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Tri State - Introduction to Legacy Giving Options and Strategies

Tri State - Introduction to Legacy Giving Options and Strategies. James E. Connell FAHP, CSA Charitable Estate and Gift Planning Specialists P.O. Box 3335, Pinehurst, NC 28374 Email: james@connellandassoc.com Internet: www.connellandassoc.com.

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Tri State - Introduction to Legacy Giving Options and Strategies

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  1. Tri State - Introduction to Legacy Giving Options and Strategies James E. Connell FAHP, CSA Charitable Estate and Gift Planning Specialists P.O. Box 3335, Pinehurst, NC 28374 Email: james@connellandassoc.com Internet: www.connellandassoc.com Copy of this presentation in PDF format available at: http://www.connellandassoc.com/Tristateafp

  2. Snoopy and the IRS • The “Silver Tsunami” is coming…is coming! • In 2030 – 72 million over age 65

  3. Your Goals

  4. Rules of the road to success in planned giving • 1. If you are not asking our prospect for planned gifts, some else is • Eventually that some else will steal your cash gifts too • 2. Cash starved times are the best times for planned giving • 3. Charities who even dabble in planned giving eventually ear 50% to 100% more than those who don’t

  5. Rules of the road to success in planned giving • 4. Typical planned gift is 200 to 300 times the size of a donor’s largest annual gift • 5. Planned gifts do not have to affect the prospect’s cash flow • 6. Prospects are eager to make a planned gift, but simply don’t know how • 7. Prospects making gifts through their wills typically increase their annual support

  6. Demographic will drive charitable giving • 80% of Americans engage in charitable giving each year • Only 5-6% of those over 50 have a charitable estate plan in place • Donors of $500 or more -only 1/10 have charitable bequest • 7-9% of taxable estates have a charitable plan/gift • Fewer estates are subject to estate taxes • 2019 exempt amount for single person is $11,400,000 • 13% of your loyal donors have a will with a charitable gift • 35% have no will yet but would anticipate including a charitable gift • Bequests & legacy strategies are the fastest growing segment of American philanthropy

  7. Planned giving metrics and ideas • Established planned gift programs generate annually between 20% to 25% of total fund raising revenue from bequests and deferred gifts • Science shows us telling stories is one of the most powerful things we can do to change attitudes and influence peoples giving habits • Russell James studies

  8. Planned giving metrics and ideas

  9. “Planned gift” defined “A voluntary gift, of any kind, in any amount, either current or deferred, that requires the assistance of a qualified volunteer, professional staff person, or the donor’s own advisor(s) to help complete the gift.” (Robert F. Sharpe, Jr.) www.sharpenet.com

  10. Planned giving or gift planning? • Focus is on the “planning” of the gift • Offers significant potential for both deferred ANDcurrent gifts • Supplements current giving of donors • does not replace or cannibalize it • Completes gift “toolbox” for your donors • on equal footing with other charities • Often misunderstood and underappreciated • Expands gifting options for donors

  11. Traditional VSLegacy Giving • Tell donor about current needs that are real and urgent • Donor gives on the basis of a specific ask • Donor makes immediate gift or pledge • Ask donor what their needs and goals are • Donors give because of their values • Donors need time to plan how they will structure their gift and accomplish their personal, financial and estate objectives

  12. Traditional VSLegacy Giving • Donor’s gift is from their income • Approach used involves • List of current projects, programs and needs • Identification of prospect • Cultivation of prospect • Ask for gift • Donor’s gift is from their assets • Planned gift approach begins with identification of those who already have • Ownership • Gift history • Leadership or volunteer history

  13. Philanthropy has many faces • Communitarian 26% • Devout 21% • Investors 15% • Socialites 11% • Repayors 10% • Altruists 9% • Dynasts 8% Source: Russell Prince study

  14. Lifetime predictors of post-mortem charitable bequests • 1. % of giving years • 2. No offspring • 3. Highest giving • 4. % years reporting funded trust • 5. Female • 6. Last reported wealth • 7. Not married • 8. Last reported giving • 9. Growing wealth • 10. % of years volunteering • Source: American Charitable Bequest Demographics 1992-2012, 26,000 participants

  15. Barriers to philanthropic planning • Prospect emotional barriers • Not wanting to relinquish control • Fear of facing death...indecision • Fear of what children will think • Analysis paralysis

  16. Barriers to philanthropic planning • Resistance of advisors • poor knowledge or expertise • planning bias • no personal giving • Only 14% of advisors understand the power of charitable planning for their clients • Fidelity charitable study

  17. Three categories of gifts Outright gifts – irrevocable gifts of entire interest made today (cash or assets) Expectancies – revocable gifts committed for the future use (bequests & beneficiary designations) Split-interest gifts – irrevocable gift arrangements which give a portion to charity and a portion to a non-charitable beneficiary

  18. Stages of our financial life Senior Retirement Lifestyle Retirement Distribution Pre Retirement Early Retirement Conservation Motivation Accumulation Net Worth

  19. Life cycle giving Financial Life Charitable Life

  20. Planned giving at any agehttps://giving.duke.edu/ways-to-give/gift-planning/gift-planning-resources/gift-planning-at-any-age/

