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Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
Planned Giving: Its Role in a Comprehensive Development Program
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Planned Giving: Its Role in a Comprehensive Development Program

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This is a presentation I gave in to the students in Pace University MPA Program's class on Financial Resources for Nonprofits.

This is a presentation I gave in to the students in Pace University MPA Program's class on Financial Resources for Nonprofits.

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  • Transcript

    • 1. Planned Giving Who, What, Why, When, Where… Susan D. Edwards, Esq, CPA [email_address] Westchester Community Foundation (914) 948-5166
    • 2. What is Planned Giving?
      • “ Planned giving is the integration of sound personal, financial, and estate planning concepts with the individual donor’s plan for lifetime or testamentary giving.”
        • AFP Glossary
      • Donor-centered fundraising
      • Gifts to be received “later”
    • 3. When is an organization READY for Planned Giving?
      • A strong annual giving program
      • Has patience
      • Has persistence
      • Has leadership in place for both
    • 4. Donor Motivations for Making Planned Gifts
      • To help provide future funding for organization
      • Ability to restrict funds
      • Recognition for a loved one
    • 5. Planned Giving Prospects
      • Age 55 or older
      • Long-time member/supporter
      • Few or no dependents
      • Unusual generosity for OUR work
      • Appreciated assets
    • 6. When Donors Consider Making Planned Gifts
      • Personal timing/circumstances determine need
      • Need to create a valid will
      • Need to review and revise a will
      • Death of a spouse
      • Choosing executor, trustee and guardian
      • Need for estate liquidity
      • Health
      • Value of old policies no longer needed
    • 7. What to do when the Prospect says…
      • I need all the income my assets produce to live on
      • I can’t give away capital assets; I intent to pass them on to my children and grandchildren
      • I must put my kids through college!
      • Your institution is not my only charity
      • I need all my income. Most of my assets are non-income producing real estate so I am cash poor.
    • 8. Or when s/he says…
      • I hesitate to part with any assets; I worry about a long term illness and having enough to take care of myself.
      • Our oriental rug collection is our pride and joy, but our children don’t want the hassle of caring for them and insuring them.
      • This year’s been very bad for me; my tax situation is awful and I am going to owe a huge capital gains tax. Maybe some other year.
    • 9. Timing of Gifts
      • Give it outright
      • Give it later (after donor is deceased)
      • Give the asset now, keep the income
      • Give the income now, keep the asset
    • 10. Types of Gifts
      • Cash Gifts
      • Appreciated Assets
      • Non-Cash Gifts
    • 11. Cash Gifts
      • Appropriate for : Everyone
      • Tax Treatment : Fully deductible for itemizers (up to 50% of adjusted gross income). Excess may be carried forward for five additional years.
      • Potential Issues : Certain high-income taxpayers may have this deduction phased out.
    • 12. Appreciated Assets
      • Appropriate for : People with high appreciated securities, real estate or closely held stock.
      • Tax Treatment : Full fair market value of asset is deductible (up to 30% of adjusted gross income). Excess can be carried forward five more years. No capital gains tax paid on appreciation.
      • Potential Issues : Gift MUST be made to charity prior to sale of asset.
    • 13. Other Non Cash Gifts
      • Appropriate for : People wishing to donate real and personal property.
      • Tax Treatment : Fully deductible up to appraised value (form 8283 filed with return). Items valued at over $5000 MUST have an independent appraisal.
      • Potential Issues: If asset is sold within two years of receipt by institution, form 8282 must be filed. Potential problem for donor if sold under appraised value.
    • 14. Vehicles for Planned Gifts
      • Bequests
      • Charitable Giving Annuities
      • Pooled Income Funds
      • Life Insurance
      • Charitable Remainder Trusts
      • Charitable Lead Trusts
      • Retirement Assets
    • 15. Bequests
      • Appropriate for : Anyone with a will or trust
      • Tax Treatment : Gifts identified are excluded from federal estate and state inheritance taxes.
      • Potential Issues : Recipients MUST be qualified charities and gifts fully discernable.
    • 16. Charitable Gift Annuities
