Become proactive in the planning process with your supporters. Treat them as client / donors.

1. Charities must learn how to encourage donors to keep the fruit and give away the tree. Become proactive in the planning process with your supporters. Treat them as client / donors. Develop lifetime relationships.

2. The Real Impact of Estate Taxes is Catastrophic Prince & Associates

3. Family Business Failures Educational systems have an opportunity to intervene and helpfamilies transition. Besides fostering a sense of community, itensures that viable businesses survive in the tax base.

4. Donor Concerns in Philanthropy Are Addressed With Education

5. Overcome Financial Fears • Financial goals must not be jeopardized by charitable strategies • Acknowledge and address concerns about the donor’s financial security and any potential turmoil from concerned heirs before pursuing gifting programs • The majority of donors would give more if they were in a position to do so • Show them how to afford more gifting

6. Financial Mentoring • Charity involvement in problem solving • Teach responsibility • Provide a forum for management and investment experience • Build self esteem • Develop administrative skills • Foster community leadership • Encourage donative intent

7. Sources of Planned Giving

8. Financial vs. Social Capital Income + Net Worth Personal Financial Capital Personal Social Capital Tax Involuntary Gift Voluntary Lifestyle Inheritance

9. Who decides how much comes back to your community and projects? Source: 2003 OMB and U.S. Treasury Dept..

10. Benefits of the CRT • Increased Income to the Trust Beneficiary • Tax Benefits from Repositioning Assets • Current Income Tax Deduction • Capital Gains Tax Avoidance • Estate Tax Savings • Tax-free Growth • Gift of Significance to Charity • Increased Estate to Heirs • Control of Social Capital Already Committed to the IRS, Minimizing Unnecessary Expenses • Enlightened Self-Interest Promoting the Concept of Economic Citizenship

11. Zero Tax Estate Plan $2,000,000 $36k/yr. premium Client & Spouse $3 Million Net Worth $100,000/yr. $100k/yr.+ Tax Benefit Balance of Estate $1,500,000 Irrevocable Life Ins. Trust WRT IRC 664 Trust Spousal Trust (“A Trust”) Family Trust (“B Trust”) $1,000,000 $1,500,000 $2,500,000 Proceeds $2,000,000 $500,000 IRD Charity or Family Foundation $2,500,000 Heirs $5,000,000 Captured “Social Capital” -- Economic Citizenship

12. Classic Applications • An executive with net worth concentrated in company stock and/or options with a need to diversify • The owner of a closely held business who wants to sell with more favorable tax treatment • “C” Corporate stockholders using partial redemptions • The owner of under performing non-leveraged real estate with a low tax basis • The holder of a highly appreciated stock portfolio who wants to reposition growth assets to income assets • The owner of property who is nearing retirement and wants out of day-to-day management (grain & equip.) • The owner of a low income or non-income asset who needs more current income • Someone who wants to improve management and control their estate assets

13. Every school district should consider creating a fund, foundation or community foundation and make planned giving a priority. Designate a specific individual to develop deferred gifts, while continuing to expand current financial support. • Students should not be expected to raise operating funds through candy, pizza and magazine sales. Instead, an integrated plan to redirect the community’s social capital should be implemented. Henry & Associates - Springfield, Illinois800.879.2098 tollfree - VWHenry@aol.cominternet web sites for ideas and tools:http://gift-estate.com