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Planned Giving Presentation for Hal Reed

Planned Giving Presentation for Hal Reed

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  • Annual $5,000 giverAttended a DMP presentationConversation with a trusted advisor; asked about concerns “ What do you worry about at 2 am?”Outliving his moneyGifted stock; No Capital Gains TaxCurrent Income DeductionIncreased Income by 24%Increased Giving $5,000Created Charitable Beneficiaries
  • A few years later Joe died unexpectedly.His planning resulted in…Now his heart and life continue on today.Joe did not know how to connect his concern and the non-profitsWe all have Joes we do not know aboutI
  • I want to begin with…Find them in your booklet…
  • The largest drop in giving in 2009 was from households of a net worth of $1 million or more and are headed by someone 65 years or older.
  • Affluent have increased in 2009Still well below 2007 levelsNow focusing more on conservation rather than growth
  • Is this a surprise to anyone?
  • Bequests have been down 5 out of the last 7 yearsOnly 8% of Americans include a charity in their estate plans
  • The latest numbers reported by the IRS in Giving USA 2009Number of trust tax returns has remained level for many years
  • 10/18/2010 HBJ article 31 of 100 surveyed in CTBy United Way could cease operations within 1 year
  • 413,000 new charities in the last 9 years!
  • There is now the College Sustainability Report Card“Only independent evaluation of campus and endowment sustainability”
  • Charity Navigator, Guidestar, Givewell.orgIndependent charity evaluatorsExamining your health
  • The American Institute of Philanthropy (AIP) is a nationally prominent charity watchdog service.
  • The 21st Century Donor studyCrisis of confidence highest among donorsAged 57 to 75, Traditionally the most generous demographicMSNBC reported on a Harris Interactive PollOnly 1 in 10 Americans strongly believes that charities are honest and ethicalA 2008 study: How Americans View Charities: A Report on Charitable ConfidenceFound general confidence in charities hit a low point in 2003And has not moved up or down significantly since then
  • High Net Worth Households Who Consulted Charity Plummets35% decline in the number of high net worth households that consulted non profit personnel when making charitable giving decisions. Only 1 in 4 High Net Worth Donors see non-profit organizations as a resource for planning advice
  • Non-Profit Internal ObstaclesInadequate BudgetLack of Board SupportIneffective ToolsToo Little TimeShort-Term Focus
  • The Chronicle of Philanthropy stated that,“The board of many non-profits do not understand the value of planned giving in building relationships with key donors, and do not prioritize gift planning in the charity’s budget.”How many would agree with that?I frequently get asked about what type of non-profit would be a good client for PGS.The answer is an organization that is committed to planned giving and has dedicated time and money to planned giving.
  • Planned Giving Benefits both the Non-profit and Donor during the financial crisis Yet, board members and fundraising staff shy away from planned giving programs…
  • Old Tools Are IneffectiveBaby Boomers don’t respond to direct mail, they hate to be called, won’t give via the Internet and only want face-to-face solicitation, potentially the most expensive method to raise money.
  • In the Chronicle of Philanthropy’s Gift Planner Survey 4 they found that:Only 17% full time in planned givingA third spent less than ¼ of their time on planned givingDo you feel like the gentleman on this slide?How many of you spend 100% of your time on planned giving?75%? 50%? 25%? Interesting….
  • Charities Have Been Eating Their Seed CornIn farming, there is always the temptation is to eat the seeds that must be saved to plant the following spring.
  • There is an imbalance, a lack of organizational stewardshipSimilar to the federal government, we focus on today and do not plan enough for tomorrowSo what happens to planned giving?
  • There is no sustainability.Organizations tend to start – stop – start - stop
  • As a result, the pressure builds on development professionalsIn 2009 the Center on Philanthropy’s measurement of Fundraisers Confidence plungedLowest level since the annual study began in 1998.The rating dropped from 82.73 to 58.00 (28% decline)
  • We are constantly inundated with messagesStatistics show that Americans today get as much mail in a week as their parents did in a year.
