gift annuity funds (which is up from the

previous return assumption of 4 .25%)

• An expense assumption of 1% per year

Source: www .acga-web .org

Annuity Terminations

2014 2015 2016 2017 2018

Number Terminated 812 904 1,362 872 737

Residuum % 82 .9% 87 .3% 90 .4% 92 .4% 82 .2%

Value of Terminated Gifts $30 .2M $26 .9M $30 .0M $36 .2M $37 .6M

Average Actual Gift Duration 13 years 14 years 18 years 13 years 13 years

Median Actual Gift Duration 12 years 13 years 14 years 13 years 13 years

Effective Payout of Terminated Gifts 11 .5% 11 .6% 12 .8% 11 .5% 10 .5%

Initial Payout Rate Average 8 .3% 8 .1% 7 .9% 8 .3% 8 .0%

The ACGA 2017 Survey on Charitable Gift Annuities reported average residuum for annuities terminated in the last five years at 62%, down from 64% in 2013 .

What is The American Council on Gift Annuities (ACGA)?


Gift Terminations and Residuum Value by Gift Year

Deferred CGA Trends

2018 Deferred CGA Terminations

Residuum % Average Deferral Length

Deferred CGA 154 .7 4 years

Standard CGA 79 .9 n/a

• 31% have a minimum annuitant age of 60 for immediate payment CGAs

• 35% have no minimum age requirement for flexible or deferred CGAs

• 69% have a minimum gift amount of $10,000 for both immediate CGAs and flexible or deferred CGAs

• 21% have a minimum gift amount of greater than $10,000 for both immediate CGAs and flexible or deferred CGAs

Policies on Gift Size

Gift Acceptance Policies7

Policies on Age

7Source: BNY Mellon’s 2018 Planned Giving Program client survey .

Res

iduu

m %

300

250

200

150

100

50

0

% 250

200

150

100

50

0<1990 1990-1994 1995-1999 2000-2001 2005-2009 2010-2014 >2014

# o

f Ter

min

atio

ns

# of Terminations Residuum %

Gift Year

45

35

25

15

5

%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Deferred CGA % of All Gifts (#) Deferred CGA % of All Gifts ($)


CHARITABLE TRUSTS

New trust activity continued to fall in 2018 . Out of the 84 organizations with trust programs, only 16 had new trust activity, down from 18 organizations with new trust activity in 2017 .

Organizations With New

Trusts

New Trust (#)

New Trust ($)

Organizations with Trust Additions

Trust Additions

($)

Educational 75% 68% 53% 79% 90%

Social Services/Other

6% 5% 5% 5% 4%

Cultural --- --- --- 5% 1%

Faith-Based/Religious

13% 22% 10% --- ---

Health Care 6% 6% 33% 11% 5%

TOTAL 16 37 $22 .5M 19 $9 .3M

Number Amount Number Amount

Uni 19 $13 .4M 76 $8 .2M

Net Income 15 $8 .3M 23 $1 .1M

Annuity 1 $0 .7M --- ---

Lead 2 $0 .1M --- ---

37 $22 .5M 99 $9 .3M

New Trusts Trust Additions

Trusts by Organization

Trusts by Type

Activity by Type of Trust


Despite broad versatility and a favorable interest rate environment, Charitable Lead Trusts (CLTs) have remained the poor stepsisters to the more popular Charitable Remainder Trusts . Joan Crain, Global Family Wealth Strategist and Senior Director at BNY Mellon Wealth Management, suggests that CLTs may provide a superior solution for donors in certain situations, particularly for people facing significant income tax payments due to a one-time event such as the sale of their business .

With the groundswell of baby boomer business owners reaching retirement age and receiving large sums as they sell their businesses, dealing with a spike in income tax liabilities has become a priority . Making charitable donations by the end of the year of the sale is one of the easiest and, for many, one of the most satisfying ways for former business owners to offset some of the taxes due . While outright gifts to non-profits can be the answer for some, those receiving large payouts often prefer a more structured format . A Charitable Remainder Trust (CRT) is the first choice for many . However, as wealth advisors we can help our clients look beyond the more obvious and consider a CLT .