  21. Planned giving at any agehttps://giving.duke.edu/ways-to-give/gift-planning/gift-planning-resources/gift-planning-at-any-age/

  22. Planned giving at any agehttps://giving.duke.edu/ways-to-give/gift-planning/gift-planning-resources/gift-planning-at-any-age/

  23. Planned giving at any agehttps://giving.duke.edu/ways-to-give/gift-planning/gift-planning-resources/gift-planning-at-any-age/

  24. Planned giving at any agehttps://giving.duke.edu/ways-to-give/gift-planning/gift-planning-resources/gift-planning-at-any-age/

  25. What gifts can do for you

  26. What gifts can do for you Key: CGA – charitable gift annuity CRT – charitable remainder trust, CRUT – Unitrust, CRAT Annuity trust, NICRUT – net income makeup unitrust, Flip-CRUT PIF – pooled income fund

  27. Cash Securities Bonds - Corporate Bonds - Municipal Bonds - US Savings Real Estate residence vacation home investment property Mutual Funds Life Insurance Variable Annuity Personal Property Business Interests S - corp C – corp Retirement Assets IRA Keogh Pension & Profit Sharing plans 401k, 403b plans Types of gift assets

  28. Starting line for planned gifts • 1. Get your board on board so your ensure long-term support for program efforts • Engage a planned gift champion • Establish volunteer committee • Establish benchmarks for success • 2. Develop infrastructure • Gift acceptance policies and procedures • Counting and recognition policies • Stewardship plan • 3. Action steps • Initial marketing plan • Identify, rate and segment your prospect pool

  29. 15 Commandments of legacy givingSource: https://www.donorsearch.net/planned-giving-best-practices/ • 1. Build a strong team • 2. Form an advisory committee • 3. Brand your program • 4. Learn how to identify prospects • 5. Include age in your donor records • 6. Go to your board for early involvement • 7. Begin with bequests • 8. Communicate consistently

  30. 15 Commandments of legacy givingSource: https://www.donorsearch.net/planned-giving-best-practices/ • 9. Incorporate planned giving into pre-existing promotions • 10. Find quirky ways to market • 11. Offer educational opportunities • 12. Emphasize that your program has staying power • 13. Ask planned giving donors to provide testimonials • 14. Make it easy to start a planned giving dialogue • 15. Give donors the lead in choosing how their funds will be allocated

  31. Indicator grid for building a list of friends to be interviewed • Linkage – who is the logical connection • Interest – program or project they are fond of • Age – logic tells us to work with the oldest first • Signals – verbal, mail, personal indications of an ownership connection • Values – personal and family concerns about their health, finances and welfare • Ability – indicated or hidden net worth, personal social capital

  32. Indicator grid for building a list of friends to be interviewed • Age • 60+ planning for retirement • 62 early retirement drawing social security • 65+ hit normal retirement age for social security • Working retired folks can make as much money as possible • 70 last age - must take social security • 70½ hit required minimum distribution (RMD) stage • 75+ planning for alternative housing • 80 - 85 senior retired • Difficult to change estate plan

  33. Indicator grid for building a list of friends to be interviewed • Lifestyle considerations • Single • Never married, divorced, widowed • Couples without children • Couples with successful children • Females – studies show females outlivemales and are more likely to leavean estate distribution

  34. Categories of best prospects – Other A. Inquiries from your efforts B. Inquiries from other’s efforts C. Donors to similar charities D. Referrals by leadership E. Referrals by volunteers F. Referrals by donors Who are the best probable donors?

  35. Working with older donors • 1. Most older prefer printed material to being asked to visit your website. • Not everything should be done electronically • Print material has staying power • 2. Written materials should contain a short summary of gift options. • 3. On initial visit with older donors provide some background about yourself first.

  36. Working with older donors • 4. Older donors may have difficulty hearing but their memories may be sharp. • 5. If you believe a donor may not be mentally competent, be cognizant of how you would want your loved ones treated.

  37. Working with older donors • 6. Be patient, ask a question and wait for a response. • Listing is a learned skill • 7. Listen carefully during any visit and make notes later. • If you need to take notes ask for permission • 8. Avoid creating a sense that a visit or call is an “inquisition.”

  38. Working with older donors • 9. In cases where there are technical aspects to a gift, be certain to advise donors to seek the assistance of their advisors. • Learn the names of advisors and record them in their record • Advisors will kill more than help your suggestions • 10. If the donor is single or their marital status is ambiguous, leave it to the donor to bring up the subject.

  39. Working with older donors • 11. If the donor is married and both are present, don’t speak to or look at just one. • Females will most likely be the distributor of estate assets. • 12. Always send a handwritten thank-you note after any visit. Source: Lewis von Hermann, in Shape “Give and Take”, April, 2015

  40. “Donor Journey” applied to Planned Giving • How do you create awareness? • When to move to exploration? • How to expand the suggested options? • Getting and retaining commitment. • Keeping commitment to the end.

  41. Introduction to Legacy Giving Options and Strategies

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