  • Over the last 40 years we have seen the number of marketing messages we receive grow exponentially.It is estimated that today we receive between 5,000-10,000 messages per day.Advertisers have studied how many we can absorb per day -100
  • How big is a trillion?1000 seconds = 15 minutes1 million seconds = 2 weeks1 billion seconds = 32 years1 trillion seconds = 32,000 yearsInc. Magazine: we spend less time per input, block reception wherever possible and install filtering devices
  • In 2005 a study was conducted with affluent individuals with assets between $1 million - $10 million
  • Those with a net worth between $1-$3 million are worried about income taxes.For those with a net worth between $3-$10 million are more worried about estate taxes, with income taxes a close second.This is why the invitation to our donor presentations is titled “Income Tax Reduction and Estate Tax Elimination.”In advertising it is commonly said that you want to join the conversation in the minds of your target market.There is currently a huge opportunity to discuss these issues and provide clarity.The primary way to disconnect from the current tax system is philanthropy.
  • In the same study that asked the affluent about their concerns, they also asked about their wealth priorities
  • Affluent - Age 55+Numerous – 6.7M Millionaires, 11.3M with $500,000+Affluent give 2/3 of all individual givingMore Generous – 98% give vs. 70% of US populationOptimistic – 2/3s are optimistic about the future.Dedicated – nearly half serve on a board, volunteer 147 hoursAssets – Age 55+ control 70% of US wealthAsset Growth – wealth grew strongest of all age groupsBaby Boomers – 78.2M, 5 people turning 60 every 60 seconds

Pgs pggct hal_reed_uconn_11.16.2010 Pgs pggct hal_reed_uconn_11.16.2010 Presentation Transcript

  • Welcome!
    Planned Giving Group of Connecticut
    We Start Conversations!
    How to Create High Trust Donor Relationships
  • Joe
  • The Effect
    • Church $250,000
    • School $200,000
    • The Charity That Introduced Joe to Planned Giving Received a $963,000 Gift
  • Non-Profit Challenges
    10
    significant planned giving challenges!
  • Non-Profit Challenges
    Charitable
    Giving Down
  • 2007-2009 Recession
    Total Giving Down 5.5%
    Declined: Bequests -23.6%
    Foundations -8.6%
    Up: Corporations +5.9%
    Constant: Individuals -.4%
    Annual Giving Increases Adjusted for Inflation: Giving USA 2010
  • Individuals Are Critical
    Individuals are 81% of Charitable Contributions
    Giving USA 2010
  • Individual Giving Below 2004 Levels
    $244.6
    $243.4
    $239.1
    $229.5
    $229.3
    $227.4
    2004 2005 2006 2007 2008 2009
    Annual Giving Increases Adjusted for Inflation: Giving USA 2010
  • Non-profit Challenge
    2. Recession
    Hit Biggest
    Donors
  • Affluent Shrink
    Market Sizing
    Affluent Market Insights 2010 by Spectrem Group
  • Non-Profit Challenge
    3. Planned Giving
    Efforts
    Neglected
  • Bequests Down 5
    Of Last 7 Years
    22.90%
    4.70%
    2005
    2007
    2004
    -1.10%
    -6.40%
    -10.60%
    14.90%
    -23.60%
    Bequests Increases; Adjusted for Inflation: Giving USA 2010
  • Charitable Trusts Flat
    Trust Tax Returns
    Giving USA 2009
  • Non-Profit Challenge
    4. More Charities
    Stressed And
    Failing
    Charities Now Seek Bankruptcy Protection
    …many charities have turned to the courts for protection…
    The New York Times: Friday, February 20, 2009
  • Charities Stressed
    Economy Continues to Squeeze Charities
    • 58 percent increased need for services
    • 1 in 12 say they still face closure
  • Non-Profit Challenge
    5. Non-Profit
    Over-Saturation
  • Too Many Nonprofits
    By end of 2009 1,238,201non-profits.
    +419,193 since 2000!
    Giving USA 2010
  • Non-Profit Challenge
    6. Competition from Financial Sector
  • Donor Advised Leaders
    Fidelity Has Over 4 Times
    More Than the Next
    Non-Financial Fund
    Philanthropy.com Status
  • Non-Profit Challenge
    7. Increasing
    Scrutiny and
    Testing
  • Education Non-Profits Get a Grade
    College Sustainability Report Card
  • Healthy
    Non-Profits?
