Planned Giving E-Book

Ronald R. Jordan

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Nonprofit Law, Finance, and Management Series
• Sprache: Englisch

Seitenzahl: 1490

Veröffentlichungsjahr: 2009

Beschreibung

Completely revised and updated, the Fourth Edition of this popular resource recognizes the emerging importance of planned giving and the changes that have taken place over the last few years. The new edition now includes a convenient, easy-to-use CD-ROM filled with exhibits, documents, and forms. With a new focus on user-friendly content and helpful insights, tips, warnings, and perspectives, the new edition empowers fundraising professionals with the ability to speak the same language as donors and their advisors, while still keeping their own organization's goals in mind. Note: CD-ROM/DVD and other supplementary materials are not included as part of eBook file.

Leseprobe

Table of Contents

Title Page

Copyright Page

About the Authors

Preface

Acknowledgements

PART I - Planned Gifts

CHAPTER 1 - What Is Planned Giving?

1.1 Getting Started

1.2 Introduction

1.3 Planned Giving from the Donor’s Perspective

1.4 Planned Giving from the Organization’s Perspective

1.5 Planned Giving from Management’s Perspective

1.6 A Focus on the Future

1.7 Cost Benefit Analysis

1.8 Planned Giving and Annual Giving: Partners

1.9 Perspectives for Success: Leadership, Resources, and Staffing

1.10 Planned Gifts Now and in the Future

1.11 The New Planned Giving Donor

1.12 The Young Planned Giving Donor

1.13 Planned Giving in a Development Office

1.14 Conclusion

CHAPTER 2 - Charitable Gift Annuities and Deferred Gift Annuities

2.1 Introduction

2.2 Charitable Gift Annuities

2.3 State Regulation of Gift Annuities

2.4 Charitable Deferred Gift Annuities

2.5 Marketing the Deferred Gift Annuity

2.6 Administration

CHAPTER 3 - Pooled Income Funds

3.1 Pooled Income Funds (PIFs)

CHAPTER 4 - Trusts

4.1 Introduction

4.2 Parties to a Trust

4.3 Transferring Title to the Trust Corpus

4.4 Trust Powers

4.5 Revocable Inter Vivos Trust (Living Trust)

4.6 Irrevocable Trusts

4.7 Charitable Remainder Trusts

4.8 Charitable Lead Trusts

4.9 Tax Consequences

CHAPTER 5 - Endowed Funds

5.1 Introduction

5.2 Endowed Naming Opportunities

5.3 Creating an Endowed Fund

5.4 Umbrella Funds

5.5 Scholarship Funds

5.6 Funding Endowed Funds

5.7 Current-Use Awards

5.8 The Fund Description

5.9 The Mechanics of a Fund Description

5.10 Endowed Chairs

5.11 Benefits to the Holder of the Chair and the Charitable Organization

5.12 Profile of a Donor Who Creates a Chair

5.13 Cost to the Donor

5.14 How Charities Invest Funds for Chairs

5.15 Working with Faculty/Staff to Create a Chair

5.16 Types of Chairs

5.17 Individual versus Multiple Donors to Fund a Chair

5.18 Ways to Fund a Chair

5.19 The Internal Process

5.20 Drafting the Terms of the Chair

5.21 Recognition

CHAPTER 6 - Bequests and The Bequest Society

6.1 Introduction

6.2 The Will

6.3 Suggested Language

6.4 Standard Bequest Forms

6.5 Legally Binding Documents for Bequests

6.6 Targeting Donors for Bequests

6.7 Marketing Bequests

6.8 Crediting Bequests

6.9 Recognition Events

6.10 Administering a Nonprofit Bequest Program

6.11 Guide to the Probate Process

6.12 The Planned Giving Office and Bequest Administration

6.13 Typical Problems Encountered with Bequests

6.14 Distribution within the Charity

6.15 Facilitating Bequest Administration: Working with Donors Today

6.16 Conclusion

PART II - Assets Involved with Planned Giving

CHAPTER 7 - Gifts of Securities

7.1 Introduction

7.2 Securities Held by the Donor’s Stockbroker or Banker

7.3 Securities Held in the Donor’s Possession

7.4 The Value of the Gift

7.5 The Date of the Gift

7.6 The Donor’s Charitable Income Tax Deduction

7.7 Gifts of Shares of a Mutual Fund

7.8 Closely Held Stock

CHAPTER 8 - Gifts of Real Estate

8.1 Introduction

8.2 Elements Affecting Gifts of Real Estate

8.3 Factors Affecting Value and Marketability of Real Estate

8.4 Tax Consequences of Gifts of Real Estate

8.5 Working Out the Arrangements

8.6 Outright Gift of Entire Property or Fractional Interest

8.7 Denial of Charitable Income Tax Deduction for a Gift of a Use of Property

8.8 Gifts of Real Estate with a Retained Life Estate

8.9 Gifts of Real Estate to Charitable Remainder Trusts

8.10 Gifts of Real Estate to Fund Charitable Gift Annuities

8.11 Gifts of Real Estate to Pooled Income Funds

8.12 Gifts of Mortgaged Property

8.13 Gifts of Conservation Easements

8.14 Benefits to Donors

8.15 Partial Interest Rules

8.16 Qualified Donee Organizations

8.17 Conservation Purposes

8.18 Qualified Real Property Interests

8.19 Tax Consequences

8.20 Valuation

8.21 Conclusion

CHAPTER 9 - Gifts of Tangible Personal Property

9.1 Introduction

9.2 Overview

9.3 Gifts of Tangible Personal Property to Planned Giving Vehicles

9.4 Substantiation Requirements

9.5 Appraisals

9.6 The Gift Review Committee

9.7 Gifts of Major Collections

9.8 Identifying Prospects

9.9 Donor Concerns

9.10 Nonprofit Issues

9.11 Departmental Assistance

9.12 Deaccessioning

9.13 Evaluating the Gift

9.14 Unacceptable Collections

9.15 The Curation Agreement

9.16 Tax Considerations

9.17 Loaned Collections

9.18 Conclusion

CHAPTER 10 - Gifts of Life Insurance

10.1 Introduction

10.2 Definitions

10.3 Life Insurance Agents and Planned Giving

10.4 Ways to Use Life Insurance to Promote Major Gifts

10.5 Policy Dividends

10.6 Short-Term Endowment Policies

10.7 Student Life Insurance Programs

10.8 Insurance Used in Asset Replacement Trusts

10.9 Funding a Charitable Remainder Net Income Unitrust/Flip Trust with Life Insurance

10.10 Guidelines for the Planned Giving Officer

10.11 Conclusion

CHAPTER 11 - Retirement Planning and Planned Giving

11.1 Introduction

11.2 Gifts of Retirement Plan Assets: IRA Charitable Rollovers Extended

11.3 Tax Consequences of Charitable Gifts of Retirement Accounts at Death

11.4 Types of Retirement Plans

11.5 Ways to Transfer Retirement Assets to a Nonprofit

11.6 Summary

PART III - Planned Giving’s Financial Impact

CHAPTER 12 - The Tax Consequences of Charitable Gifts

12.1 Introduction

12.2 Income Taxes

12.3 Fair Market Value

12.4 The Cost Basis

12.5 Deductibility of Gifts of Tangible Personal Property

