fundraising from america: a guide planned giving programs

Fundraising from America:

Planned Giving Programs

Presented by Nancy Bikson

Chapel & York Limited

- What is Planned Giving and why it is important?

- Types of Planned Gifts

- Bequests

- Life Income Gifts

- Charitable Lead & Annuity Trusts

- Who Makes Planned Gifts?

- When is the right time to establish a program?

- Board’s Role in Planned Giving

- Steps to Success

- Review

- Q&A

Fundraising from America: Planned Giving Programs

Today we will be covering…

Planned Giving…

- Sometimes referred to as gift planning.

- A method of supporting non-profits and charities that enables

philanthropic individuals or donors to make larger gifts than they could

make from their income.

- While some planned gifts provide a life-long income to the donor, others

use estate and tax planning techniques to provide for charity and other

heirs in ways that maximize the gift and/or minimize its impact on the

donor's estate.

What is planned giving and why is it important?


Whether a donor uses cash, appreciated securities/stock,

real estate, artwork, partnership interests, personal property,

life insurance, a retirement plan, etc., the benefits of funding

a planned gift can make this type of charitable giving very

attractive to both donor and charity.

What is planned giving and why is it important?


Giving USA

45.74 (15%)

23.41 (7%)

18.15 (6%)

228.93(72%)

Foundations

Bequests

Corporations

Individuals

2013 Contributions: $316.23 billion by source of

contributions (in billions of dollars - all figures are

rounded) Source: Giving USA Foundation™


Bequests:

In the US, Testamentary Bequest is the technical term for a gift left in a

Will. It may also be called a Bequest or Legacy. 501(c)(3)s can accept

Testamentary Bequests which are tax-deductible for estate tax

purposes. Bequests can also be made to non-US charities.

Donors can leave 501(c)(3) non-profit organizations money, stock,

bonds and other securities, and any other tangible property, for

example works of art, collections, real estate, personal items,

memorabilia and intellectual property rights.

Types of Planned Gifts: Bequests


Bequests can take several forms such as:

Specific bequest - a certain amount of cash, securities, or property.

General bequest - property that is similar to all other items distributed,

usually cash.

Percentage bequest - a stated percentage of the donor's estate.

Residual bequest - all or a portion of what remains of the estate after

specific and general bequests are distributed.

In many cases it is necessary to obtain professional evaluation, and in

some cases it is necessary to have this valuation agreed by the IRS.



Bequests are Key!

- More than 80% of planned giving dollars come from bequests.

- REMEMBER: bequests are REVOCABLE - donors must receive

appropriate stewardship so they don’t change their Will!

- Those who make bequests will probably change their plan several

times. You need to be in the final Will.



Life Income Gifts:

A life income gift allows a donor to give assets to the non-profit while

providing a donor or others with income for a period of time before the

non-profit is permitted to use a donor gift. A donor may make a life

income gift by transferring securities, cash, or other property to the

non-profit or a trustee. The trustee then manages the investment of the

assets and pays an income to a donor, a donor designated

beneficiaries, or both. Income payments continue for the beneficiaries'

lives or, in some cases, for a term of up to 20 years.

Types of Planned Gifts: Life Income Gifts


There are several kinds of life income gifts available:

Charitable Gift AnnuityIn exchange for an outright gift, the non-profit agrees by contract to pay a fixed amount each

year to a donor and/or another beneficiary for life.

Charitable Remainder UnitrustA donor establish a trust from which a donor and/or other beneficiaries receive variable annual

payments for life and/or a term of years. At the end of the term, the remainder of the trust

assets go to the non-profit for the purposes a donor designate.

Charitable Remainder Annuity TrustA donor establish a trust from which a donor and/or other beneficiaries receive annual

payments of a fixed dollar amount for life and/or a term of years, after which the

remainder of the trust assets pass to the non-profit for the purposes a donor

designate.

Types of Planned Gifts: Life Income Gifts


Charitable Lead Trusts:

A charitable lead trust is a philanthropic and estate planning tool. A donor can

transfer assets, such as cash, stocks and artwork, to a trust for a set term of years.

