Category

Planned Giving

Tax Reform: What’s the Nonprofit Sector Saying?

By | Commentary, Current Events/News, Legislative + Advocacy, News You Can Use, Planned Giving | No Comments

Heather Ehlert, Vice President of Client Services

Whether seeking to end the federal estate tax or adopt a universal charitable deduction – both of which are being discussed by the current Administration and Congress – tax reform is tricky.  While it’s difficult to predict the exact impact these changes would have on charitable giving and nonprofits, we can reasonably conclude they would affect our sector. There’s a lot at stake with tax reform, and nonprofit professionals need to stay abreast of these public policy issues.

Our sector is fortunate to have a number of highly competent bodies monitoring situations like this and advocating in support of nonprofits. For example, Dr. Patrick Rooney, Executive Associate Dean for Academic Programs, Professor of Economics and Philanthropic Studies at the Indiana University Lilly Family School of Philanthropy and a key participant in the research and writing of Giving USA: The Annual Report on Philanthropy, wrote an article that was recently published on The Conversation.

In his piece, “How closing the door on the estate tax could reduce American giving,” Dr. Rooney illustrates how the estate tax is a significant revenue generator for the U.S. government and the charitable sector – specifically bequests, which accounted for 8% ($30.36 billion) of total giving in the United States in 2016 (according to Giving USA 2017: The Annual Report on Philanthropy for the Year 2016.) He provides an analysis of what could happen after a repeal of the “death tax” and notes the fiscal consequences to federal revenue (a reduction by nearly $270 billion within a decade, according to a bipartisan congressional committee) and the estimated ranges of decline in charitable giving (both bequest and non-bequest giving.)

The Congressional Business Office estimated a 6% decline in charitable giving if the estate tax was repealed.  But that analysis was way back in 2004, and a much different scenario exists today.  Other studies estimate a decline of between 12% and 37%, but Dr. Rooney feels these figures probably underestimate the actual effects of a repeal, and walks us through what actually happened in 2010 when the estate tax was temporarily paused to support his hypothesis.  He concludes that if the estate tax was eliminated, giving to charity would be negatively impacted – by reducing giving both during and after donors’ lifetimes. Be sure to check out Dr. Rooney’s full article on The Conversation.

As nonprofit professionals, philanthropic leaders and American citizens it is also our duty (and privilege) to interact with, educate and influence our representatives in government. There are many ways you can advocate for the philanthropic sector. If you’re interested in learning more, check out Jeffrey Byrne’s piece on Advocacy in Philanthropy from the JB+A archives.

Essentials to Starting a Planned Giving Program

By | All Posts, Fundraising, News You Can Use, Planned Giving | One Comment

John Marshall
Senior Vice President

Over the years, I have had the opportunity to speak with many organizations about the merits of including Planned Giving as a component of their overall fundraising program. These have been organizations that were primarily in the process of considering the addition of Planned Giving but were somewhat hesitant to “take the plunge” for any number of reasons. Mostly, such hesitancy was due to their lack of understanding about this unique fundraising opportunity as well as their uncertainty about how to get started.

I have always maintained that every nonprofit should include Planned Giving in its fundraising universe in some fashion. It could be as minor as placing the words “Have you considered leaving our organization in your will?” on the bottom of your organization’s letterhead.

If you are at that stage where you believe now is the time to get started, allow me to offer up what I feel are five essentials for you to consider as you start the process.

  1. Make certain your Board and senior staff understand Planned Giving and are FULLY SUPPORTIVE.

Patience is absolutely required and the organization’s leadership will need to understand that planned gifts do not instantaneously materialize. They take time to be properly cultivated and may not be realized for quite some time. It is important leadership understand that planned gifts are what will help sustain the organization over the long run and can provide the resources required to create the “margin of excellence” every nonprofit desires.

  1. Identify your target audience.

“Aim at nothing and you will hit your target every time” is a phrase that was drilled into my head very early in my career. You must develop a cultivation list of those who are likely to be responsive to your organization through the various opportunities of Planned Giving – usually those who have a history with the organization and who have shown loyal financial support for an extended period of time. Those to consider for your cultivation list should include:

  • Consistent donors. Giving for five or more years or those who have given $1,000 or more at any time
  • Current and former Board members
  • Current and former volunteers
  • Current and former staff

And when considering who to identify, remember the letters F-L-A-G:

  • Frequency
  • Longevity
  • Age
  • Gender (women tend to make more bequests….men make more planned gifts by way of trusts)
  1. Determine which Planned Giving vehicles you can most comfortably offer and manage.