12.6 Acceleration of Deduction

12.7 Deduction Reduction Provision

12.8 Pledge and Promissory Note

12.9 Deductions and Recognition for Out-of-Pocket Expenses and Gifts of Services

12.10 The Ordinary Income Reduction Rule

12.11 Income in Respect of a Decedent

12.12 Deductibility of Charitable Contributions for Business Organizations

12.13 Depreciation

12.14 Capital Gains Taxes

12.15 Federal Estate and Gift Taxes

12.16 Gift Tax Annual Exclusion

12.17 Payments for Tuition and Medical Bills

12.18 Gifts by Husband and Wife—the Unlimited Marital Deduction

12.19 Streams of Income and Gift Tax Consequences

12.20 Sale of a Personal Residence

12.21 Gifts of Real Estate Subject to a Mortgage

12.22 Tax Implications of a Bargain Sale

12.23 Partial Interests

12.24 Conclusion

CHAPTER 13 - Estate Planning and Planned Giving

13.1 Introduction

13.2 Related Disciplines

13.3 Intestacy

13.4 The Will: A Road Map

13.5 Parts of a Will

13.6 Coordinating Title to Property with the Estate Plan

13.7 Planning Considerations: Per Stirpes versus Per Capita

13.8 Probate

13.9 Power of Attorney and Durable Power of Attorney

13.10 Health Proxies and Living Wills

13.11 Talking with a Prospect about Estate Planning and Wealth

13.12 Conclusion

CHAPTER 14 - Financial Planning for the Development Professional

14.1 Introduction

14.2 Achieving Financial Objectives through Charitable Giving

14.3 Risk-and-Reward Theory

14.4 Evaluation of Investment Alternatives

14.5 Cash Investments

14.6 Stocks

14.7 Income Investments

14.8 Mutual Funds

14.9 Real Estate

14.10 Portfolio Management and Planning

14.11 Conclusion

PART IV - Planned Giving Programs on Location

CHAPTER 15 - What Charities Can Learn about Fundraising and Planned Giving ...

15.1 Introduction

15.2 Faith-Based and Religious Organizations

15.3 Hospitals and Healthcare Organizations

15.4 Educational Institutions

15.5 Political Fundraising

15.6 Community and Civic Organizations

15.7 Arts and Cultural Organizations/Aquariums and Zoos

15.8 Single-Illness Organizations

15.9 Social Service/Humanitarian Organizations

15.10 Conclusion

CHAPTER 16 - Planned Giving in a Small or One-Person Organization

16.1 Introduction

16.2 Education

16.3 Support Network and Administration

16.4 Legal Issues

16.5 Use of a Consultant

16.6 Management Plan

16.7 Establishment of Gift Vehicles

16.8 Marketing

16.9 Identifying and Soliciting Planned Giving Prospects

16.10 Stewardship

16.11 Creating or Restructuring Financial Support Areas

16.12 Software

16.13 Gift Crediting

16.14 Conclusion

CHAPTER 17 - Planned Giving at Educational Institutions

17.1 Introduction

17.2 Types of Educational Institutions

17.3 Centralized and Decentralized Programs

17.4 Alumni: Ownership Issues at Educational Institutions

17.5 The Planned Giving Officer: Fundraiser or Consultant?

17.6 Preventing Conflicts: Working with Development Staff

17.7 Developing Internal Relationships

17.8 Constituents

17.9 Managing Constituents

17.10 Planned Giving Program Activities

17.11 Gift Opportunities

17.12 Conclusion

CHAPTER 18 - Planned Giving in Healthcare Organizations

18.1 Introduction

18.2 The Hospital Environment

18.3 The Players

18.4 The Patients

18.5 Staffing the Development Office

18.6 Priorities and Expectations

18.7 Grateful Patients

18.8 Working the Gift through the Organization

18.9 An In-Depth Look at Planned Giving in a Healthcare Setting

18.10 Soliciting Patients Who Are Donors

18.11 Working with the Donor’s Physician

18.12 From the Donor’s Perspective

18.13 Working with a Patient’s Outside Advisor to Complete the Gift

18.14 Working with a Relative or Guardian to Make a Gift

18.15 Patients with Terminal Illnesses, Including AIDS

18.16 Stewardship

18.17 Conclusion

CHAPTER 19 - Planned Giving in Large, Established Arts Organizations

19.1 Introduction

19.2 Donor Profile

19.3 Relationship Building

19.4 Gifts-in-Kind

19.5 Tax Deductibility

19.6 Form 8283

19.7 Use of Planned Giving Vehicles

19.8 Marketing

19.9 Boards and Volunteers

19.10 Special Challenges Unique to Arts Organizations

19.11 Conclusion

PART V - Managing Donors and Prospects

CHAPTER 20 - The Planned Giving Prospect

20.1 Introduction

20.2 Motivations

20.3 Profile of a Planned Giving Prospect

20.4 Finding the Planned Giving Prospect

20.5 Working with the Planned Giving Prospect

20.6 Conclusion

CHAPTER 21 - Refocusing on Philanthropy

21.1 Introduction

21.2 Fundraising from the Nonprofit’s Perspective: Development, Advancement, or Philanthropy?

21.3 Changing the Focus to Philanthropy

21.4 Activating Donors

21.5 Getting Started

21.6 Strategies to Promote Philanthropy

21.7 Opportunities for All Types of Charities

21.8 Conclusion

CHAPTER 22 - Working with Donors

22.1 Introduction

22.2 A Planned Giving Office as a Service Center

22.3 Management

22.4 Educating Donors

CHAPTER 23 - Women as Planned Giving Donors

23.1 Introduction

23.2 Gender-Based Differences in Giving

23.3 Women’s Access to Wealth

23.4 Financial Challenges for Women

23.5 Types of Donors

23.6 Motivations for Giving

23.7 Gift Planning Implications

23.8 Types of Planned Gifts to Consider for the Female Donor

23.9 Women and Children: Their Philanthropy

23.10 Working with Advisors

23.11 Conclusion

CHAPTER 24 - Family Philanthropy: Issues and Solutions

24.1 Introduction

24.2 Role of the Planned Giving Officer

24.3 Before Meeting with the Donor

24.4 Families in Sync/Harmony

24.5 Families Out of Sync/Harmony

24.6 Donors without Children

24.7 Positive Outcomes for Children from Family Philanthropy

24.8 Tools for Continuing and Maintaining Family Philanthropy

24.9 Gift Options for Family Philanthropy

24.10 Conclusion

CHAPTER 25 - Solicitation Strategies

25.1 Introduction

25.2 The Planned Giving Officer’s Mindset

25.3 Preparation

25.4 The Planned Giving Participants

25.5 The Donor

25.6 Types of Solicitations

25.7 The Solicitation Process

25.8 The Size of the Gift

25.9 Negotiations

25.10 Follow-up

CHAPTER 26 - When to Walk Away

26.1 Introduction

26.2 Types of Problematic Gift Situations

26.3 Warning Signs

26.4 Potential Remedies

26.5 Knowing When to Walk Away

26.6 Keeping the Door Open

26.7 Conclusion

CHAPTER 27 - Fundraising Etiquette: Do’s and Don’ts for Successful Business ...

