Presentation Transcript

1. Initiating The Legacy Conversation And Getting To The Ask National Capital Gift Planning Council 22nd Annual Planned Giving Days May 29-30, 2014 Jonathan H. Gudema, Esq., Principal, Planned Giving Advisors, LLC
2. What We’ll Cover Today Part I Why Planned Giving? Part II Initiating The Legacy Conversation and Getting to The Ask Part III Planned Giving Prospects by the Numbers
3. Part I Why Planned Giving will be extremely important for U.S. nonprofits in the next decade?
4. The Future of Nonprofits
5. The Future of Nonprofits “…over-reliance by nonprofits on just “keeping the lights on” is a short sighted strategy that steadily erodes the long-term survival of the organization. As important as annual giving campaigns are in the fundraising practices of the nonprofit sector, developing a steady stream of sustained long-term financial security deserves at least equal – if not the greater – priority.” It Matters…But Is It Working? A White Paper Series on Our Region’s Nonprofit Sector Fiscal Health & Sustainability The Philadelphia Foundation, July 2010
6. Revenue Potential Charitable Bequests represent Since 1971 7.7% Of all U.S. Fundraising
7. Revenue Potential IRS data over 10 years (1987-1997) showed that On average left 2.7 times their lifetime charitable giving in their estates Estate tax payers who left charitable bequests
8. Why Planned Giving? Inflation adjusted dollars Source: Giving USA 2013
9. Why Planned Giving? Individual Giving as a Percentage of Disposable Personal Income Adjusted for Inflation, in current Dollars Source: Giving USA 2013
10. Why Planned Giving? 1991 Oldest Boomers Age 45 Youngest Boomers Age 27 2011 Oldest Boomers Age 65 Youngest Boomers Age 47 Inflation adjusted dollars Source: Giving USA 2013
11. Why Planned Giving? in millions Source: U.S. Bureau of Labor Statistics
12. Why Planned Giving? 13.0 % of US Population Over 65 -- 2010 Maine Washington Vermont Minnesota New Hampshire Montana North Dakota Massachuttes New York Oregon Wisconsin Rhode Island Michigan Connecticut South Dakota Idaho Pennsylvania New Jersey Wyoming Iowa Delaware Ohio Maryland Nebraska West Virginia Indiana Illinois Nevada Virginia Utah Colorado Kansas Kentucky Missouri North Carolina Tennessee California South Carolina Oklahoma Arkansas Arizona Georgia New Mexico Mississippi Alabama Alaska 8.1% Louisiana Texas Florida 17.8% 5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+ Hawaii Source: U.S. Census Bureau
13. Why Planned Giving? 14.5% of US Population Over 65 -- 2015 Maine Washington Vermont Minnesota New Hampshire Montana North Dakota Massachuttes New York Oregon Wisconsin Rhode Island Michigan Connecticut South Dakota Idaho Pennsylvania New Jersey Wyoming Iowa Delaware Ohio Maryland Nebraska West Virginia Indiana Utah 10.1% Illinois Nevada Virginia Colorado Kansas Kentucky Missouri North Carolina Tennessee California South Carolina Oklahoma Arkansas Arizona Georgia New Mexico Mississippi Alabama Louisiana Texas Alaska Florida 19.5% 5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+ Hawaii Source: U.S. Census Bureau
14. Why Planned Giving? 16.3% of US Population Over 65 -- 2020 Maine Washington Vermont Minnesota New Hampshire Montana North Dakota Massachuttes New York Oregon Wisconsin Rhode Island Michigan Connecticut South Dakota Idaho Pennsylvania New Jersey Wyoming Iowa Delaware Ohio Maryland Nebraska West Virginia Indiana Utah 11.4% Illinois Nevada Virginia Colorado Kansas Kentucky Missouri North Carolina Tennessee California South Carolina Oklahoma Arkansas Arizona Georgia New Mexico Mississippi Alabama Louisiana Texas Alaska Florida 19.5% 5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+ Hawaii Source: U.S. Census Bureau