Each year, payments are made from the trust to the donor's designated

charity/charities.

It is called a lead trust because the charity/charities is/are entitled to the lead (or first)

interest in the trust asset, and the non-charitable beneficiary receives the remainder

(or second-in-line) interest.

Once the trust's term expires, what is left goes to the donor's heirs. Handling assets

in this way can shelter the assets' appreciation from estate taxes.

Types of Planned Gifts: Charitable Lead Trusts


Two Types of Charitable Lead Trusts

Charitable lead trusts are of two types: charitable lead annuity trusts and

charitable lead unitrusts. In the first type, the donor sets a fixed annual

gift for the charities named. In the unitrust, the charities receive a

percentage of the trust's value each year. This means that those benefits

will fluctuate based on the trust's investment returns or losses.

Annuity trusts are the most popular because the charitable payments are

fixed. In the unitrust assets grow and the percentage going to charity

uses up more and more money, thus leaving less for the heirs.

Types of Planned Gifts: Charitable Lead Trusts


People at all income levels leave charitable gifts, although those earning

$100,000+ are more likely.

Consistent donors, Current and former board members, current and former

volunteers, staff members.

Education makes a difference:

- 40% of those who finish high school include a charity in their will.

- People with a college degree are 22% more likely to leave a planned gift to

charity.

- People with post-college education are 47& more likely to leave a planned gift to

charity.

People will religious affiliations are more likely to make a charitable bequest.

Who Makes Planned Gifts?


Single people, widows/widowers, couples without children. Married woman

least likely to leave charitable gift.

Basic profile of a bequest maker:

- Single

- Highly educated

- Attends religious services

- Earns more than $100,000K

Who Makes Planned Gifts?


Establishing a program is easy.

Promoting can be very basic through your website and

communications with donors.

Promoting it amongst the Development Team working with

the 501(c)(3) is imperative

Follow up is crucial.

When is the right time to establish a program?


In a typical US charity, this is what the Board would be requested to do.

Your Board may do less...

- Making a planned gift themselves

- Help to identify prospects

- Cultivating and soliciting gifts

- Opening doors by introducing staff members

- Hosting events

- Offering testimonials in marketing materials

- Learning how to respond when donor / prospect brings up possibility of a

planned gift

- Scheduling meetings with professional advisors

- Presenting a proposal

- Once gift is made, remaining involved in donor

Board’s Role in Planned Giving


- Develop a Case Statement. Clearly define needs and ways to give.

- Prepare planned giving policies.

- What types of gifts accepted

- What programs will gifts fund

- How will funds be invested

- Provide staff training.

- Create a professional advisory committee.

- Identify prospects.

- Donors who have given $25+ for three or more years running

- Donors who are 65 and older

- Donors who have given $1,000+ one off donations

- FLAG: frequency, longevity, age, gender

- Others without children who can be cultivated

Planned Giving: Steps to Success (1/2)


- Establish legacy society for donor recognition.

- Hold training sessions for your board.

- Outline what planned giving is

- Provide a profile of planned giving prospects

- Describe how planned giving fits into development picture

- Make personal visits to donors and prospects.

- Market your planned giving program.

- Create brochure and legacy society / ways to give

- Include testimonials in your newsletter

- Recognize donors in publications

- Provide sample wording for a bequest

- Create a direct mail / e-blast for planned giving to targeted prospects

- Add info about it to your website.

Planned Giving: Steps to Success (2/2)


A summary of today’s webinar:

- Planned giving is a huge opportunity for non-profits.

Approximately 27billion given annually through

bequests and that only currently accounts for 7%

of total US Giving.

- People at all income levels make planned gifts. However an ideal

profile would be: Single, Highly educated, Attends religious services.

Earns more than $100,000K

- Current donors are best planned-giving prospects.

- Bequests are key. More than 80% of planned giving dollars come from

bequests.

- Bequests require proper stewardship; most people change their estate plans

several times


This information was not intended to be legal advice. It is advised that you consult your own legal expert in regard to your specific situation.

that’s it!

for listening.

fundraising from america: a guide planned giving programs

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