Brian Clontz: String Budget New Haven

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Brian Clontz: String Budget New Haven

  1. 1. Powerful Planned Giving with a Shoe-String Staff and a Shoe- String Budget!Bryan Clontz, CFP® President, Charitable Solutions, LLC (404) 375-5496
  2. 2. Agenda• Wealth Transfer Overview• Planned Giving Defined• Two Examples: Appreciated Stock and Charitable Gift Annuities• Legacy Motivation of Planned Giving• Planned Giving Prospecting 101• Next Steps
  3. 3. Wealth Transfer Realities• 1998-2052 (55 Years) Havens and Schervish Report• Transfer Between $41-136 Trillion (Low End is 2% Growth - High End is 4% Growth)• Charitable Bequests $6-25 Trillion• Drivers: Asset Appreciation, Depression Era Savers, Self-Perception of Wealth, Social Capital and Legacy Goals
  4. 4. Current State of Planned Giving $304 Billion; Total Individual Giving and Bequest Giving=$258.96 Billion Corporations 5.6% Foundations 10.9% Bequests 9% Individuals 74.5% Charitable Remainder Trusts/Lead Trust Value in 2009 - $125 BILLION Charitable Gift Annuity Value in 2009 - $15-20 BILLION Life Income Gifts Represent 10-12% of All Planned Gifts Charitable Remainder Trusts Extrapolate to $2 Trillion!!!!!Source: Giving USA, The Annual Report on Philanthropy for the Year 2009
  5. 5. Definition:Planned giving is a process using tax andfinancial planning methods allowing thedonor to efficiently achieve his/herpersonal and charitable objectives.• Answers: How should I give or what is the best way to give?• Solution: Lowers the donor’s real cost of giving.
  6. 6. Donor: Mr. & Mrs. BoardmemberTax Bracket: 40%Capital Gains: 20%Goal: Improve efficiency of giving.Assumes: Cost $10/share, Value $50/share Cash Gift Stock GiftTotal Value $1,000 $1,400SavingsOrdinary Tax 400 560Capital Gains Tax 0 225Net Cost of Gift $600 $615
  7. 7. Appreciated Stock or PropertyFederal government effectively matches$1.40 for every $1.00 a donor contributes
  8. 8. Charitable Gift Annuity Overview• Contract providing fixed payments over 1 or 2 lives in exchange for contribution• Obligation extends beyond original gift• Simple, One-Page Agreement Offered by Public Charities• Existed more than 160 years in US• Bargain sale calculation: FMV-PV Life Annuity = PV Remainder Interest (Charitable Income Tax Deduction) – Must comply with 10% rule
  9. 9. Typical CGA Donor • 78 Year-Old Female • $44,000 • Cash or Publicly-Traded Securities • 80-90% of all 2008 life income gifts were CGAs
  10. 10. Optional for Large Gifts InsuranceTax Deduction Lifetime Income CGA Heirs Charity
  11. 11. Current Beneficiaries of Wealth: Heidi and John Smith 100% 76% 24% 0% HEIRS TAX CHARITYGoals: Leave their children $1,000,000 each and replace taxes whenever possible with charity
  12. 12. NEW Beneficiaries of Wealth: Heidi and John Smith 100% + INS71% < 1% 71%HEIRS TAX CHARITY
  13. 13. Social Capital:The concept of social capital clearly reveals thatyou have a choice - and the power - to direct howassets you will not be allowed to keep willultimately be distributed and used. Involuntary Philanthropist Voluntary Philanthropist Alwin Ernst John Rockefeller, Sr.Estate $12,642,431 $557,905,182Tax $7,124,112 $17,124,988% Lost 56% 3%
  14. 14. Planned Giving Resources• Planned Giving Design Center – free articles, free technical reports and free planned giving calculator – www.pgdc.com• Giftlaw Pro – free articles and technical reports – www.giftlaw.com• Planned Giving Council Members Listserve – Gift- Pl, Non-Planned Giving Council –plannedgiving@yahoogroups.com• Debra Ashton – The Complete Guide to Planned Giving $95 at www.debraashton.com
  15. 15. Planned Giving Prospecting 101• People You “Know” Have Made A Planned Gift• Founders and Past/Current Leaders of Your Charity• “Loyals” – Consistent Givers• Opportunistic Development – Listen, Listen and Listen
  16. 16. Next Steps• Case• Planned Giving Committee• Formalize Policies and Procedures• Develop Rifle-Shot Approach Plan• Solicit and Ask Questions• Develop Proposals• Consistent Drip Marketing

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