15. Why Planned Giving? 18.2% of US Population Over 65 -- 2025 Maine Washington Vermont Minnesota New Hampshire Montana North Dakota Massachuttes New York Oregon Wisconsin Rhode Island Michigan Connecticut South Dakota Idaho Pennsylvania New Jersey Wyoming Iowa Delaware Ohio Maryland Nebraska West Virginia Indiana Illinois Nevada Virginia Utah12.6% Colorado Kansas Kentucky Missouri North Carolina Tennessee California South Carolina Oklahoma Arkansas Arizona Georgia New Mexico Mississippi Alabama Louisiana Texas Alaska Florida 24.7% 5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+ Hawaii Source: U.S. Census Bureau
16. Why Planned Giving? 19.7% of US Population Over 65 -- 2030 Maine Washington Vermont Minnesota New Hampshire Montana North Dakota Massachuttes New York Oregon Wisconsin Rhode Island Michigan Connecticut South Dakota Idaho Pennsylvania New Jersey Wyoming Iowa Delaware Ohio Maryland Nebraska West Virginia Indiana Illinois Nevada Virginia Utah13.2% Colorado Kansas Kentucky Missouri North Carolina Tennessee California South Carolina Oklahoma Arkansas Arizona Georgia New Mexico Mississippi Alabama Louisiana Texas Alaska Florida 27.1% 5.7% - 9% 9.1% - 13% 13.1% - 17% 17%+ Hawaii Source: U.S. Census Bureau
17. What Wealth Transfer? # Births by Year Bust Years Boom Years Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
18. Why Planned Giving? 2018 – Oldest Baby Boomers reach age 72 Source: Giving USA
19. Part II Initiating The Legacy Conversation And Getting To The Ask
20. Top ten factors that triggered charitable addition to estate plans: 7 out of top 10 triggers for adding charity to estate plans relate to addressing one’s mortality! Approaching death Becoming a widow or widower Diagnosed with cancer Decline in self-reported health Divorce Diagnosed with heart problems Diagnosed with a stroke First grandchild Increasing assets Increasing charitable giving Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
21. Top ten factors that triggered REMOVING charities from estate plans: The same 7 out of top 10 triggers for adding charity to estate plans relating to one’s mortality were the same for REMOVING charities! Decline in self-reported health Approaching death Becoming a widow or widower Divorce Diagnosed with cancer Diagnosed with heart problems Diagnosed with a stroke First grandchild First child Exiting homeownership Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
22. Frame Conversation Around Legacy Conversations must be about your prospects’ personal LEGACY Not about their deaths How can we ensure that we can continue our mission for the next generation? Not about how we need your bequest today What kind of message/legacy do you want to be remembered for?
23. Top Ten Predictors of Charitable Bequests # years giving No offspring Highest levels of giving Funded living trust Female Last reported wealth Not married Last reported giving Growing wealth # years volunteering Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
24. When To Start The Conversation
25. Our Planned Giving Prospects? U.S. # Births by Year Bust Years Boom Years Source: Russell James, J.D., Ph.D., CFP®, Webainar “Wills That Won’t”, 2014
26. Learn To Ask The Right Questions How is your business going? Your family? Your investments? Retirement? Your real estate? Art or collectables?