At the end of 2018, BNY Mellon Wealth Management worked with a client who had sold the majority of her business earlier that year and was seeking ways to reduce her looming income tax bill . She was aware of CRTs and was already involved in philanthropic activities, so she sought our advice in setting up one . However, since she did not need an annual income stream (she had other sources of income to fund her lifestyle) and did not have assets with significant embedded capital gains, the CRT did not seem the ideal vehicle for her situation .

We proposed she place $5 million in a 15 year grantor CLT, paying an annual annuity of 11 .5% of the original funding to the donor advised fund (DAF) that she had established many years prior .8 After 15 years, any remainder will pour into trusts for her children under BNY Mellon’s oversight as an independent trustee . This provided a $5 million income tax deduction in 2018 and has the added benefit of mitigating the estate taxes she will eventually have to pay at death .9 In addition, of equal importance to her is the protection the trusts will provide for her children and the opportunity to fund a substantial DAF in which she can involve her children .

How Does a CLT Work?

1 . Donor funds an irrevocable trust with charitable and non-charitable beneficiaries . The trust may last for a term of years or for the donor’s lifetime .

2 . During the term of the trust, the charitable beneficiary “leads” in receiving distributions in the form of a fixed annuity or a fixed percentage of the annual market value

3 . At the end of the trust term, the remaining assets flow to non-charitable beneficiary(ies), typically children or trusts for children

4 . There may be gift tax due on the funding of the trust, depending on the projected remainder going to the non-charitable beneficiaries; however, this can often be minimized and even eliminated by increasing the payout to the charity and/or lengthening the trust

811 .5% was the annuity payment that would result in no gift tax at the time of this planning

9In order to receive an income tax deduction, this has to be a grantor CLT, so each year net income from the investments will be taxed to our client . However, using tax-efficient investments, we estimate the annual tax burden over the 15-year term can be

minimized .

Charitable Lead Trusts: A Timely Technique


Donor Demographics

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2018 5 YrAvg

2018 5 YrAvg

2018 5 YrAvg

2018 5 YrAvg

2018 5 YrAvg

2018 5 YrAvg

<50 yrs 50-59 yrs 60-69 yrs 70-79 yrs 80-89 yrs 90+ yrs

Lead

Annuity

Net Income

Uni

65% Male

Gender of Donors

Age of Donors at Gift – 2018 New Gifts vs . 5-Year Average

Average and Median Age: 75 years

35% Female


Average Gift Values and Market Performance

Trust Activity

Payout Rates and Trust Formation Remain Below Pre-Recession Levels

Impact of AFR and Market Performance on Trust Formation*

10 Based on current clients over rolling 15 years .

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

S&

P 5

00 In

dex

3000

2500

2000

1500

1000

500

0

1200

1000

800

600

400

200

Aver

age

Gif

t Val

ue ($

000

s)

Gift Value ($000s) S&P 500

# of New Gifts Average of Payout %

AFAR % New Trusts % S&P 500

# o

New

Tru

sts

160

140

120

100

80

60

40

20

6 .8%

6 .6

6 .4

6 .2

6 .0

5 .8

5 .6

5 .4

5 .2

5 .0

Pay

out R

ate

AFR

14

12

10

8

6

4

2

0

3000

2500

2000

1500

1000

500

0

S&

P 5

00 In

dex


Gift Acceptance Policies

Minimum age:

Minimum gift size:

11Source: BNY Mellon’s 2018 Planned Giving Program client survey

11

65: 10%

60: 10%

50-55: 11%

45 or younger: 6%None: 60%

No minimum age with deduction requirement: 3%

$400,000: 3%

$250,000: 15%

$100,000: 54%

$50,000: 8%

No minimum: 20%


The gift illustration is an extremely important part of the cultivation and negotiation of any life income gift . A thoughtful gift illustration can help donors visualize the impact that their gift will have on their financial plans and the ultimate charitable beneficiary . When developed properly, a gift illustration will provide realistic expectations for a variety of possible outcomes and set the stage for a lifetime of stewardship opportunities for charities and philanthropic goals for donors .

One of the most important inputs for any gift illustration is the expected rate of return . Small changes to the expected rate of return will have a significant impact on the outcomes shown in a gift illustration . Using a high expected rate of return will make the financial outcomes look favorable, but could lead to disappointment in the future should the actual returns come in lower . Using a low expected rate of return can make the gift look unattractive financially and possibly scuttle the gift . So, what expected rate of return should be used for gift illustrations?

