demystifying planned giving the cultivation process: ways to engage let’s begin the conversation...
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Demystifying Planned Giving
THE CULTIVATION PROCESS:Ways to Engage
Let’s Begin the Conversation
Clyde W. Kunz, CFRE
Planned Giving Roundtable of Southern Arizona
Strengthening our community by promoting charitable gift planning
Course Objectives
Identify good planned gifts candidates Understand their profile & which types of gifts
likely “match” which donors Generate ideas for cultivating candidates Learn ideas for starting the conversation! Understand ways to used planned gifts
(i.e., for endowment-building) Develop strategies for ongoing
appreciation of planned gift donors
Demystifying Planned Giving 2011
Types of Planned Gifts
Bequests Beneficiary Designations Life income/split interest gifts Pooled Income fund Life Insurance Bargain Sale Gifts of Remainder Interest in a
Residence or Farm– a.k.a. Life EstateDemystifying Planned Giving 2011
Identifying Planned Gift Prospects Those with a multi-year history of giving to your
organization (at least 3 years+)
Those with a multi-year history of volunteerism with your organization
Those whose gifts are small in size, but consistent
Those whose life circumstances dictate changes
Demystifying Planned Giving 2011
Which Gifts for Which Prospect? Bequests (frequency score = 10)
Almost anyone; easiest path; inexpensive Simple to do; Will or codicil to Will Specific amount; percentage of remainder
Beneficiary Designations (FS = 8) Also easy and inexpensive (or no cost)! IRAs or other retirement accounts Life insurance policy Specific amount; percentage of remainder
Demystifying Planned Giving 2011
Which Gifts for Which Prospect? Life Insurance (FS = 5)
Is insurance need still valid? Can make charity both the owner and the
beneficiary of policy (whole life only) Easy; inexpensive
Bargain Sale (FS = 1) Can be complicated Charity needs to have legal counsel May generate UBIT
Demystifying Planned Giving 2011
Which Gifts for Which Prospect? Gifts of Remainder Interest in a Residence
or Farm– a.k.a. Life Estate (FS = 3) Gives donor a HUGE tax deduction in year of
donation Have to think about end-of-life issues
Pooled Income Fund (FS = 1) Similar to a mutual fund for donors Incurs administrative fees; spread over the donor
pool Can benefit higher-end donors to the detriment of
smaller donors.Demystifying Planned Giving 2011
Which Gifts for Which Prospect? Life income/split interest gifts
Charitable Gift Annuities (CGA) (FS = 9) Simple contract Low cost Guarantees income Good place to “park” appreciated assets May require an outside administrator
Demystifying Planned Giving 2011
Which Gifts for Which Prospect? Life income/split interest gifts
Charitable Remainder Trusts (CRT) (FS = 7) Rule of thumb: $200,000+ Give donor more control Good place to “park” appreciated assets Requires legal counsel to set up Requires administration Requires additional tax filing
Demystifying Planned Giving 2011
Which Gifts for Which Prospect? Life income/split interest gifts
Charitable Lead Trusts (FS = 1) Very rare For very large estates ($2M+) Used as a way to pass assets between
generations A good place to “park” appreciated assets Definitely requires legal counsel
Demystifying Planned Giving 2011
PRACTICE!
An elderly couple
Have moderate size investments in highly-appreciated stocks
Do not have sufficient income to meet their monthly needs.
Demystifying Planned Giving 2011
PRACTICE!
A young business professional and her husband
High income, but have a young family
Want to support the organizations on whose boards they both serve, but want the flexibility to modify those gifts if the organizations don’t hold their interest in the long-term
Demystifying Planned Giving 2011
PRACTICE!
A 60-something couple with many assets; do not need additional income; just sold a business for several milllion dollars
Recently moved into their lovely, but smaller “last home”
Children are working professionals; live across the country; have been ‘taken care of’ through assets in the couple’s stock portfolio
Demystifying Planned Giving 2011
PRACTICE!
An elderly couple with many assets; do not need income
Have a developmentally-disabled adult
child for whom they provide care
Demystifying Planned Giving 2011
PRACTICE!
A 50-something board member with a business he wants to donate; business is valued at $1.5 million
Still owes approximately $750,000 on a
mortgage loan on the building in which the business is housed
Plans to focus on his other business, which is where his passion now lies
Demystifying Planned Giving 2011
PRACTICE!
An elderly gentleman with modest assets
Lives comfortably with income from pension fund, social security, and annual distributions from an IRA to which he contributed over many years.
Children are grown and do not need his
financial assistance
Demystifying Planned Giving 2011
Talking About Planned Gifts
Passion for Mission “You have been volunteering with us for so long; I
don’t know what we’ll do when you’re gone!” “We appreciate your gifts to our annual fund so
much; have you ever considered a gift through your estate that might continue to provide support for the X program you care about so much?”
Peer Pressure: “A number of our other volunteers (donors) have chosen to remember the agency through their estate plans. Could I provide you with some information about that as well?”
Demystifying Planned Giving 2011
Talking About Planned Gifts
Creating a Legacy: “Can you give the full names of all 4 of your
grandparents? Your 8 great-grandparents?” “Who’s going to miss you when you’re gone?” “After you’ve taken care of your family’s needs,
would you consider…….?” When you die, everything you have accumulated
in your life will go one of three places: Your family - The government - Charities you care
about Pick any two!
Demystifying Planned Giving 2011
How Planned Gifts Are Used
As Part of a Campaign Make sure that using planned gifts for that
purpose is approved Consider “adding” a planned gift option to a
campaign as a way to broaden participation
To Build Endowment Donors may assume their gift goes to
endowment Make sure they understand how to restrict their
giftDemystifying Planned Giving 2011
Donor Giving Options
Donor
Cash Assets
Restricted (endowment)
UnrestrictedUnrestricted
Deferred/
planned
Deferred/
plannedCurrent Current
Demystifying Planned Giving 2011
Recognizing Planned Gifts
Donor Recognition “Club” or “Society” Annual or semi-annual event Program book listing / donor wall listing
Ongoing Planned Giving Information Planned giving newsletters Seminars / speakers
Other Lapel pin, desk set, etc.
Demystifying Planned Giving 2011