27. Listen… Passion for the cause, of course! Learn to start identifying financial concerns Taxes Income Assets Dependents other than spouse Major changes in family situation or health Develop a fuller picture of your prospects
28. Clues – Options – Timing
29. Types of Planned Gifts The Great Planned Giving Divide
30. Categorize Your Prospects Testamentary vs. Lifetime Planned Gifts Higher Education Planned Gift Breakdown2005-2012 LifetimeGifts18.8% Testamentary Gifts 81.2% Source: VSE
31. Categorize Your Prospects Testamentary Giver or Lifetime Giver? Testamentary givers driven by: Retention of assets “just in case” Great Depression mentality, fear of poverty Fear of running out of money in retirement years – baby boomers? Lifetime givers driven by: Immediate tax benefits Immediate income benefits Illiquid, unique/unusual assets Recognition
32. Initiating The Conversation Introducing the idea Your goal is to simply communicate the legacy case (legacy elevator pitch?) These gifts may take months, if not years, to develop Decide in advance what you are asking the prospect to think about Hybrid: Have you ever thought about combining a gift from your estate with your campaign gift? Planned gift only: Would you consider joining the our Legacy Society? Put the ball in your prospect's court and listen Gauge the response for continuing the conversation
33. Your Legacy Case Statement Why a legacy case statement? Website and other communications A call to action Articulation of the reasons why your institution’s members, friends, alumni, etc.. should include your organization in their estate plans
34. Your Legacy Case Statement Different than your organization’s case statement for giving Your case for giving today should emphasize what you are accomplishing todayand in the near future Your legacy case emphasizes how your donors’ legacy giving can ensure the future of the institution Elements of a legacy case statement link: Past experiences/benefits/memories (words or imagery) With current success And need to secure the future Challenge for your donors’ to establish their own personal legacy
35. Your Legacy Case Statement
36. Making The “Ask” Your goal is to ensure that the prospect knows that he/she has been asked to do something Don’t expect an answer on the spot Write a game plan and script for yourself, other staff and volunteer solicitors Know how you are going to start off the conversation Have an idea of what you will say to transition the conversation towards an ask Have your ask memorized and ready to go Put the ball in your prospect's court and listen Gauge the response for continuing the conversation
37. Training Yourself No training replaces just doing it In person meetings are a must Never be overly aggressive But make sure your prospect at least knows he/she is being asked to consider joining the legacy effort Start with getting the commitment to the idea (details not needed now) Build into your efforts follow-up for later years for more details
38. Part III Planned Giving Prospects by the Numbers
39. Who Leave Charitable Bequests? Data Confirms that Wealth Ranked Donors Are Strong Prospects Sources: IRS Data as reported in Giving USA 2012, Russell N. James III, J.D., PH.D.
40. Who Leave Charitable Bequests? Sources: Jumpstart Labs – 2013 Connected to Give: Jewish Legacies www.connectedtogive.org
41. Who Leave Charitable Bequests? Sources: Jumpstart Labs – 2013 Connected to Give: Jewish Legacies www.connectedtogive.org
42. U.S. Pop. Age 55+ Charitable Estates Among Those With Will or Trust by Family Status Source: Russell James, J.D., Ph.D., CFP, www.encouragegenerosity.com
43. Childless Rates Among Boomers Think about the differences between those age 68 and younger versus those just a few years older… Women’s liberation movement Women started having more successful careers Having children later, if at all Much higher divorce rates Generally smaller families
44. U.S. % Childless Women Ages 40-44 THESE ARE OUR PROSPECTS Source: Russell James, J.D., Ph.D., CFP, www.encouragegenerosity.com
45. U.S. Pop. Age 55+ with a Will or Trust Source: Russell James, J.D., Ph.D., CFP, www.encouragegenerosity.com
46. U.S. Pop. Age 55+ with a Will or Trust by Age Segment Source: Russell James, J.D., Ph.D., CFP, www.encouragegenerosity.com
47. U.S. Pop. Age 55+ Use of “Will Alone” by Age Segment Source: Russell James, J.D., Ph.D., CFP, www.encouragegenerosity.com
48. Takeaways We need to branch out into other planning options beyond wills! Beneficiary designations IRAs Bank accounts Insurance policies We need to promote estate planning as much as planned giving
49. U.S. Pop. Age 55+ inclusion of charitable recipient by education level
50. U.S. Pop. Age 55+ Charitable Recipient Among Those With Will/Trustby Giving/Volunteering Source: Russell James, J.D., Ph.D., CFP, www.encouragegenerosity.com
51. Initiating The Legacy Conversation And Getting To The Ask Presented to PPGGNY April 23, 2014 Jonathan H. Gudema, Esq., Principal, Planned Giving Advisors, LLC