  • Watchdog Service
  • Non-Profit Challenge
    8. Donor
    Confidence
    Crisis
  • Crisis in Confidence
  • Donors Seeking Charitable Planning Advice
    The 2008 Study of High Net Worth Philanthropy – March, 2009
  • Non-Profit Challenge
    9. Insufficient
    Resource
    Commitment
  • Planned Giving Obstacles
    Ineffective Tools
    Too Little Time
    Lack of Board Support
    Inadequate Budget
    Short-Term Focus
  • Inadequate Budget
    The Chronicle of Philanthropy: Philanthropy.com
  • Lack of Board Support
    The Chronicle of Philanthropy: Philanthropy.com
  • Old Tools Are Ineffective
    The Chronicle of Philanthropy: Philanthropy.com
  • Too Little Time
    The Chronicle of Philanthropy: Philanthropy.com
  • Short-Term Focus
  • Future
    Security
    Urgent
    Needs
  • No Sustainability
  • Fundraisers Confidence Plunges
    28% Decline
    Center on Philanthropy Press Release – August 3, 2009
  • Non-Profit Challenge
    10. Donor
    Information
    Overload
  • Information Overload
  • Marketing Messages Per Day
    Why You Feel the Way You Do, Inc. Magazine, Jan. 1999 and Chet Holmes
  • Web Overload
    1 Trillion
    Google
    Index
    Of Web
    Pages
    1 Billion
    26 Million
    Official Google Blog
  • What Do Donors Worry About?
  • Donors Worries
    In 2005…
    What Percent of Families With a Net Worth of $1 Million to $10 Million Are Very Concerned About Losing Their Wealth?
    • 5 Out of 10
    • 9 Out of 10
    • 7 Out of 10
    • 2 Out of 10
    Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press
  • # 1 Donor Worry
    Percentage of Households with $1 Million to $10 Million in Net Worth Who Are…
    “Very Concerned About Losing Their Wealth”
    88.3%
    Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press
  • Living Too Long
    40 Percent Increase
    In Just 12 Years!
  • Running Out of Income
    The average 65-year old must now fund an additional 6 years of lifestyle!
  • Rising Medical Costs
    Retirees have a much higher inflation rate than the general population, largely due to medical costs.
  • Increasing Taxes
    Income Taxes
    Estate Taxes
    Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press
  • Wealth Priority Ladder
    Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press
  • Charity Lower Priority
    Information adapted from Cultivating the Middle-Class Millionaire Copyright ©2005 by Russ Alan Prince Wealth Management Press
  • Today’s Donor
    Stressed About Future
    Losing Their Wealth
    Living Too Long
    Running Out of Income
    Rising Medical Costs
    Increasing Taxes
  • What Do We Do?
    We Ask
    Donors for a
    Major Gift
  • What Donors Think
    The only time I hear from you is when you want….
  • A Major Gift
    An Ask For …
    Their Cash
    Their Securities
  • Our Primary Focus
    Is This the Best Single Focus?
  • The Answer
    A Balanced Approach
  • Planned Giving
    Non-Profit Benefits
    • Ties Donor To Non Profit By Creating Ownership
    • Donors Who Have A Planned Gift Give A Larger Percent Of Their Income Currently
    • Only 1 In 5 Has A Planned Gift
    Boston College Social Welfare Research Institute based on survey data collected by Opinion Research Corporation for The Non-Profit Times
  • Planned Giving
    Donor Benefits
    • Create Lifetime Income
    • Reposition Assets
    • Reduce Taxation
    • Create Tax Deductions
    • Leave a Legacy
    • Lifelong Connection to the Charity
  • A Balanced Approach
    Must Be:
    • Donor-Centric
    • Use Limited Resources
    • Cost Effective
    • Time Efficient
    • Sustainable
  • Who is the ideal planned giving donor?
  • Boomers Are Demanding
    • More Control
    • More Options
    • More Flexibility
  • Boomers are Influential & Redefine Every Industry
    • Coffee
    • Cars
    • Computers
    • Etc.
