Bequests: Defining your Legacy

1. Bequests: Defining your Legacy March 29, 2011 Prepared for the CLLby Lisa Radetski, Director of Individual and Planned Giving

2. What is a bequest? • A bequest is a gift through a will or estate plan to a specific recipient. A charitable bequest is a transfer of assets or property at death by will to a non-profit organization or organizations for charitable purposes.

3. Why make a bequest gift? • Leave a legacy that expresses your core values • Support good work • Make a gift with no decrease to your current income • Reduce taxes • If you do not have heirs, make a gift in lieu of your entire estate going to the government!

4. U.S. Sources and Usesof Charitable Contributions, 2009Source: Giving USA Foundation/Giving USA 2010 TOTAL GIVING $303.75 BILLION * Data for grants to individuals: Giving USA estimate ** Includes gifts made in prior years but claimed in tax deductions this year in “carry over,” gifts claimed by donors at a value different from what the nonprofit receives (in-kind gifts), and gifts to new organizations not categorized in time for the survey.

5. How do I make a charitable bequest? • Contact your attorney to draft a will with a charitable provision or add a codicil to your existing will. If you do not have an attorney, contact the Attorney Referral Service of the Chicago Bar Association for a referral

6. What are my options when making a bequest? • There are many ways to structure your charitable bequest. Talk with your attorney about these options: • A specific asset or dollar amount • A percentage of the residue of your estate • Contingent bequests • Unrestricted v. Restricted • Unrestricted: wherever needed most at the time • Restricted: only the income is to be used with the principal held in perpetuity • Undesignated v. Designated • Undesignated: for any purpose • Designated: for a specific program or purpose

7. How are bequests used? • Fourth Church unrestricted and undesignated: • First $10,000 goes to the Joint-Finance discretionary fund that is used to fund unbudgeted needs throughout the year. • A small portion has been used in some years to fill budget gaps. • Remainder is put in our invested funds which we treat as endowment. • CLL Unrestricted • Generally to the invested funds supporting the CLL • Can be directed by the Fourth Church Board of Trustees to where it is needed most at the time, including to current annual operating needs. • Restricted • Gift principal is held in perpetuity and income is used to support the CLL.

8. Where the money comes from and where it goes Resources Disbursements • Please note that on the receipts side: • Other includes interest income, vending machine income, administrative charge-backs to Chicago Lights, the counseling center and the Day School, and partial use of unrestricted bequests for operating purposes. • Member and friend giving includes pledged gifts, loose plate gifts, restricted gifts, and any gifts received by the church or Chicago Lights not associated with a pledge.

9. An unrestricted bequest gift can be any size If the gift is restricted or designated to support a specific whole program, it will be used that way. If it is a new initiative, it would need to endow the operating costs of that new initiative , be in line with the mission and goals of CLL and Fourth Presbyterian Church, and be $1 million or more. What size does a bequest need to be?

10. How do I put it in my will? • Unrestricted: • I give the sum of $________ to Fourth Presbyterian Church of Chicago, located at 126 E. Chestnut Street, Chicago, Illinois, 60611 to be for its general purposes (or describe a specific purpose, like CLL, if desired). • Restricted: • I give to the Fourth Presbyterian Church of Chicago, located at 126 E. Chestnut Street, Chicago, Illinois, 60611 the sum of $____________ to be used as a permanent endowment, the income only from which shall be used for its general purpose (or describe a specific purpose).

11. What should I state in my will? • The entity to which you are making the bequest (Fourth Presbyterian Church of Chicago or CLL) • The amount of the gift, or percentage of your estate or contingency • If the gift is restricted and/or designated, • You must state the specific purpose the gift is to be used for • You should include a provision for the event your gift cannot be used for that stated purpose, commonly known as “safety language”

12. Should I notify anyone? • Yes! At a minimum: • Executor of your estate • Your family • Your attorney and/or financial planner or advisor • Best practice is to also inform a charity if your intent is to make a bequest

13. Can you recommend a lawyer? • No. However, at your place is a card which lists: • The Chicago Bar Association’s Attorney Referral Service phone number, email address and website • The Financial Planning Association Referral Service phone number and online interactive referral website address

14. Are there any drawbacks for me? • No! Here are some advantages: • You get to make a gift without sacrificing current income • You will make a difference in the mission of the CLL or other charitable organization • By letting the charity know, you will be appropriately thanked and recognized

15. Question & Answer

16. Thank you! • Planned giving brochures available • Handout with sample bequest language and resources for legal and financial planner referrals is at your place • If you have questions later, or would like to speak privately, please take my card and feel free to call: 312.981.3380.