TRACY GARY, Founder o f Insp i red Legac ies

andPHIL CUBETA, CLU, ChFC, MSFS, CAP

Sa l l i e B . and Wi l l i am B . Wa l l ace Cha i r in Ph i l anthropy a t The Amer i can Co l l ege

WITH SPECIAL THANKS TO RANDY FOX AT INKNOWVISION

Inspired Planning Case Study

Purpose, Process, Payoff

Purpose: Help you, as fundraiser or advisor, find your place at

the planning table where the big dollars are plannedProcess

Review current state of gift planning Introduce an opportunity on Main Street Present and critique a case study of a Main Street

client Invite your comments

Payoff Happier donors and clients Larger gifts, better plans, and better world

And how to capitalize on them

Trends in Gift Planning

The Future of Gift Planning NCPG Task Force Report 2007

Planned Giving is “eroding” within charities as a specialization.

Number of Planned Giving Specialists is “dwindling.”

PGOs have less control of the process.Information on giving tools is widely

available.Many gifts are being structured by advisors

with no nonprofit involvement.

A Major Shift

“One of the most striking differences between the 2006 and 2008 study is the dramatic increase in donors use of legal and financial professionals to help them make charitable decisions.”

“Nonprofit personnel’s involvement dropped from 41% of cases to 29%.”

Bank of America Survey of 700 High Net Worth Households, 2008

Causes of Present Decline

Donors access information on charitable tools via the internet

Donors get sophisticated planning from advisors

Gift planners have to wear many hats, only one of which is planned giving

High turnover among nonprofit gift plannersNonprofit management is short term focused

and demands immediate resultsDonors prefer more consultative, donor-

centered, or transformational approach

Advisors Not Perfect

2/3 of highly experienced advisors interviewed have limited philanthropic toolboxes, relying on one or two planned giving vehicles

50%+ do not discuss their clients’ personal or social values, or help them develop a philanthropic mission

Overwhelmingly, donors reported it is they who typically raise the philanthropic question

Many donors say savings taxes is important, but that they are weary of the “tax lead”From studies done by The Philanthropic Initiative, 1999-2003

Nonprofit Edge

Bank of America 2008 study of high wealth families:

95.9% instruct children in giving 80% of parents say their children learn about

giving from a religious organizationWhat role does your nonprofit play in raising

flourishing families?

NCPG – Desired Future

“In the future, sophisticated planned giving officers have changed their focus from structure of the gift to impact, becoming more donor centered and holistic in their approach.”

“Planned giving officers are viewed as part of the support team for serving the donor.”

Changing NCPG name to “Partnership for Philanthropic Planning.”

Your Seat at the Planning Table

EXPERT ADVICE

PLANNING

ASK

SELL

CONFIDE

CONFER

From Todd and Scott Fithian: The Right Side of the Table: Where do you Sit in the Minds of the Affluent?

Ste

ps fo

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acy m

en

tors a

nd

le

ad

ers

Are you informed about the evolution of philanthropy?

Will you support your clients & members to lead, or will you follow their lead?

C0

-Cre

atin

g a

Via

ble

Fu

ture

Alig

nm

en

t?

Passion Professionalism

Shared vision: gift planner, donor, nonprofit

Inspire each otherSpark a movementOften rally against

an “other”

Whatever client wants is fine

Do not judgeDo not share

personal passionsProvide a service Work with all

comers if they have money

Balancing Passion and Professionalism

Passion Professionalism

Speaks a language that brings some together in common purpose, but may repel others.

Leads to cultural clash.

Can pander to what is worst in the client.

Can be blind and deaf to what is best in the client.

Can make the market motive the highest motive.

Risks Either Way

An Opportunity on Main Street

The Closely Held Business Market

Opportunity on Main Street

90% of US Firms are family owned64% of GNP33% make it to next generation15% to third generation25% will transfer control over next 5 years40% over 10 years71% have not completed succession plans93% have little income outside business80% want business to stay in familyMany want to leave a legacy and make a difference

Source: David Leibell and Dan Daniels of Wiggin and Dana

Opportunity on Main Street

Are often devoutCommitted to their communityWant to pass values on to heirsDon’t consider themselves philanthropic but are

giversRely on advisors, often on a professional insurance

agent, to drive the planning processHave a CPA and attorneyHave a balance sheet handy to show the bankerApproachable – Doors are open for business daily

What is on Their Minds?

When and how will we exit the business?Will we have enough for us?How much is enough for heirs?How do we transfer assets with minimal tax?What is next for us after we “retire”?“Is that all there is……?” – Peggy Lee

Prudent Plan Inspired plan for Impact

Takes care of selfAnd heirsAnd the money

Preserve it Grow it Reduce tax bite

Has a positive impact on self, heirs, and society

Now, later, at deathBeyond deathGets social results

Inspired Planning

The Fitzsimmons

Via Randy Fox at InKnowVision

Case Study

Facts Goals

Own a business and will sell it over 5 years

Approaching 60Several children and

grandchildrenLive on $90,000 After

taxNet worth: $4.5 – $12

million, depending valuation of business

Financial security85% to charityEnough for kids but

not too muchReduce income and

estate tax

Gerald and Eileen Fitzsimmons

What We Know What was not asked

Started a pre-schoolWant to do

something more for education

Current total giving is $1,300 a year

When they want an impact?

How? (Through what nonprofit?)

With what personal engagement?

With what involvement of heirs?

Philanthropic Info Per Randy Fox

Back Office

Randy Fox for the Financial Advisor

--------------------

Potential Teammates

Phil as “synthesizing generalist”

Tracy as coach, philanthropic expert

--------------------

Your role?

Clients

Planning Team

Financial Advisor

Attorney

CPA

Where We are in the Planning Process per Randy

1) Financial advisor got the facts and the goals2) Family Wealth Diagnostic showed not all

goals being met3) Family Wealth Goal Achiever

1) Iteration #1 has been run2) Further iterations are in process

Download: www.gifthub.org/ppp.html

The fact finder (blank)

The Diagnostic (complete)

The Wealth Achiever (complete)

What is in the plan Your Thoughts

IRA to charity at death

CRT with remainder to charity at death

Charitable Lead Trust starting at death

$10 million of life insurance to heirs at death

What could be added?

Where might you position your organization?

Your next move?

The State of the Case

Tra

cy’s ob

serva

tion

s

Phil’s Observations

Impact? On what cause? (education) When? How? With what nonprofit?

85% to charity? Enough or too much for heirs?

Tracy to Phil and Randy

Nonprofit engagement?Donor networks?Inter-generational communication?Both husband and wife engaged?Coach to keep case moving as they transition

from business to philanthropic engagement?Coach for the kids? Can the family deepen its joy and capacity to

collaborate through family philanthropy?

Phil and Tracy to Randy

What if….. We calculated how much current giving (direct to, say,

a school) they could afford? We got them engaged with the good works now We got the children engaged? We used the life insurance to endow the current

giving? We sparked this family’s potential to co-create? We positioned the advisors as an active and vital

planning team?

How Would Randy React?

Sure Thanks, TracyThanks, PhilLet’s ask the advisorWe can run the numbersWho else should be at the planning table as

we move to planning for near-term impact on education?

Now that there is better family, nonprofit, and advisor communication who else can we help?

Your Thoughts?

The microphone is yours

How Will You Use This?

To advance your careerTo help donors and clientsTo advance the greater good?