Please don’t promote to your constituents an opportunity you cannot manage/deliver. If you simply want to start by dipping your toe into the pool, encourage participation by way of a bequest. If you wish to take a more proactive approach, then consider the following:

  • Charitable Gift Annuity
  • Charitable Remainder Trusts
  • Life Insurance
  • Charitable Lead Trusts
  • Life Estate Contracts

If you decide to be more comprehensive in what you offer, I heartily recommend that you go to great lengths to enlist the support of professionals who can advise you in any number of ways to ensure that you are providing accurate information to your constituents. I have always recruited what I refer to as a PAC group…..Professional Advisory Committee consisting of those whose expertise relates to the estate planning arena. (Attorneys, Estate Planners, CPAs, Real Estate Agents, Life Underwriters, etc.).

  1. Determine how you will promote Planned Giving.

If you envision promoting your Planned Giving program in more ways than simply including the aforementioned sentence on your letterhead, you might want to create a promotional program which could include:

  • Direct Mail
  • Newsletters – include an article in your main newsletter (possibly with a testimonial from a donor)
  • Seminars – an opportunity to invite the professional community to participate
  • All of the above
  1. Make certain to pay particular attention to internal management issues.

It is essential that you have all your ducks properly lined up, otherwise, unwanted cracks in your Planned Giving program floor may start to appear. Consider the following:

  • Personnel: who will be assigned oversight for the Planned Giving program?
  • Budget: the creation of a separate and appropriate Planned Giving budget
  • Policies and procedures should be created to establish the types of planned gifts that are and are not acceptable, gift limitations, donor confidentiality, etc.
  • Buy-in from the finance department: developing a solid relationship with your finance department in an effort to ensure clarity of understanding on policies and procedures as well as communication and accounting for deferred gifts

Taking the plunge into Planned Giving should be accomplished only after very careful consideration occurs among the organization’s stakeholders/decision makers. Properly orchestrated, the Planned Giving program can provide wonderful benefits to your donors today and to your organization in the future.

John F. Marshall is Senior Vice President with JB+A, Inc. with more than 40 years of fundraising development experience and expertise. You can contact him at jmarshall@fundraisingjba.com or call him at 816.237.1999.

Register Now for JB+A’s Latest Workshop

By | All Posts, Annual Giving, Campaign Planning + Management, Events, Major Gift Solicitation, Planned Giving | No Comments

Register now for

Tools for Fundraising Success
Building an Integrated Fundraising Program

Friday, August 26, 2016 

This hands-on workshop will detail best practices and step-by-step techniques for creating and implementing an integrated fundraising program that will transform your organization.

**All attending organizations will receive two hours of complimentary fundraising consultation from JB+A.**

8:00 a.m. – 12:00 p.m.
Friday, August 26, 2016
Bishop Spencer Place, Westport Room
4301 Madison Avenue, Kansas City, Missouri

This workshop is intended for Executive Directors, Development Directors, Chief Development Officers, Board Members and Fundraising Volunteers.

The workshop price of $99 admits you and one guest.

Call 816.237.1999 or click here to register.

The Need for Estate Planning

By | All Posts, Donor Cultivation, Fundraising, Insights, News You Can Use, Planned Giving, Stewardship, Strategic Planning | No Comments

John+Marshal+for+webJohn F. Marshall, Senior Vice President

Really successful Planned Giving officers are those who understand how important it is to impress upon their organization’s donors the need to engage in good, thoughtful estate planning. And, estate planning is far more than just creating a will, although that is normally a cornerstone to creating one’s estate plan. They also understand that when addressing estate planning with donors, the “cookie cutter” approach does not apply. “One size does not fit all.”

As you consider addressing estate planning with your organization’s donors, keep in mind that estate planning is also not a do-it-yourself undertaking. Critical decisions will need to be addressed by the donor which will often require input from a professional estate planner. Helping your donors begin to understand estate planning can start with a simple definition:

“Estate planning is the process of thoughtfully providing for the efficient transfer of one’s assets to their heirs and charitable interests in full accordance with their wishes.”

Once crafted, the well thought out and constructed estate plan, in addition to how one’s estate will be distributed, affirms what kind of legacy an individual will leave behind and the impact it will have on future generations.