27.1 Introduction

27.2 Working a Room

27.3 When It Is Time to Move On

27.4 Telephone Etiquette

27.5 E-Mail Etiquette

27.6 Issues/Complaints

27.7 The Difficult Donor

27.8 Donor Visits

27.9 Restaurant Protocol

27.10 Overnight Stays at Donor’s Home

27.11 Social Invitations

27.12 Visiting a Donor in the Hospital

27.13 Planned Giving Officer as a Third Wheel

27.14 Family Squabbles

27.15 In Summary

27.16 Conclusion

CHAPTER 28 - Negotiating the Gift of a Lifetime

28.1 Introduction

28.2 Definition

28.3 Marketing

28.4 Preparation

28.5 Capacity

28.6 Qualifying Prospects

28.7 Propensity

28.8 Triggers

28.9 Working the Gift Through the Nonprofit Organization

28.10 Dealing with the Donor

28.11 Charitable Giving and Family Dynamics

28.12 Dealing with a Donor’s Advisors and Family

28.13 Funding

28.14 Terms of the Gift

28.15 Conclusion

CHAPTER 29 - Donor’s Remorse

29.1 Introduction

29.2 What Is Donor’s Remorse?

29.3 Causes of Donor’s Remorse

29.4 Preventing Donor’s Remorse

29.5 The Charity’s Response

29.6 Legal Considerations

29.7 Conclusion

CHAPTER 30 - Combating Donor Fatigue and Overcoming Organizational Complacency

30.1 Introduction

30.2 Recognizing the Symptoms

30.3 Donor Disconnects

30.4 Fixing the Problem

30.5 Treating the Symptoms

30.6 Make the Charity Stand Out/Distinguish the Charity from Others

30.7 The Role of Planned Giving

30.8 Conclusion

PART VI - MANAGING A PLANNED GIVING PROGRAM

CHAPTER 31 - Inside the Development Office

31.1 Introduction

31.2 Annual Giving

31.3 Major Gifts

31.4 Foundations and Corporations

31.5 Stewardship

31.6 Prospect Management

31.7 Information Systems and Computer Operations

31.8 Gift Reporting and Processing

31.9 Research

31.10 Communications and Public Affairs

31.11 Alumni Relations

31.12 Conclusion

CHAPTER 32 - An Operational Plan for a Planned Giving Program

32.1 Introduction

32.2 Perspective

32.3 Purpose of the Planned Giving Program

32.4 Goals of the Program

32.5 Donor Contact

32.6 Identify New Prospects and Solicit Existing Planned Giving Prospects

32.7 Establish a Strong Marketing Communications Effort to Promote Planned Gifts

32.8 Raise the Visibility of the Planned Giving Program Internally and Externally

32.9 Restructure Support Areas to Provide Services for the Planned Giving Program

32.10 Inventory Existing Planned Giving Totals

32.11 Planned Giving Database

32.12 Planned Giving Budget

32.13 Conclusion

CHAPTER 33 - Working as a Successful Planned Giving Officer to Raise ...

33.1 Introduction

33.2 Types of Roles for the Planned Giving Officer

33.3 Attributes of a Successful Planned Giving Officer

33.4 Top-10 List for Closing Large Planned Gifts: How to Work with Planned ...

33.5 Conclusion

CHAPTER 34 - Planned Giving and Major Gifts

34.1 Introduction

34.2 Definition

34.3 Planned Giving and Major Gift Profiles

34.4 Identifying Major Gift and Planned Giving Prospects

34.5 Mobilizing the Nonprofit Organization to Produce Planned and Major Gifts

CHAPTER 35 - Hiring Staff

35.1 Introduction

35.2 The Changing Marketplace

35.3 Attributes of Successful Planned Giving Professionals

35.4 The Process of Hiring a Planned Giving Officer

35.5 The Planned Giving Assistant

CHAPTER 36 - Increased Management Responsibilities in the Development Office

36.1 Introduction

36.2 New Skills, Abilities, and Thought Processes

36.3 Is the New Position a Good Match?

36.4 Advance Preparation

36.5 Transferable Skills: Motivation, Team Building, and Stewardship

36.6 Working with a Management Consultant

36.7 Establish Mutual Expectations with the Consultant

36.8 Conclusion

CHAPTER 37 - Managing Time in Planned Giving

37.1 Introduction

37.2 Getting Organized

37.3 Control the Office Environment

37.4 Meetings

37.5 Travel Time

37.6 Working at Home

37.7 Technology

37.8 General Tips for Saving Time

37.9 Conclusion

CHAPTER 38 - Leadership and Management for a Development Team

38.1 Introduction

38.2 Characteristics of Successful Leaders and Managers

38.3 Leadership in a Development Office

38.4 Leadership Rules to Live By

38.5 Tools to Help Manage

38.6 Educational Methods for Becoming a Better Manager

38.7 Conclusion

PART VII - MANAGING OUTSIDE THE OFFICE

CHAPTER 39 - Mobilizing the Nonprofit’s Leadership

39.1 Introduction

39.2 Vice President for Development

39.3 President or Chief Executive Officer of the Organization

39.4 Role of the Board of Trustees

39.5 Development Staff

39.7 Volunteer Fundraisers: Doctors and Deans

39.8 Supporting Offices within the Organization

39.9 Planned Giving Training Program

39.10 Conclusion

CHAPTER 40 - Creating a Volunteer Society for a Development and Planned ...

