The Imperative of Planned Giving
Misconceptions & Immediate Benefits
(c) 2012 Robert Hopkins
Pfaff, Rainmaker Solutions
What is a planned gift?
 In simple terms, planned gifts are deferred
gifts, though exceptions exist: some produce
immedia...
Planned Giving Basics
 Life insurance policies are a simple form of planned giving, where the donor
purchase a policy and...
Misconceptions
1. Planned giving offers no immediate benefits to the
charity. Its long-range benefits are outweighed by
ur...
Immediate Benefits
 A portfolio of planned gifts helps to leverage major gifts
from foundation and other major-gift prosp...
Marketing the Macabre
 The benefits of some planned gifts do not hinge on
the donor’s passing.
 These benefits can sprin...
Costs & Special Burdens
 Most nonprofits outsource the risks and costs of planned gifts
to financial institutions.
 Thes...
Review & Next Steps
Planned gifts provide a variety of compelling benefits to most
nonprofit organizations:
1. Increased c...
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The Imperative of Planned Giving

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The Imperative of Planned Giving

  1. 1. The Imperative of Planned Giving Misconceptions & Immediate Benefits (c) 2012 Robert Hopkins Pfaff, Rainmaker Solutions
  2. 2. What is a planned gift?  In simple terms, planned gifts are deferred gifts, though exceptions exist: some produce immediate cash flows to the nonprofit.  The world of planned giving includes bequests, insurance policies and charitable trusts, offering various income and tax benefits.  Most nonprofit leaders recognize the value of a planned-giving program, but common misconceptions prevent its incorporation with other FR strategies. (c) 2012 Robert Hopkins Pfaff, Rainmaker Solutions
  3. 3. Planned Giving Basics  Life insurance policies are a simple form of planned giving, where the donor purchase a policy and the charity is the beneficiary.  Gift Annuities are contracts - the donor transfers cash or property to the charity for partial tax deduction and lifetime income stream.  Charitable Remainder Trusts are financial instruments that enable donors to provide income streams to beneficiaries and the charity receives the “remainder” given a specific trigger event.  Charitable Lead Trusts are the inverse of Charitable Remainder Trusts. The charity receives the income stream and the beneficiary receives the remainder when a specific trigger event occurs. (c) 2012 Robert Hopkins Pfaff, Rainmaker Solutions
  4. 4. Misconceptions 1. Planned giving offers no immediate benefits to the charity. Its long-range benefits are outweighed by urgent needs. 2. The benefits of planned gifts spring from donor’s death. Its morbid and hard to market these gifts. 3. Planned gifts pose legal risks, and impose an formidable managerial burden on the nonprofit. 4. It exceeds our current resources, requires special expertise, and incurs too much cost. (c) 2012 Robert Hopkins Pfaff, Rainmaker Solutions
  5. 5. Immediate Benefits  A portfolio of planned gifts helps to leverage major gifts from foundation and other major-gift prospects.  Your planned-giving pledges communicate your organization’s financial stability, strategic foresight, and respected profile.  These pledges are a powerful testament to the nonprofit’s credibility in the community.  Charitable lead trusts generate immediate, regular cash flows, distributed to the charity, while providing the donor’s heirs with significant tax benefits. (c) 2012 Robert Hopkins Pfaff, Rainmaker Solutions
  6. 6. Marketing the Macabre  The benefits of some planned gifts do not hinge on the donor’s passing.  These benefits can spring from a variety of “trigger” events, unrelated to the donor’s mortality.  The donor can enjoy cash flows and tax benefits for a specific time period.  When the trust expires, the donor enjoys the impact of the planned gift during her lifetime. (c) 2012 Robert Hopkins Pfaff, Rainmaker Solutions
  7. 7. Costs & Special Burdens  Most nonprofits outsource the risks and costs of planned gifts to financial institutions.  These institutions charge reasonable fees to assume the fiduciary risks and administrative burdens of the program.  Development staff should train only in the various benefits and structures of planned gifts.*  Affordable software help trained development staff prepare detailed planned giving proposals. * The well-trained development officer understands how to market the various benefits and structures of planned gifts to the donor, but should never offer specific legal or financial investment advice. These issues are handled by estate/tax attorney or certified financial planners, paid by the donor. (c) 2012 Robert Hopkins Pfaff, Rainmaker Solutions
  8. 8. Review & Next Steps Planned gifts provide a variety of compelling benefits to most nonprofit organizations: 1. Increased capacity to leverage current opportunities 2. Continuous, present and long-term cash flows 3. Expands the number of prospects that can make major gifts 4. Diversifies marketing and prospecting strategies 5. Low cost and risk – huge potential rewards. 6. Ensures long-term financial stability For a free conversation about planned giving and the future of your organization, please contact us: Robert Hopkins Pfaff Rainmaker Solutions rainmaker-solutions.net robert@rainmaker-solutions.net (c) 2012 Robert Hopkins Pfaff, Rainmaker Solutions
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