Estate planning is not just for the rich or older people. Everyone should be engaged in this important undertaking. It can certainly begin by writing a will, but estate planning can also involve:

  • trusts
  • changing beneficiaries of life insurance policies and retirement accounts
  • selecting guardians for minor children
  • providing lifetime giving for oneself or others
  • minimizing taxes and other estate settlement costs
  • much more

As stated earlier, “One size does not fit all,” and this truly needs to be addressed with your donors. There are likely going to be many complex issues to be identified and discussed. You can be most helpful by suggesting they give special attention to:

  • taking a complete inventory of their personal property and assigning realistic values to the assets
  • making a list of their intended beneficiaries and noting any characteristics that may determine the method and circumstances according to which certain assets are assigned
  • making certain the spouse is “in the loop” with regard to plans; such coordination can lead to additional savings for the estate, and it can make great sense for one’s plans to be shared with as many family members as possible
  • and importantly — providing complete information to their estate planner to ensure that one’s final wishes are accurately and ultimately fulfilled

Lastly, it is important to keep in mind that stewardship and estate planning go hand in hand. Good stewardship is a lifestyle and a process, not just isolated actions or individual events. The successful Planned Giving officer understands this and will strive to assist donors towards making thoughtful decisions about their estate, decisions that can create a lasting legacy of caring and compassion.

Are you interested in learning more about Estate Planning? JB+A can help you and your organization promote Planned Giving to your constituents. Contact John F. Marshall at jmarshall@fundraisingjba.com or call 816-237-1999.

People Give to People – Especially in Planned Giving

By | All Posts, Donor Cultivation, Fundraising, Major Gift Solicitation, Planned Giving | No Comments

John+Marshal+for+webJohn F. Marshall
Senior Vice President

In fundraising, we often hear the words “people give to people.” Donors and prospects are more likely to give when they are comfortable with and feel good about the person who is presenting them with a request — perhaps a university alum, a grateful patient or a supporter of the arts. But what exactly does this tenet mean in the world of Planned Giving?

Have you ever wondered just how that “superstar” Planned Giving Gift Advisor seems to be successful far more often than not? That person probably has a very strong grasp on what causes their audience to be satisfied with the manner in which they have been encountered. He or she has learned that donors are most satisfied when a Gift Advisor does the following:

  • Takes time to discuss giving with them in detail
  • Asks questions and most importantly, listens to the responses
  • Explains the giving plan simply and limits complex options
  • Talks far more about life (and not death)
  • Treats the plan as a giving tool rather than as a product to be sold
  • Knows when to look for additional assistance and does not try to come off as an “expert” on all aspects of Planned Giving

I’ve had the pleasure and privilege of working with many different people – ranging from staff to volunteers to prospective donors to donors – in Planned Giving. Over my many years in this field, I’ve noticed the most successful Planned Giving Gift Advisors display the following characteristics:

  1. Solid Communication Skills
    They excel in both verbal and written communication. They are persuasive, concise and articulate. They are well-versed in the Case for Support — familiar with it front to back and have the ability to convincingly present organizational needs. They are good listeners and closers.
  2. Organization and Prioritization
    They have the ability to manage a number of tasks at the same time and are comfortable and successful in handling the fast-paced and challenging nature of fundraising. Seldom, if ever, do they become “overwhelmed.”
  3. Relationship Building
    They are skilled in encouraging a long-term commitment to the organization. They are able to develop a high level of trust with the donor, which can lead to additional giving. They understand the need to avoid becoming overly involved in the personal side of the donor relationship (as this is difficult to emerge from unscathed.)
  4. A Persuasive Presenter
    They are extremely adaptable to their audience and equally persuasive and enthusiastic — whether presenting to a prospective donor, a church group, community groups or their own organization’s leadership team.
  5. Effective in Managing the Donor
    They are very sensitive to serving the needs of the donor, but within reason. They ensure the donor is happily satisfied with his/her gift and its benefits. They remain attentive to keeping the donor informed about the organization.
  6. Being Opportunistic/Proactive
    They possess the ability to identify an opportunity and create a strategy to act upon it. They do NOT procrastinate – this is simply not in their DNA.
  7. Enthusiastic and Committed
    They are successful in conveying true enthusiasm for and commitment to the Mission of their organization, because failure to do so will likely result in less than the desired outcome or no outcome at all.

Highly skilled Planned Giving Gift Advisors are “transformers” in that they are consistently able to make the difference between the organization receiving a nice gift or a transformative commitment.

For more information on developing “Transformative” Planned Giving Gift Advisors for your organization, contact John F. Marshall at 816.914.3780 or at jmarshall@fundraisingjba.com.

Donor-Advised Funds: Parking or Philanthropy?

By | All Posts, Annual Giving, Commentary, Donor Cultivation, Fundraising, Grants, Insights, News You Can Use, Planned Giving, Prospect Research, The Giving Institute | No Comments

Jeffery Byrne

Jeffrey D. Byrne
President + CEO

The Giving Institute recently hosted its Summer Symposium in Boston, and I attended a very informative session on “The Charitable Landscape and Donor-Advised Funds” presented by Matt Nash, a Senior Vice President with Fidelity Charitable. I felt the presentation made a good case for donor-advised funds, and has helped me re-shape my thinking around this giving vehicle.