40.1 Introduction

40.2 Rationale for Creation of a President’s Society

40.3 Defining the President’s Society

40.4 Benefits of Creating a Volunteer Society

40.5 Goals

40.6 Modeling the Organization

40.7 The Chairperson

40.8 Profile of the Society

40.9 The Recruitment Process

40.10 Subcommittees

40.11 Creating a President’s Society Fund

40.12 Role of the Chief Development Officer

40.13 Timeline for Creation

40.14 Challenges

40.15 Conclusion

CHAPTER 41 - Working with Nondevelopment Staff

41.1 Introduction

41.2 Putting Development into Context for Nondevelopment Staff

41.3 Collaborative Efforts

41.4 Development Communications

41.5 Evaluation and Assessment

41.6 Identification of Development Constituents

41.7 Cultivation of Constituents

41.8 The Solicitation

41.9 Raising Funds from Individuals

41.10 Raising Donors’ Sights

41.11 After the Gift—Stewardship

41.12 Dealing with the Downside

41.13 Conclusion

PART VIII - Evaluating Performance

CHAPTER 42 - Evaluating a Planned Giving Program

42.1 Introduction

42.2 Analyze and Assess

42.3 Take Inventory

42.4 Establishing Programmatic Goals

42.5 Identifying Planned Giving Donors and Prospects

42.6 Administration

42.7 Evaluation of Staff Functions

42.8 Marketing

42.9 Staffing

42.10 Technology

42.11 Budget/Education

42.12 Policies/Procedures

42.13 Stewardship

42.14 Outside Support

CHAPTER 43 - Measuring Performance for Planned and Major Gift Staff

43.1 Introduction

43.2 Reaching Goals and Objectives

43.3 Moves Management

43.4 Other Moves Related to Securing the Gift

43.5 Additional Ways to Reach Goals and Objectives Exclusively for Planned ...

43.6 Team Consideration

43.7 Frequency of Accountability and Tracking Prospects

PART IX - Marketing

CHAPTER 44 - Drafting Planned Giving Documents

44.1 Introduction

44.3 Communicate a Message for a Purpose

44.4 Know the Audience and Be Responsive to It

44.5 Use Outlining

44.6 Develop a First Draft

44.7 Bring Others into the Process

44.8 Manage Documents to Meet Deadlines

44.9 Design an Effective Document

44.10 Take Advantage of Desktop Publishing

44.11 Use Language Correctly and Effectively

44.12 Recipe for a Document

44.13 Conclusion

CHAPTER 45 - Printed Materials and Publications for Donors and Prospects

45.1 Introduction

45.2 Marketing Fundamentals

45.3 The Case Statement

45.4 Guide to Charitable Gift Planning

45.5 Response Form

45.6 Newsletters

45.7 Columns in Nonprofit Publications

45.8 Planned Giving Advertisements

45.9 Buckslips

45.10 Testimonial Advertisements

45.11 Letters

45.12 Pieces in Local Newspapers

45.13 Conclusion

CHAPTER 46 - Marketing the Noneconomic Benefits of Philanthropy

46.1 Introduction

46.2 The Changing Financial and Tax Climates

46.3 Noneconomic Benefits

46.4 Articulating the Noneconomic Benefits

46.5 Enrichment Brochure

46.6 Enrichment Programs

46.7 Enrichment Brochure Illustrations

46.8 Disseminating Enrichment Brochures

46.9 Conclusion

CHAPTER 47 - Making Planned Giving Presentations

47.1 Presentations

CHAPTER 48 - Marketing Planned Giving to Professional Advisors

48.1 Introduction

48.2 Ways to Begin

48.3 Planned Giving Presentations for Outside Audiences

48.4 Mailings to Professional Advisors

48.5 Publication in a Trade Paper

48.6 Technical Outreach Program

48.7 Nontechnical Outreach Program

48.8 Ambassador Program

48.9 Planned Giving Manual

48.10 The Professional Advisory Committee

48.11 Establishing a Professional Advisory Committee

48.12 Purpose of the Committee

48.13 What to Expect

48.14 Conclusion

PART X - Policies and Procedures

CHAPTER 49 - Gift Acceptance Policies

49.1 Introduction

49.2 Cash

49.3 Securities

49.4 Life Income Gifts

49.5 Bequests

49.6 Gifts of Tangible Personal Property

49.7 Gifts of Real Estate

49.8 Life Insurance

49.9 Naming Opportunities

49.10 Administrative Issues

49.11 Ethics

CHAPTER 50 - Nonprofit Organizations: Development Practices and Problems

50.1 Introduction

50.2 Symptoms of Disinterest

50.3 Incident Report

50.4 Acknowledgments

50.5 Accounting/Payments to Donor/Beneficiary

50.6 Inclusion in Charity Events

50.7 Donor-Initiated Proposals

50.8 Gift Agreements

50.9 Prospect Control/Prospect Management

50.10 Stewardship

50.11 Insulation and Isolation

50.12 Conclusion

CHAPTER 51 - Policies and Procedures for Naming Opportunities

51.1 Introduction

51.2 Polices and Procedures

51.3 Naming Committee

51.4 Pricing Naming Opportunities

51.5 Background Check

51.6 Conclusion

CHAPTER 52 - Nonprofit Investment Policies and Procedures

52.1 Introduction: Nonprofit Investment in Context for Planned Giving Officers

52.2 Nonprofit Investment Issues

52.3 Endowment Management

52.4 Investment Strategies

52.5 Portfolios for Planned Giving Options

52.6 Donor Relations

52.7 Investment Guidelines

52.8 Conclusion

CHAPTER 53 - Raising the Bar: Increasing Endowed Fund Minimums

53.1 Introduction

53.2 Assessing the Charity’s Current Minimums for Endowed Funds

53.3 Pegging the Minimum Based on a Good or Service/Formulaic Approaches

53.4 Setting Realistic Minimums

53.5 Escalator Provisions

53.6 Selling the Concept

53.7 Political Fallout—Impact on Prior Gift Agreements and Prior Relationships

53.8 Conclusion

PART XI - Planned Giving in Context

CHAPTER 54 - Ethics and Planned Giving

54.1 Introduction

54.2 Donor Rights and Nonprofit Responsibilities

54.3 Truth in Philanthropy

54.4 Donor Rights

54.5 Nonprofit Responsibilities

54.6 Donor’s Representatives

54.7 Payment of Professional Advisors’ and Lawyers’ Fees

54.8 Prior Existing Agreements

54.9 Fiduciary Role of the Nonprofit

54.10 Ethics in Marketing

54.11 Planned Giving Officer as Salesperson

54.12 Ethical Dilemmas in Relation to Other Development Officers

54.13 Model Standards of Practice for the Charitable Gift Planner

54.14 Conclusion

CHAPTER 55 - Planned Giving and Capital Campaigns

55.1 Introduction

55.2 Campaign Counsel

55.3 Advantages of Entering a Major Campaign

55.4 Disadvantages of Entering a Campaign

55.5 Types of Capital Campaigns

55.6 The Nucleus Fund

55.7 Types of Campaign Gifts

55.8 Planned Giving Training

55.9 Professional Advisors

55.10 Planned Giving and the Case Statement

55.11 Conclusion

CHAPTER 56 - Stewardship and Planned Gifts

56.1 Introduction

56.2 Create a Stewardship Plan

56.3 Gift Acknowledgment

56.4 Gift Administration

56.5 Donor Recognition

56.6 Continued Cultivation and Solicitation for Additional Gifts

56.7 Endowed Funds

56.8 Conclusion

CHAPTER 57 - Institutionally Related Foundations

57.1 Introduction

57.2 Benefits of Institutionally Related Foundations

57.3 Considerations in Establishing a Foundation

57.4 The Charity and the Foundation

57.5 The Foundation’s Organizational Framework

57.6 Committees and Their Functions

57.7 Fundraising

57.8 Managing and Investing Assets

57.9 Conclusion

CHAPTER 58 - Outside Asset Managers: Policies and Procedures

58.1 Introduction

58.2 When to Hire an Outside Asset Manager

58.3 What the Asset Manager Can Bring to the Planned Giving Program

58.4 Selecting the Asset Manager

58.5 From the Asset Manager: What the Planned Giving Program Wants and Needs

58.6 Responsibilities of the Outside Asset Manager

58.7 Conversion from In-House to Outside Manager

58.8 The Nonprofit and Outside Manager Relationship

58.9 Recurring Issues

58.10 Evaluating the Relationship

58.11 Conclusion

CHAPTER 59 - Funding the Cost of Charity

59.1 Introduction

59.2 Impact on the Charity

59.3 Impact on Development Staff

59.4 Impact on the Donor Base

59.5 Donors Likely to Sympathize with Charity’s Predicament

59.6 Insiders

59.7 Increasing the Management Fee on Endowed Funds

59.8 Surcharges

59.9 Traditional Giving Patterns

59.10 Restricted Gifts, Planned Gifts, and Life Income Gifts

59.11 Implications on Minimum Gift Thresholds

59.12 Implications on Planned Gift Options

59.13 Campaign Gifts and Surcharges

59.14 Disclosure

59.15 Making the Case

59.16 Conclusion

APPENDIX - CD-ROM Documentation

Index

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Library of Congress Cataloging-in-Publication Data:

Jordan, Ronald R., 1950-

Planned giving : a guide to fundraising and philanthropy / Ronald R. Jordan, Katelyn L. Quynn. - 4th ed.

p. cm.