Using the rate of return for the S&P 500 or a blend of stock and bond benchmarks over the last 10 years might seem like a reasonable place to start . Unfortunately, using historic returns is not a reliable predictor of future returns . Using historic returns today, in the midst of one of the longest economic expansions in the U .S . over the past 90 years, would be misleading at best . For the 10-year period ending December 31, 2018, the S&P 500 returned 13 .1% on an annual basis . This rate of return is much higher than historic averages and is reflective of the post-2009 Fed stimulus-driven recovery . It is unlikely that we will experience the same market conditions again any time soon . Past performance is not a guarantee of future results!

Rather than relying solely on historic returns data, BNY Mellon Investment Management develops capital market return assumptions for approximately 50 asset classes around the world . These forward-looking assumptions are based on a 10-year investment time horizon and are intended to guide investors in developing their long-term strategic asset allocations . BNY Mellon uses these assumptions to construct expected return and risk estimates that can be used to model a variety of portfolios, including life income vehicles . We believe that these forward-looking expected returns based on general market expectations, consensus data and BNY Mellon’s forecasts will provide reasonable and realistic results when used in gift illustrations . Visit bnymellon .com to learn more about our 2019 Capital Market Assumptions .

LOOKING AHEAD

Expected Returns for Gift Illustrations

https://www.bnymellonwealth.com/articles/vision/our-10-year-capital-market-assumptions.jsp


The table below shows the expected returns for six different risk/return profiles based on BNY Mellon’s 2019 Capital Market Assumptions and BNY Mellon Wealth Management’s Investment Strategy Committee-recommended asset allocation .

Giving trends are changing and donors are exploring ways to give beyond traditional “check-writing” philanthropy such as creating portfolios of social investment . Increasingly, donors are looking for solutions and are looking to non-profits with whom to partner and not just to give . Planned giving programs can thrive by examining new tools, including:

• Private label donor advised fund

• Promoting planned gifts to maximize blended giving

• Researching new ways to segment the donor base along age demographics and affinity groups to create convening opportunities to meet donors where they are with the tools they want to utilize

Strategy IncomeModerate

IncomeBalanced

Growth with Income

GrowthAggressive

Growth

Equity%/Fixed% 30/70 40/60 50/50 60/40 70/30 80/20

Expected Return (WM_2019)

4 .60% 4 .82% 5 .15% 5 .45% 5 .72% 5 .98%

Opportunities


Crystal Thompkins, CAP®, CSPGCM

National Director of Gift Planning Services

Crystal is national director of gift planning services for the BNY Mellon Wealth Management Planned Giving group . In this role, she is responsible for managing the client relationship teams in Greensboro, North Carolina and Boston, Massachusetts . She also works directly with large, complex clients on all aspects of their planned giving programs and coordinates resources throughout BNY Mellon to provide support and expertise .

Crystal joined the firm in 2006, when Mellon acquired U .S . Trust’s planned giving business . She has more than 18 years of experience in the planned giving business, including charitable trust tax preparation and tax process management .

Crystal received a bachelor’s degree in accounting from Winston-Salem State University and is a Chartered Advisor in Philanthropy .® She is a member of the Partnership for Philanthropic Planning and Serves on the boards of the American Council on Gift Annuities (ACGA) and the Winston-Salem State University Foundation .

David Hohler, CFA Director of Investments

David Hohler is the director of investments for the BNY Mellon Wealth Management Planned Giving group with over 15 years of investment management experience . David leads the team in working with clients to design, implement and actively manage their investment portfolios . In addition, he provides counsel and advice on best practices regarding asset allocation, spending rates, investment policy, manager selection and performance evaluation .

David joined the firm in 2006 . Prior to that, David worked at Frank Russell & Co . in Tacoma, WA . While at Russell, David served as manager of portfolio trading operations . In this role, he supervised the team responsible for the data management, cash flow monitoring, reconciliation, portfolio accounting and performance measurement of derivatives-based overlay and hedge strategies .

David received a bachelor’s degree with a major in economics from the University of Delaware and a master’s degree of business administration from Seattle University . David is a CFA Charterholder and a member of the CFA Society Boston .