      • Appropriate for : Older individuals wishing “higher rate” of return on investments.
      • Tax Treatment : Current charitable deduction received for portion of gift based on life expectancy of donor. No capital gain on transfer of assets.
      • Potential Issues : Gifted asset value must be segregated. Tax free income ends when donor attains life expectancy.
    • 17. Pooled Income Funds
      • Appropriate for : Individuals wanting “higher rate” of return on investments but do not have the assets required for a CGA.
      • Tax Treatment : Current income tax deduction received for portion of gift based on life expectancy of donor. No capital gain on transfer of assets.
      • Potential Issues : Limitations on investment opportunities.
    • 18. Life Insurance
      • Appropriate for : People with existing policies which are no longer required to meet planning needs OR people wishing to take out a new policy which will result in a significant gift at death.
      • Tax Treatment : Current deductions provided for “cash surrender value” of existing policies or premium payments for new policies.
      • Potential Issues : Make sure state recognizes “charity” as “insurable interest.”
    • 19. What is a Trust ? Donor Bank/Trust Co. Donor (Trustor) is an individual or organization that gifts—transfers--funds or assets to a Bank (Trustee) for the benefit of a Charitable Organization (Beneficiary) 501©(3) org
    • 20. Charitable Remainder Trusts
      • Appropriate for : Individuals with large taxable estates wishing to preserve an income stream to someone for life or term of years with remainder of trust passing to organization.
      • Tax Treatment : Charitable deduction based on term of the life interest AND percentage passing to income beneficiaries.
      • Potential Issues : Trusts are considered separate taxpayers and must be managed and invested individually.
    • 21. Charitable Lead Trusts
      • Appropriate for : Individuals who want their estate to go to heirs but want to support their charitable organization with annual income.
      • Tax Treatment : Charitable deduction based on number of years payments are made to organization and whether trust reverts back to donor.
      • Potential Issues : Trusts are considered separate taxpayers and must be managed and invested individually.
    • 22. Tax Deferred or Retirement Assets
      • Appropriate for : Individuals with IRA’s, Keoghs, pension plans, annuities, etc.
      • Tax Treatment : Gift is excluded from estate, inheritance and deferred income tax liabilities.
      • Potential Issues : Favorable tax treatment is available ONLY in an estate. Many people are unaware that the combination of taxes on tax deferred assets may easily exceed 70%
    • 23. Phase-in Process
      • Planned Giving doesn’t have to happen all at once.
      • It can and should be phased in, step-by-step.
    • 24. Phase One , the Bequest and Beneficiary Designation Program
      • It requires a thorough understanding and implementation of a practical wills and bequests program for which effective educational efforts .
      • Marketing and public relations programs are critical elements.
      • Many times outright gifts of appreciated securities and real estate are also included.
      • For many charitable organizations, it may not be necessary, prudent, or affordable to progress beyond this stage of the gift planning process.
    • 25.     Phase Two, the Life Income Gifts Program
      • This phase assumes an advanced understanding of gift planning options and commitment of the resources necessary to move successfully into a fully developed gift planning program.
      • It builds on the successes achieved in the development of a strong Phase One foundation by continuing educational, marketing and public relations efforts.
    • 26. Phase Three , the Charitable Gift and Estate Planning
      • This is the level at which organizations engage in professional gift planning and counseling with prospective donors.
      • It involves well-trained third parties, such as attorneys, accountants, financial planners and other members of the planning team in the dialogue with prospective donors.
      • It requires the retention of a level of professional expertise and training which many nonprofits may not have available on a full time basis.
      • In many cases, the donor will actually engage the services of a professional who will help tailor the gift to insure that it meets the donor's needs and protects the donor's interests.
    • 27. If you just remember…
      • Planned Giving has a place in a comprehensive development program
      • It can be simple or very complex
      • It’s “big dollars” for established programs

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