Includes index.

eISBN : 978-0-470-48082-3

1. Deferred giving-United States. 2. Fund raising-United States.

I. Quynn, Katelyn L. II. Title.

HV41.9.U5J67 2009

658.15’3-dc22

2009001892

About the Authors

Ronald R. Jordan is a part-time professor at New Mexico State University where he teaches courses on financial planning, consumer economics, and academic and professional writing. He also consults with nonprofit organizations. He is a graduate of New England School of Law and was admitted to the practice of law in Massachusetts in 1975. Before retiring, he was the Assistant Vice President of University Advancement at New Mexico State University and former Director of Planned Giving at Boston University.

Katelyn L. Quynn is the Deputy Chief Development Officer at the Massachusetts General Hospital in Boston, Massachusetts. She oversees a staff of 90 development professionals, the hospital’s upcoming $1.5-2 billion campaign, and its international and global health fundraising programs. She is on the board of Charitable Gift Planning News. Katelyn is a former board member of the National Committee on Planned Giving, a past President of the Planned Giving Group of New England (PGGNE), and was named one of Planned Giving Today’s Planned Giving Professionals of the Year. She received PGGNE’s David M. Donaldson Award for outstanding contribution to the planned giving profession. She graduated from Tufts University and the Boston University School of Law.

Ronald Jordan and Katelyn Quynn have coauthored four books, all with John Wiley & Sons. They are: Invest in Charity: A Donor’s Guide to Charitable Giving; Planned Giving for Small Nonprofits; Planned Giving Workbook; and Planned Giving: Management, Marketing, and Law, winner of AFP’s Staley/Robsham/Ryan/St. Lawrence Prize for Research and CASE’s John Grenzebach Research Award.

IMPORTANT NOTE

Because of the rapidly changing nature of information in this field, this product may be updated with annual supplements or with future editions. Please call 1-877-762-2974 or email us at [email protected] to receive any current update at no additional charge. We will send on approval any future supplements or new editions when they become available. If you purchased this product directly from John Wiley & Sons, Inc., we have already recorded your subscription for this update service.

Preface

The Fourth Edition of Planned Giving: A Guide to Fundraising and Philanthrophy is completely updated, reflecting the most current developments in the field of planned giving. Further, this edition includes important new features, enhancing the format we established in 1995 when the first edition was published. With this edition, we strive to make a more user friendly, accessible, and practical text. While the content of the book and its primary features remain the same, we have included commentaries by the authors depicted in multiple boxes clearly identified as follows:

• Authors’ Insights: signified by an. Informal, chatty practical commentary for readers based on the authors’ personal experiences in a combined almost 50 years of development experience.

• Practical Tips: signified by the. More formal suggestions to steer the reader through the challenges of particular subject matter.

• Warnings: shown with a. Cautionary tips instructing the reader to look out, avoid pitfalls, and overcome obstacles.

• Coaches’ Tips: illustrated with a. Offers inspirational, “You Can Do It!” advice to help coach the reader through the process.

• Perspective: shown with. Helps the reader to consider the impact or role of other parties involved in the action including the donor, the donor’s family, professional advisors, institutional leadership, nonprofit staff, and other internal and external players.

Our goal in the fourth edition is to bring a new vitality and intimacy between the authors and readers while remaining authoritative, comprehensive, detailed, and sophisticated.

We take a team approach to planned giving and we do the same in our writing. We come from different backgrounds, have worked for the same and different charities, share some similarities and some differences, and have different strengths and weaknesses. We bring all of this to our work in writing this book. We set out to offer readers a text that we wished we had when we started out in planned giving many years ago, giving the reader the best and most practical advice, supplementing that with user-friendly forms and documents to help the reader succeed.

The book consists of 59 chapters divided into 11 parts. Each chapter stands on its own so that you may read about a specific topic that is of interest to you at the moment. Related chapters, taken as a whole, form a part, which is a group of interrelated chapters covering a much larger section of planned giving content. At times, you may want to read simply one chapter, and at other times you may find it helpful to read the entire section.

As in all of our past editions, we offer an expanded CD-ROM containing over 200 documents divided into six different categories. We offer these to help our readership develop a set of documents to meet their employer’s needs.

We welcome comments and feedback on this new format and thank our loyal readers for their support and encouragement over many years. We also thank our employers, our donors, our planned giving colleagues, and all of the individuals and organizations that appear in the preface.

Please drop us a note if you have corrections or ideas for future chapters.

Ronald R. Jordan, JDKatelyn L. Quynn, JDApril 2009

Acknowledgments

For any book, writing a new edition takes dedication, patience, and cooperation, not just between co-authors, but between and among the authors and all of those professional volunteers who unselfishly lend their insights and expertise to the manuscript. At the risk of missing someone, we’d like to thank the following individuals and organizations that have helped with this 2009, Fourth Edition of Planned Giving: A Guide to Fundraising and Philanthrophy along with those who have made significant contributions to previous editions and supplements:

John Wiley & Sons, who, since 1995, has been with us from the start as publisher of all of our editions and all of our books. Thank you! It is an honor to be associated with such a fine international publishing firm.

PG Calc, 129 Mount Auburn Street, Cambridge, Massachusetts, 617-497-4970. We want to thank this fine company and its staff for allowing us to reprint PG Calc calculations in every edition of our book, and for acting as a wonderful resource to all in our profession. We want to thank Frank Minton and Edie Matulka for their expertise and knowledge in the update of the regulation of gift annuities and the work that they do on behalf of our entire profession.

Trust and Estates Magazine, 249 West 17th Street, New York, 10011, 212-204- 4200, for permission to allow us to adapt from Marjorie Houston’s article, “Mutual Fund Transfers for Charitable Gifts.”

The Wayland Group, Counsel to Non-Profit Organizations, 323 Boston Post Road, Sudbury, Massachusetts, 781-443-3224, for their continued counsel and expertise.

Colleagues at the Massachusetts General Hospital, under the leadership of Vice President and Chief Development Officer James E. Thompson: Kathleen Duffy, Director of Planned Giving and her planned giving team; Kara Raynor for her work with the President’s Council and work on “Creating a Volunteer Society for a Development and Planned Giving Program;” and Michael Allard and Joan Orr for their work on HIPAA. Many thanks to all of these wonderful colleagues for their professionalism and expertise.

Don Beasley, Beasley Mitchell & CO LLP, 509 S. Main Street, Suite A, Las Cruces, NM, 575-528-6700, for being so generous with his time and for making very valuable contributions to the important technical aspects of this text.

Stephen A. Bernhardt, Chair, Department of English, Andrew B. Kirkpatrick, Jr., Chair in Writing, University of Delaware, for coauthoring Chapter 44, Drafting Planned Giving Documents. We are honored to be able to share with our readers Steve’s insight and professional expertise in drafting workplace documents.