Alexander ShermanLead Analyst, Client Reporting & Performance

Alex is a lead analyst, focusing on client reporting and data analytics for BNY Mellon Wealth Management’s Planned Giving Group . In this role, he serves as the organization’s expert on all reporting and data platforms utilized by the Charitable Solutions teams . He provides operational support to the client relationship and investment officers, and is responsible for producing standardized and ad hoc reports . He specializes in developing automated reporting and analytics solutions . He works with corporate technology in developing client portal enhancements .

Prior to joining BNY Mellon in 2015, Alex served in an operational management role at State Street Bank and Trust, where he was responsible for process automation, risk control enhancement and efficiency initiatives .

Alex received his bachelor’s degree from Bryant University with a concentration in finance .

CONTRIBUTORS

BNY Mellon Planned Giving


Joan K . Crain, CFP®, CTFA, TEPSenior Director, Global Family Wealth Strategist

Joan Crain works closely with families and their advisors to provide comprehensive wealth planning . She specializes in multinational planning, business succession, family governance and philanthropy .

With more than 25 years of experience working with large, multigenerational families, she is frequently invited to speak to clients and professional groups such as the American Bar Association, the Hong Kong American Chamber of Commerce and numerous estate planning councils throughout the United States, Canada, the Middle East and Asia . She has recently been featured in various publications and broadcast media including The Wall Street Journal, Trusts & Estates magazine, the American Journal of Family Law and CNBC-Asia .

Joan received her MBA (Finance) from Rollins College, her Bachelor of Education from Queens University, and her Bachelor of Music from McGill University . She holds the designations of Certified Financial Planner, Certified Trust & Financial Advisor and the International trust and estate designation TEP . She was named 2017 Industry Thought Leader by Global Finance magazine and was a founding contributor to The GCC Governance Code of the Family Business Council - Gulf .

Avery Tucker Fontaine Head of Strategic Philanthropy

Avery is head of strategic philanthropy for BNY Mellon Wealth Management . In this role, Avery leads philanthropic thought leadership, education and solutions for individuals and families, family offices, endowments and foundations .

With 20 years in the investment and financial services industry, Avery’s experience as a philanthropic consultant focuses on working with families and successful non-profit institutions to improve grant-making efficacy, foundation and endowment management, use of planned giving, social finance and long-term strategic planning .

Avery received a bachelor’s degree from Sewanee: The University of the South with a dual degree in philosophy and fine arts . She later received her MBA in general management (with a focus on social enterprise) from The Fuqua School of Business at Duke University, where she received the Class of 1990 Scholarship (for work in the non-profit sector) and a Dean’s Recognition Award .

BNY Mellon Wealth Management


For over 25 years, the Planned Giving group at BNY Mellon Wealth Management has provided gift and investment support of planned giving programs for non-profit institutions . As a leading wealth management firm, we understand the motivations of donors and the complex philanthropic and estate planning approaches used to preserve wealth while giving back to the community . Leveraging these insights and the broad resources of BNY Mellon, our Planned Giving team offers comprehensive gift management, investment management, and donor and organizational support .

We work with over 100 clients with planned giving programs ranging from $10 million to over $300 million . Our clients include educational institutions and community foundations as well as faith-based, health care, cultural and social service organizations across the U .S .

Gift Management

− Gift Processing− Accounting− Tax Reporting− Fiduciary Services

Investment Management

− Strategic Asset Allocation− Investment Excellence Across Asset Classes− Customized Planned Giving Account Portfolio Construction− Compliance and Risk Monitoring

Donor & Organizational Support

− Education and Training− Gift Metrics and Client Benchmarking− Complex Gift Support− Industry Insights and Best Practices

To learn more about how BNY Mellon Wealth Management’s Planned Giving Group can help, please contact:

George Rio Crystal Thompkins, CAP®, CSPGCM David Hohler, CFAExecutive Director National Director, Gift Planning Services Director of Investments

george .rio@bnymellon .com crystal .thompkins@bnymellon .com david .hohler@bnymellon .com

ABOUT BNY MELLON PLANNED GIVING

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This material is provided for illustrative/educational purposes only . This material is not intended to constitute legal, tax, investment or financial advice . Effort has been made to ensure that the material presented herein is accurate at the time of publication . However, this material is not intended to be a full and exhaustive explanation of the law in any area or of all of the tax, investment or financial options available . The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation . ©2019 The Bank of New York Mellon Corporation . All rights reserved . | M152759

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