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S
Waterloo Wellington Fund Raising Executives
June 9th 2015
The Psychology of Money
Presented By
Richard A Daugherty CHS
Agenda
• Types of Givers
• Putting some perspective on Planned Giving
• Helping with the process
• Is Life Insurance a (go...
Types of
Givers
• Religious Giver
• Members of a local church who channel nearly
all of their givings to religious institu...
The Psychology of Giving
‘How do I determine how much I can give? I’m worried about
having enough for my retirement and my...
What Advisors See
S Upcoming Intergenerational Transfer of approximately $67 Billion
S Fact finders very vague about goals...
What Clients See

S Advisors do not usually bring up the idea of Planned Giving
S Clients do not want to re-do their wills...
Giving from Income
Donor Concerns:
▪Concerned about adequate monthly cashflow
▪Not able to or willing to budget for extra ...
Giving from Assets
Donor Concerns:
▪Taking away part of their estate that would otherwise go to family
▪Long term commitme...
The Advisor’s Role
• Financial and Estate Planning with donors
• Assist the charity with information for donors
• Help to ...
Education Workshops
We have developed workshops to help Charities:
▪Educate donors with regards to Planned Giving
▪Provide...
Workshops (con’t)
▪ Provide a forum to ask questions and generally discuss some
Planned Giving models
▪ Demonstrate the si...
Using Life
Insurance
• Final Expenses
• Debt Elimination
• Income Replacement
• Buy/Sell Funding
• Share Purchase Funding
...
Using Life Insurance for Planned Giving
The Process…
• Application (Health and Lifestyle Questions)
• Acceptance, Rating o...
Anatomy of a
Life Insurance
Policy
• Premium
• Dividend
• Cash Value
• Beneficiary
The key is…….
Naming beneficiaries is very Important because:
✓Funds flow directly to people or charities named and theref...
Different Types of Policies
Term
• Low initial premium
• Level death benefit
• No cash value
• Expires at age 85 or earlie...
A Tale of Two (Term) Policies
Term 10 - $50,000 policy
Initial Annual Premium - $210
Year 11 Renewal - $710
Year 21 Renewa...
Case Study
• John and Mary
• Both age 40
• Would like to donate to their
favourite charity
• Term 10 – $50,000 policy*
Ini...
Case Study
• Whole Life - $50,000 Policy
Guaranteed Annual Premium – $934.*
* $1,415 for 20 - pay
In Year Twenty…
Projecte...
Tax Implications and Application
Two Choices
•Tax receipt for insurance amount received on death*
•Tax receipt annually fo...
Other Options?
Other Considerations:
➢Donor is not insurable
➢Donor has an existing life insurance policy
➢Donor is not in...
Guaranteed Investment Certificate (GIC)
vs Guaranteed Investment Account (GIA)
S GIC and GIA is the same investment produc...
Leveraged Giving
S Client borrows $50,000 from bank (collateral loan)
S $50,000 is invested in conservative mutual funds o...
In Summary
My Advice is…..
•Provide education for your donors
•Work with advisors who understand and are positive about Pl...
Questions?
Thank you!
For any more information, please contact us at
Ogilvie Daugherty Financial Services.
The information contained in this presentation has been provided by Ogilvie Daugherty Financial Services
(ODFS) and has be...
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WFRE Richard Daugherty PSYCOLOGY OF MONEY

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WFRE Richard Daugherty PSYCOLOGY OF MONEY