The Partnership for Philanthropic Planning (formerly The National Committee on Planned Giving), 233 McCrea Street, Suite 400, Indianapolis, IN, 46225, 317-269- 6274, for their professionalism and service to the planned giving and philanthropic communities and for allowing us to include the Model Standard of Practice for the charitable gift planner.

Carolyn Osteen, Esq., Partner, Ropes & Gray Boston, for teaching us over many years the art of planned giving, not just the law. Carolyn is a true leader and mentor to many in this field.

Professionals in development and other fields, including Sue Ramsey, Director of Gift Planning at Boston College.

Our families: Dianne C. Jordan; Derek Jordan; Barry Smith; Henry and Andrew Smith. Thank you for your continued patience as we worked on this latest edition.

PART I

Planned Gifts

CHAPTER 1

What Is Planned Giving?

1.1 Getting Started

To donors, planned giving presents attractive, innovative, and creative gift options. To charities, planned giving provides avenues to reach additional donors, enlarge gifts, and generate new gift revenue. To planned giving staff members, planned giving is an exciting and rewarding career that includes mastering a body of knowledge other development professionals may not know.

And the best part of it all is that planned giving is even more than that.

Sure, planned giving has its technical side, but any field worth doing is worth learning and planned giving officers soon learn that its most difficult challenges produce its greatest rewards. Apart from the technical side, planned giving is all about people—the donors, their families, their advisors, as well as those who benefit from donors’ generosity, the scholarship recipients, the patients and patrons, and the faculty and staff who advance medical and scientific technology to enhance the quality of life. Let’s also not forget our colleagues, the charity’s officers, trustees, presidents, and CEOs who work alongside us. In addition, remember that our work makes contributions to a larger good.

Planned giving is a gift option for the young and old, the rich and those with fewer resources, those with cash and those with stock, real estate, and tangible personal property. It is even for those with modest goals like establishing an endowed family fund compared to those with more ambitious plans like naming a building, or underwriting the cost of a center or institute.

Planned giving is an option in which both the donor and the charity benefit; and the one who puts it all together—the planned giving officer—also enjoys the satisfaction that comes with doing a job well.

(a) A Word About the Economy

Planned giving is a gift option that is never out of fashion and one that stands strong in the face of a weak economy or an unsettled real estate market. When donors face financial instability, they can hesitate to make charitable gifts, which is a natural response. After all, charitable giving is largely funded with discretionary income and surplus assets.

If donors hesitate, postpone decisions on their philanthropy, or stretch out their gifts, there is still much that can be done to build for the future when more favorable times return. It is paramount to continue to fill the nonprofit’s pipeline with prospects. Now is the time to rebuild donor networks, reestablish visitation programs regionally, nationally, or even internationally, and reinforce the message about the important work that charities perform for the public good. It is also the time to create new relationships that may result in gifts now or in the future.

Donors have to be reminded that the charity’s work continues even in the face of uncertainty, and that donors’ financial support is essential to deliver the charity’s services and programming. Read more about how to deal with a troubled economy in Chapter 21, Refocusing on Philanthropy, Chapter 30, Combating Donor Fatigue and Overcoming Organizational Complacency, and Chapter 46, Marketing the Noneconomic Benefits of Philanthropy, for more ideas on overcoming these challenges.

1.2 Introduction

As charitable gift planners within our various organizations, we focus much of our energy on estate planning issues, financial ramifications, and tax benefits. Yet we must also remember that a donor’s act of giving, is paramount for the transaction to be completed. When a donor makes a planned gift to a nonprofit entity—usually a religious, educational, health, arts, cultural, environmental, or social services organization—the donor irrevocably parts with the asset and cannot retrieve it if it is needed in the future. If the donor does not have a real desire to benefit a charity, then the planned gift in all likelihood will not or should not be made.

PRACTITIONER TIPS

Planned giving staff members are charitable gift planning counselors helping donors fulfill their goals while securing financial support to help charities deliver services for the public good.

Planned gifts fall primarily into four categories:

1. Outright gifts, whereby the nonprofit often has use of the asset immediately, such as gifts of cash, securities, tangible personal property, and some real estate gifts

2. Bequests, whereby the donor uses or controls the asset during his lifetime and the charity receives the asset at the donor’s death

3. Life income gifts, whereby a donor makes a gift today and receives a stream of income for life, and upon the donor’s death the nonprofit has use of the remainder value of the gift

4. The creation of endowed funds

The nonprofit should be in a position, at a minimum, to handle successfully those gifts made through securities, bequests, and charitable remainder trusts that are established by the donor and managed outside the nonprofit. The nonprofit also should be able to easily handle the creation of endowed funds. A complete program, however, will be a planned giving program that offers to donors life income gifts such as charitable gift annuities, deferred gift annuities, a pooled income fund, and the opportunity to make gifts of real estate. Such a program should be managed by at least one full-time professional and be supported by additional full-time staff members.

WARNINGS

Charities should offer planned gift options commensurate with the charity’s needs, staff members’ level of experience and the donors’ likely level of interest and financial sophistication. A successful annual fund program should be well established before implementing a planned giving program. To identify planned giving prospects look for loyal donors who have made a series of annual gifts over several years.

1.3 Planned Giving from the Donor’s Perspective

Planned giving is attractive to donors for many reasons. Through a planned gift, donors often can make larger gifts than they thought possible, and for some donors this is the only way to make a substantial gift to charity. It often happens that when donors learn they can make a gift that (1) pays a stream of income for life, (2) increases the yield they may currently receive from other investments, (3) provides a charitable income tax deduction, and/or (4) reduces or eliminates capital gains taxes or estate taxes, they feel that they cannot afford not to make the gift. Planned giving also allows donors to be creative in making a gift. Real estate or tangible personal property that a donor is not using can be given to a nonprofit and thereby provide the donor with an income stream and various tax advantages. Conservative “blue-chip” stocks paying a 1 to 2 percent yield can constitute a life income gift and provide the donor with a substantially higher income stream, such as 6 to 9 percent. Planned giving options can encourage the charity-minded donor to act—to make the gift sooner than later.

COACHES’ TIPS

Planned giving is a creative process enabling donors to make gifts greater than even what the donor initially might have thought possible. Evaluate the interest level expressed by an individual to determine whether he is likely to become a donor or is motivated to associate with the charity for another reason. Conversations with the individual will likely answer that question over time. Reaching that threshold decision as to whether an individual has potential to actually make a gift is an important part of the screening process. Celebrate the creative side of planned giving by offering one or more alternatives to a donor who is considering making a gift. Planned giving is both rewarding and fun.

1.4 Planned Giving from the Organization’s Perspective

A nonprofit organization attracts more donors and gifts by offering a complete range of giving options, including a variety of planned giving vehicles. Most life income arrangements, including charitable gift annuities, pooled income funds, and charitable remainder trusts, pay an income to a donor for life. This means that the organization must invest the gift to produce a yearly income stream to the donor; it does not have use of the principal of the gift until the donor dies. This unique obligation allows an organization to build its endowment and its future through its relationship with its donors. The charity pays out an income stream, based on actuarial tables, while continuing to invest the principal amount with the purpose of generating interest equal to or greater than the income paid to the donor. When older donors make a planned gift, the organization pays a high rate of return, assuming that the donor will live for fewer years. However, building and strengthening relationships between charities and donors increases the chances that additional gifts will be made. For a more detailed explanation of life income gifts, see Chapters 2 and 3.