  • Boomers Redefine
    Charitable Giving
    Who gave Boomers (and others)
    what they want?
  • Meteoric Rise
    1st
    From nowhere to #1 in just 6 short years.
    3rd
    5th
    11th
    Began
    BOSTON--(BUSINESS WIRE)--Nov. 1, 1999 and LA Times
  • Undisputed Leader
    Donor Advised Funds
    Look at their lead in number of funds today!
    Status of Finances of Donor-Advised Funds in 2009 - Philanthropy .com
  • How Did Fidelity Do It?
    Donor-Centric,
    Sustainable
    Approach
  • Building High Trust
    3 Components
    Integrity
    Intimacy
    Interest
    Actions
    Emotions
    Motives
  • Era of Distrust
    • 2 Out Of 3 Can’t Trust Most People
    • 1 In 5 Don’t Trust People They Know
  • Integrity
    Words = Actions
    • Do what I say?
    • Complete what I start?
    • Then…
  • Integrity
    Words = Actions
    • Then…
    • I Can Trust What You Say
  • Integrity Killers
    Words = Actions
    /
    • ?
    • ?
    • ?
  • IntegrityBoosters
    Words = Actions
    • Return Calls Promptly
    • Hand Written Notes
    • Admit You Don’t Know
  • Intimacy
    = Emotions
    I Feel Comfortable
    Telling You About…
  • Communication
    Comfortable
    • Simply
    • Appropriately
    • Powerfully
  • Communicate simply
    • Pictures
    • Stories
    • Analogies
  • Communication Killers
    • Never, Ever, Ever Use Acronyms… CRT, NIMCRUT, CRAT, CLT, CLUT, CGA, ILIT…
    • Don’t Use IndustryTerminology
  • Communicate Appropriately
    • 6 out of 10 are Visual
    • 3 out of 10 are Auditory
    • 1 out of 10 are Kinesthetic
  • Communicate Powerfully
    Use Metaphors
  • Communication
    Which Speaks?
    • Words Used
    • Body Language
    • Tone of Voice
  • Which One Do You Focus On?
  • Communication Killers
    • Interrupt
    • Complete Sentences
    • One Up Their Stories
    • Complain or Criticize
    • Look Elsewhere
    • ???
  • Interest
    Motives
    I Don’t Care How Much You Know Until I Know How Much You Care!
  • Interest =
    Understanding
    • Their Situation
    • How They Feel
  • Understand
    What Are Your…
    • Fears
    • Worries
    • Concerns
  • Understand
    What is Most Important?
    Technical Mastery
    OR
    Helping Them Define Their Problems?
  • Understand
    Know This:
    • People Don’t Know What Their Problems Are
    • They Don’t Know How To Think About Them
  • Listen Actively
    • Really, Then What Happened?
    • Restate To Clarify
    • Who’s Talking The Most
  • Don’t Answer, Clarify
    • Tell Me More
    • Which Means?
    • Maybe It’s Me, But…
  • The Answer . . .
    To every question is
    a better question!
  • Powerful Questions
    • If you were to wake up at 2:00 in the morning and worry about something, what would it be?
    • What is your most meaningful charitable gift, not biggest?
    • What would you like the people who know and respect you to say about you?
    • Yours?
  • Earn Trust
    3 Components
    Integrity Actions
    Intimacy Emotions
    Interest Motives
  • Tip of The Iceberg
    Level 1: Unsolicited Gifts
    Regular Gifts
    Source: Surplus Wealth
    Motivation: Love of Charity
    Level 2: Solicited Gifts
    Regular, Major Gifts, Planned Gifts
    Source: Surplus Wealth
    Motivation: Love of Charity, Income Needs
    Level 3: Donor-Centric Motivation
    Major Gifts, Planned Gifts
    Source: Redirected Tax Savings
    Motivation: Tax Reduction, Income Needs, Family Values, Charity
  • Oseola McCarty
  • 10 Dimes Made a Difference
  • Thank You
    We Start Conversations!
    How to Create High Trust Donor Relationships