  1. 1. S Waterloo Wellington Fund Raising Executives June 9th 2015 The Psychology of Money Presented By Richard A Daugherty CHS
  2. 2. Agenda • Types of Givers • Putting some perspective on Planned Giving • Helping with the process • Is Life Insurance a (good) option? • Other ideas • Questions
  3. 3. Types of Givers • Religious Giver • Members of a local church who channel nearly all of their givings to religious institutions • Generational Giver • Giving is a family tradition • Grateful Giver • Re-payers often give to medical charities and educational institutions who have helped them in the past • Moral Giver • Altruists give because it makes them feel good • Social Giver • Wants to make the world a better place and have a good time doing it • Investor • Wants to take advantage of tax and estate benefits and work for non-profit organizations who understand their concerns • Community – Minded Giver • Typical local business owners who serve on the boards and committees of non-profit organizations
  4. 4. The Psychology of Giving ‘How do I determine how much I can give? I’m worried about having enough for my retirement and my own savings. I’d like to give more but at times like these, I have to be careful with my money.’
  5. 5. What Advisors See S Upcoming Intergenerational Transfer of approximately $67 Billion S Fact finders very vague about goals or desires for Planned Giving. S Most Advisor’s are not educated in Planned Giving so they cannot give direction and advice to clients S Clients do not know or understand enhanced methods for Planned Giving S Advisors see Planned Giving as an Estate Planning issue and most work in the accumulation phase of their client’s plan
  6. 6. What Clients See
 S Advisors do not usually bring up the idea of Planned Giving S Clients do not want to re-do their wills (or procrastinate) S Solutions need to be simple to understand and implement S Planned Giving is a lifetime commitment so needs to be positioned as such (example: Life Insurance as an asset) S One more expense to add to their budget
  7. 7. Giving from Income Donor Concerns: ▪Concerned about adequate monthly cashflow ▪Not able to or willing to budget for extra commitment ▪“Already donating as much as they can” ▪Not seen as sustainable in the long term ▪Never considered making it part of the their budget
  8. 8. Giving from Assets Donor Concerns: ▪Taking away part of their estate that would otherwise go to family ▪Long term commitment of Planned Giving Program ▪Other needs for long term funds (medical issues) ▪Need to review program and reasons ongoing and often ▪Lack of understanding regarding tax benefits
  9. 9. The Advisor’s Role • Financial and Estate Planning with donors • Assist the charity with information for donors • Help to educate donors • Provide workshops and seminars • Work with other professionals
  10. 10. Education Workshops We have developed workshops to help Charities: ▪Educate donors with regards to Planned Giving ▪Provide perspective with regards to making Planned Giving part of a financial and/or an estate plan ▪Provide specific information on the use of financial products and how they can be used for Planned Giving
  11. 11. Workshops (con’t) ▪ Provide a forum to ask questions and generally discuss some Planned Giving models ▪ Demonstrate the simplicity of setting up a Planned Giving program ▪ Provide a resource person for both the donors and the Charity for ongoing education and training ▪ Present ideas that appeal to all types of donors
  12. 12. Using Life Insurance • Final Expenses • Debt Elimination • Income Replacement • Buy/Sell Funding • Share Purchase Funding • Intergenerational Transfer • Insured Annuity • Collateral Term Insurance • Insured Retirement Plan • Key-Person Protection • Executive Top-Up • Succession Funding • Mortgage Insurance • Creditor Insurance • Planned Giving
  13. 13. Using Life Insurance for Planned Giving The Process… • Application (Health and Lifestyle Questions) • Acceptance, Rating or Decline • Naming a Beneficiary • Assignment of the Policy
  14. 14. Anatomy of a Life Insurance Policy • Premium • Dividend • Cash Value • Beneficiary
  15. 15. The key is……. Naming beneficiaries is very Important because: ✓Funds flow directly to people or charities named and therefore bypasses the will ✓Saves estate on probate fees, estate taxes, legal and accounting fees ✓Funds flow to named beneficiaries within approximately 30 days ✓Several beneficiaries can be named as percentages or amounts ✓Can be changed any time ✓Confidential
  16. 16. Different Types of Policies Term • Low initial premium • Level death benefit • No cash value • Expires at age 85 or earlier Whole Life • Higher premium, but guaranteed for life • Potentially rising death benefit • Accumulated cash value and dividends • Lifetime coverage • Option to pay for limited period
  17. 17. A Tale of Two (Term) Policies Term 10 - $50,000 policy Initial Annual Premium - $210 Year 11 Renewal - $710 Year 21 Renewal - $1,642 Year 31 Renewal - $4,631 Year 41 Renewal - $13,152 Term 10 - $50,000 policy Initial Annual Premium - $118 Year 11 Renewal - $221 Year 21 Renewal - $374 Year 31 Renewal - $783 Year 41 Renewal – $2,092
  18. 18. Case Study • John and Mary • Both age 40 • Would like to donate to their favourite charity • Term 10 – $50,000 policy* Initial Annual Premium - $118 Year 11 Renewal - $221 Year 21 Renewal - $374 Year 31 Renewal - $783 Year 41 Renewal – $2,092 *Contract expires age 85
  19. 19. Case Study • Whole Life - $50,000 Policy Guaranteed Annual Premium – $934.* * $1,415 for 20 - pay In Year Twenty… Projected Cash Value = $12,643 Projected Dividend = $556 Projected Death Benefit = $71,086 In Year Thirty… Projected Cash Value = $45,645 Projected Dividend = $1,375 Projected Death Benefit = $112,687
  20. 20. Tax Implications and Application Two Choices •Tax receipt for insurance amount received on death* •Tax receipt annually for premium paid* *Speak with your accountant
  21. 21. Other Options? Other Considerations: ➢Donor is not insurable ➢Donor has an existing life insurance policy ➢Donor is not in favour of life insurance ➢Donor wants to consider other options
  22. 22. Guaranteed Investment Certificate (GIC) vs Guaranteed Investment Account (GIA) S GIC and GIA is the same investment product S Principle is guaranteed S Set rate of return for period invested S Renews at end of term if desired S GIC from bank or credit union or GIA from insurance co S GIA has named beneficiary and pays pension income
  23. 23. Leveraged Giving S Client borrows $50,000 from bank (collateral loan) S $50,000 is invested in conservative mutual funds or GIA S Annual interest of $1,625 is paid by client and written off as “interest paid on money borrowed to invest” from their income tax S Charity is named as beneficiary of the fund S On death of client, loan of $50,000 is repaid from investment and S Charity issues tax receipt to estate for growth on investment
  24. 24. In Summary My Advice is….. •Provide education for your donors •Work with advisors who understand and are positive about Planned Giving •Remember that donors have more questions and need more information than is usually being provided and that every donor’s situation is different
  25. 25. Questions?
  26. 26. Thank you! For any more information, please contact us at Ogilvie Daugherty Financial Services.
  27. 27. The information contained in this presentation has been provided by Ogilvie Daugherty Financial Services (ODFS) and has been prepared for information purposes only. Every effort has been made to provide accuracy in both calculations and assumptions and in no way was any information presented with the intention of misleading or misguiding the audience. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performances of any product. The information has been drawn from sources believed to be reliable, but it is not guaranteed to be accurate or complete. The information is not intended to provide financial, legal, tax or investment advice. ODFS and any of it’s affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered.   All trademarks are the properties of the perspective owners. Any reference to a company is for illustrative purposes only.   Do not produce any part of this presentation without permission. All rights reserved.   Participants are advised to consult their own legal and accounting and tax professionals before proceeding with any changes to their own plans or Portfolios. The presenter does not claim to have any expertise in legal or tax related matters.

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