1.5 Planned Giving from Management’s Perspective

Planned giving staff can find themselves in conflict with the nonprofit’s central administration, because the demand for current cash is frequently more valued than the promise of future support through planned gifts. This lack of common goal can create problems for the planned giving officer.

AUTHOR INSIGHTS

It is important to remember that planned gift solicitations can sometimes result in a donor making an outright gift of cash. As long as the planned giving officer receives “credit” for the gift, and the charity recognizes that the cash gift is a positive outgrowth of the planned giving program, all players should be pleased. A planned giving officer who values closing cash gifts rather than simply soliciting exclusively for planned gifts is invaluable to the organization. Any gift that provides for the overall good of the organization is a valuable gift and should be acknowledged accordingly.

Central administration may include the president of the organization, the vice president for business affairs, the treasurer, and general counsel, but also may include the vice president or director of development. The vice president for development may have hired a planned giving director, with the best intentions of creating or strengthening a planned giving program, but for any number of reasons may not fully support the planned giving effort or may emphasize raising outright gifts.

This section discusses issues that impact planned giving staff members in relation to their nonprofit. It examines the way planned giving should, ideally, be viewed within an organization, problems that may arise related to planned giving, and some specific actions that can be taken to make a planned giving program more successful.

1.6 A Focus on the Future

Although most development staff members of a nonprofit focus on the need for current income and outright gifts, planned giving officers focus on the future. It is common to hear nonprofit presidents and vice presidents for development say, “We need cash today; we can’t wait for tomorrow.” A planned giving officer’s response might be, “If the organization had established a planned giving program 10 to 15 years ago, we would not be so pressured to raise cash today.” A development program must balance its efforts to bring in dollars today while building a foundation for the future.

There is no better way to provide for an organization’s future than through planned gifts. A successful planned giving program stabilizes and balances a development program. During a recession, annual giving programs and major gifts may suffer, but planned giving programs generally prosper because planned gifts provide such substantial financial benefits to donors. Planned giving focuses on gifts that will materialize during a 50-year period, although most gifts are realized over a shorter, 3- to 5- to 10-year period. An appetite for current cash can short-circuit the ability to produce more substantial gifts that are nurtured and cultivated over time, and organizations may lose financial support if the process is rushed, thus producing disillusioned, and sometimes alienated, donors.

AUTHOR INSIGHTS

During recessions or economic downturns, planned giving programs may out-perform the charity’s annual fund or major gift programs. Quite often, this is due to the tax advantaged benefits of planned gift options. Donors with losses on stock investments may choose to make a gift of those assets, triggering favorable tax treatment. Further, bequests materialize in the life of many charities at often the most opportune times. The gift may seem serendipitous to the charity when, most likely, it was the result of the hard work of a former staff member. Never underestimate the importance of a bequest.

(a) Organizational Patience

A nonprofit organization that embarks on a planned giving program needs to adopt the notion of organizational patience, to recognize that it takes time for a planned giving program to work and for the planned giving officer to secure planned gifts. All too often, nonprofits expect instant success from the planned giving program. This rarely happens, and management can become impatient and disenchanted with the program. Instead, management must understand that a planned gift is often a large and complex gift that involves a number of financial and estate-planning decisions. Often the donor is elderly, and other players—attorneys, financial advisors, accountants, and family members—who frequently are involved may delay the process.

PERSPECTIVES

Even though having all the right players involved might produce delays, the resultant gift is likely to be the best outcome for all involved.

Sometimes there are too many related considerations to rush a planned gift, but once the gift closes, a satisfied planned giving donor is often a repeat donor.

(b) The Donor Is the Decision Maker

In the quest for support, management sometimes substitutes its own judgment for that of the donor. Although planned giving officers can be influential in affecting the size, timing, and scope of a donor’s gift, these decisions must be made at the donor’s discretion. It is important for everyone involved to remember that the donor determines:

• The size of the gift

• The timing of the gift

• The form or structure of the gift

Planned giving officers must remind management that although they understand the organization’s need for current cash gifts, decisions about any gift must be made by the donor.

1.7 Cost Benefit Analysis

Some organizations decide not to begin a planned giving program because the program is labor intensive and expensive to operate. Although it is true that there are significant challenges to a planned giving officer in learning and managing, and greater operational expenses for software, management, marketing, and education, a planned giving program usually provides an excellent return on the organization’s investment. If an organization does not offer a planned giving program, it cannot compete for support among its peer organizations that do offer such programs.

It is important to note that many major gifts raised by planned giving officers do not come through planned giving. Frequently a planned giving officer asks for a planned gift from a prospect but instead receives an outright cash gift. Many donors are motivated to make a major gift to an organization after reading its planned giving marketing pieces; after discussions with a financial advisor, the donor decides to make a gift with cash rather than through a planned gift. Management should consider the benefits a planned giving program can bring to a development program apart from planned gifts.

1.8 Planned Giving and Annual Giving: Partners

Some development professionals believe that planned gifts divert support from an organization’s annual giving program. The argument is that, in planned giving, very few new dollars are added to the program but are instead reallocated among other programs. Although annual giving donors often are converted into new planned giving donors, planned giving donors frequently become new annual fund donors. Most annual fund donors who become planned giving donors continue to support an organization’s annual giving program, and the organization benefits greatly when the $50-per-year annual fund donor becomes a $20,000 planned giving donor. It is the planned giving officer’s responsibility to encourage continued giving to the annual fund. Annual fund and planned giving programs should complement rather than compete with each other.

Some development programs, as part of their metrics, require planned giving officers and major gift officers to solicit a specific percentage of donors for an annual gift. Such solicitations remind everyone of the importance of securing unrestricted funds for general operations.

1.9 Perspectives for Success: Leadership, Resources, and Staffing

Many professionals whose responsibilities lie in the area of planned giving also are involved in other development functions, which may cause a dilution of the planned giving effort and lead to management’s becoming dissatisfied with planned giving efforts. To build a successful program, it is necessary for management to appoint one person to champion the planned giving effort. This individual must be able to devote at least half of his time to planned giving exclusively and must make the program a priority. Planned giving programs sometimes fail because no one is ultimately responsible for the program, given the charge to provide leadership, or given the time to make it work.

AUTHOR INSIGHTS

One of the authors of this text experienced a 50 percent growth in existing planned giving funds after just one year of focusing fulltime on the charity’s planned giving programs. In addition, the charity devoted much-needed resources to underwrite marketing efforts to build the program.

Furthermore, a planned giving program can fail if it has an inadequate budget and insufficient resources. Resources must be allocated and accessible for marketing, training, and other operating necessities. Programs also fail when staff turnover is so great that the constant flow of employees disrupts the program and confuses its donors. Management should focus energy on keeping its staff. At many nonprofits, staff members are not provided incentives to stay with the organization because of salary restraints and an absence of opportunities to advance. Because planned giving is generally a revenue-producing area, adequate financial incentive should be included in the program budget.

0

Competition for experienced planned giving professionals is great, and staff often change jobs because of better salaries offered by other organizations. Tenure in a development job is approximately two years, and management is just beginning to realize a return on its investment at about the time an employee is planning to move on. It is better management to reward a good staff member with financial incentives and opportunities for advancement with the organization.