As fundraisers and nonprofit managers, we know donor-advised funds (DAFs) have been a part of American philanthropy for decades. We’ve also undoubtedly noticed (perhaps with some chagrin?) that DAFs are quickly becoming more and more popular vehicles for charitable giving. Their role in shaping the charitable landscape has grown dramatically over the past two decades and we can only expect this trend to continue. Many of us have probably also wondered how to “crack the DAF nut” – how to successfully secure this type of funding and connect with the seemingly anonymous individuals behind the mechanism. Since 1991, Fidelity Charitable has operated as an independent public charity and currently sponsors the nation’s largest DAF program. Its mission includes programming to make giving simple and effective. So how do they do that through a funding mechanism that feels like an enigma, and what are the benefits – to both donors and nonprofits?

I learned a lot about the state of DAFs from Matt’s presentation. For example, Fidelity Charitable holds nearly $15 billion in assets in more than 72,000 DAFs (Fidelity Charitable calls them Giving Accounts) which are held by more than 119,000 individuals (known as donors). The average age when opening a DAF is 54 and the current donor age is 62. Donors establish Giving Accounts as they approach retirement age, and 62% of Fidelity donors say they are using these donor-advised funds as a way to sustain giving through retirement. It is also interesting to note that more than half of Fidelity’s donor contributions were non-cash assets and 3/4 of donors say the ability to donate such assets is a reason for setting up their fund. In 2014, more than half of contributions were made with non-cash assets.

Fidelity Charitable is the second-largest grant making entity in the United States, after the Bill & Melinda Gates Foundation. In 2014, it awarded $2.6 billion in donor-recommended grants to 97,000 charities. The total amount granted by Fidelity has tripled over the past 10 years, as has the number of grants of $1 million or more. In the first six months of the 2015 calendar year alone, Fidelity has set a record with its 310,000 donor-recommended grants.

Once assets have been contributed to a Giving Account, they can be invested for short- or long-term giving goals. Donors can recommend an investment strategy that aligns with their own charitable goals and time frames, and potentially grow their charitable dollars tax free. And most DAF participants list tax benefit as a motivation for using a DAF. Is this “parking” funds? Perhaps. But isn’t it also empowering philanthropy? Absolutely! There is a correlation between investment growth and grant making. Fidelity reported its assets rose from $12.8 billion to $14.9 billion in fiscal year 2014. Grants rose 32% over the previous year. While the average grant size remains consistent, the number of grants per Giving Account continues to grow. And most contributions to Fidelity Charitable are granted out to charities within 10 years.

The median Giving Account balance is just over $16,000, and 60% of Giving Accounts have balances under $25,000. But more than 5,500 accounts have balances upwards of $250,000. The majority of grants were recommended online and Fidelity offers a free, online tool (the DAF Direct Widget) that nonprofits can add to their websites, helping donors recommend grants directly from the charity’s website. Donors are also taking advantage of being able to pre-schedule their giving, and pre-scheduled grants make up about 1/5 of outgoing grants from Fidelity. And contrary to some perceptions, most grants–92% of them–are not anonymous, but include names and addresses for acknowledging the gift.

Consider these takeaways when navigating the world of DAFs and meaningfully engaging DAF (and ultimately your organization’s) donors:

  • Flag the DAF and gifts in your donor database
  • Recognize the donor in stewardship, not the DAF sponsor
  • Seek to engage the donor, even if the initial gift is small
  • Be sure to include DAFs in your organization’s “Ways of Giving”

And remember, most donors complement their DAF giving with cash giving; often times, the DAFs are used in strategic and larger giving, while cash or cash equivalent gifts are used for smaller donations and more casual giving. DAFs are becoming increasingly more popular and nonprofits should recognize and work with DAFs and their donors as ways to strengthen philanthropy.

JB+A’s John Marshall at the Mid America Planned Giving Council’s 20th Annual Building Blocks Planned Giving Conference

By | All Posts, Events, Organizational + Personal Development, Planned Giving | No Comments

Friday, August 14: Be sure to attend the Conference and catch John’s session The Charitable Gift Annuity: What?…Who?…Why?

John will share a comprehensive presentation focusing on

  • the benefits of a CGA to the donor, beneficiary(ies) and the charity
  • the types of CGA’s
  • the tax benefits
  • determining the payment rates
  • review of two CGA illustrations

Register Now