PRACTITIONER TIPS

It is far more economical and efficient to retain and reward good staff members by providing additional salary benefits and incentives than to spend time and money on hiring new staff to replace former staff. After factoring in the cost of recruiting, hiring bonuses, and other perks, new staff members often cost more than those currently employed, and the current ones already know the charity 21 and the donors.

1.10 Planned Gifts Now and in the Future

Planned giving has become one of the most attractive ways for individuals to make gifts to charity. Much of this country’s wealth has traditionally been held by older Americans, those aged 60 and older, and younger entrepreneurs. As the population rapidly ages, Baby Boomers become middle-aged, older Americans live longer, and concerns about healthcare increase. Many individuals want to control their assets while living, and a planned gift allows a donor to benefit financially from the gift while engaging in a relationship with the charity. The years ahead will likely bring the largest intergenerational transfer of wealth in U.S. history, as parents transfer assets to their Baby Boomer children. This transfer creates the need for close examination of tax issues, beyond the traditional benefits of income tax savings. Passing wealth on to family members through planned giving options offers an attractive way to ensure current income for the individual and possibly additional family members while receiving tax advantages and providing for charity. Thus, nonprofits need to emphasize sophisticated planned giving techniques that provide needed benefits to donors while building their own future.

PERSPECTIVES

Engaging all members of the donor’s family in the gift process encourages the growth of new generations of donors. In addition, this new generation may one day find itself in charge of the family’s philanthropy. Charities that foster good relationships with all parties are likely to benefit from philanthropic choices made by new decision makers.

1.11 The New Planned Giving Donor

Planned giving has changed over the years. No longer are the majority of donors elderly widows who, cultivated over tea, make the traditional donations to a husband’s alma mater and the local hospital. Today’s planned giving donor may just as easily be a young entrepreneur who establishes a charitable remainder trust with new stock holdings. Planned giving donors have become much more savvy and knowledgeable, and today’s planned giving officer often has extensive contact with a donor’s lawyer, financial advisor, broker, trust officer, and/or accountant. Outside advisors usually are included in the process because of the range and complexity of gift vehicles available to donors of all ages, who have various personal and financial objectives. Planned giving officers need to monitor current trends in tax laws, estate planning, and financial planning, and must learn to operate in the for-profit business world, bringing its energy and expertise to the nonprofit setting.

1.12 The Young Planned Giving Donor

Traditionally, planned giving donors were older, wealthier, and better established. While generally this is still true, a younger planned giving donor has emerged at many nonprofit organizations. This donor has responded to the planned giving office’s public education efforts to promote planned giving as part of the donor’s overall financial and estate planning. Planned gifts like deferred gift annuities help donors prepare for retirement while they help the nonprofit. Contingent bequests name a nonprofit as beneficiary of a donor’s estate in the event of the death of a donor who is unmarried without children or in the case of simultaneous deaths of a younger couple without children.

Many young donors, especially entrepreneurs and professionals, have the capacity and interest in making a mutually beneficial planned gift. Planned giving must be presented as an option that can complement, rather than compete with, the donor’s financial objectives. Planned giving, properly presented, can do just that.

PRACTITIONER TIPS

Another way for a young planned giving donor to make a gift is through the creation of a named current use or endowed fund. The donor can put his or his family’s name on the fund and establish terms governing the use of the fund.

1.13 Planned Giving in a Development Office

Planned giving has evolved from a misunderstood and underused development function into a professional specialization. Traditionally, planned giving was not fully incorporated into many organizations’ development programs. Planned giving officers spoke a foreign language and engaged in technicalities that other development officers did not understand and, perhaps, did not want to learn. Although the planned giving field employs special techniques, a successful planned giving program is built on solid development principles. The specifics of such a program can be learned, and a planned giving officer does not need to be a lawyer, banker, or accountant to be successful. The planned giving office, as an integral part of the overall development effort, should work closely with other areas in development to further office and organizational goals.

(a) Businesslike Approach

Although successful planned giving officers build on solid development skills, there are additional characteristics that they should cultivate to enhance the position and a professional image. For example, some development officers befriend prospects and become part of their lives by running errands and doing favors. Because of the technicalities of planned giving, in many ways it is more appropriate and easier for the planned giving officer to approach the donor at arm’s length, treating the donor interaction as the business relationship it truly is. By addressing business issues at the outset of a meeting, the planned giving officer can resolve such matters and leave time for more relaxed, informal conversation. Both the planned giving officer and the donor know why the meeting was arranged, so it is best to tend to the business portion of the meeting as early as possible. Donors most often make their gifts to the fundraiser who is the most skilled and professional.

AUTHOR INSIGHTS

The authors have seen this happen repeatedly. However, occasionally, the donor will elect to make the gift to the most senior person in the organization or to the vice president of advancement, even though the donor has worked almost exclusively with a very capable planned giving officer. Rank has its privilege.

(b) Expertise and Training

A planned giving officer needs to present herself as a trained, experienced professional with knowledge in several areas, including law, banking, and finance. The greater the officer’s knowledge, the better able she is to anticipate questions and solve gift-planning problems. Presenting herself as an expert in this field instills confidence in donors and coworkers alike. Taking courses in estate planning, financial planning, and federal income taxation, and becoming skilled as writers and effective speakers enhance such professionalism. Courses in communications and speech can improve presentations, and entrepreneurship, business, and marketing courses provide important perspectives to invigorate and successfully continue a planned giving program. Perhaps the most important skill a planned giving officer can have is the ability to work with all types of people. A planned giving officer needs to be a good listener and conversationalist. Cultivating personal interests such as travel, sports, and literature will allow points of commonality to arise in conversations with donors who share these interests. Such conversational ease helps in negotiating the terms of a planned gift.

COACHES’ TIPS

The good news is not all of these skills need to be acquired at once. Over the years, opportunities occur to improve public speaking, writing, and knowledge bases in tax or estate planning. Explore career building opportunities that improve personal and professional skills and take full advantage of them.

(c) Personal Donor Visits

Never underestimate the value of a personal visit with a planned giving donor. A planned gift requires a donor to make choices related to family and finances, and a personal visit by the planned giving officer sometimes can make the difference between whether a gift is made or not. Donors appreciate the personal attention and are flattered that the gift is important enough to the nonprofit to warrant a special visit. Planned giving is a business that is best conducted face to face.

COACHES’ TIPS

This is where all the conversational skills mentioned earlier come into place. Planned giving affords many wonderful opportunities to engage fascinating people in conversation. Have fun!

1.14 Conclusion

The business of planned giving has changed over the years, but it will always rely on interpersonal connections. Planned giving is also teamwork, building effective working relationships with donors, donors’ advisors and families, and fundraising colleagues. It is a complex business that needs individuals skilled in using multidisciplinary approaches to solving problems.

Part of the job of a planned giving officer is to educate management about the differences between planned giving and development in general. The rewards of a planned giving program can be considerable; however, a successful program requires patience and time. Long-term planned giving programs provide a solid foundation for a nonprofit organization and an attractive option for many donors. Cooperation and a mutual understanding of the roles of development and planned giving can serve well any nonprofit organization.