Planned Giving Basics Philip Ellis Community Foundation Dave

Planned Giving Basics Philip Ellis, Community Foundation Dave Eitland, Grand Traverse Bay YMCA September 22, 2011 12: 00 noon – 1: 30 pm

Goals for Our Presentation As you are very busy, we want to: • Give you a sense of the what to do when you get your first planned gift. • Give you the basic elements, vehicles, and marketing of planned giving • Give you want you need to get started • Point you to other resources

Who are we? Phil Ellis • Executive Director, Your Community Foundation • Ph. D. in Clinical Psychology • Clinician and Administrator of Pine Rest Christian Mental Health Services – 25 years • Executive Director - Pine Rest Foundation – 3 yrs • $20 million Foundation • Married to Barbara (Jordan) Ellis, leadership consultant Dave Eitland • Director, Development & Marketing, GT Bay YMCA • B. A. in Political Science • 25 years in professional philanthropy & implement dreams as consultant, staff manager, and volunteer • 15 years in planned giving • Trained financial planner • Married to Katheryn King, Episcopal Priest (Lutheran)

Either today or tomorrow it’s going to happen! • You learn that someone has left you $500, 000! • What will you do? !

Best Option: Go to your gift acceptance policy to determine what you do with unexpected gifts… How current is your organizations gift acceptance policy? A gift policy accepted by your board in advance will provide direction on how to deal with extraordinary giving!

Planned Gifts • Often are unexpected • Likely a past donor • Frequently are designated • Come from and with donor’s intent • Often given to several causes/orgs

Planned Giving/Gift Planning Planned giving is a means of “leaving a legacy”. – Planned Gifts are frequently assets that are fully realized upon donor’s death – A way of leaving a lasting impact upon a cause or organization near to a donor’s heart – Assuring continuation…the future

Basic funds needed by charities: A Balancing Act • Current and Operational funds • Special capital needs based on growing organization to fulfill its mission • Quasi-endowments – “raining day”, reserve funds, or set aside • Endowments – long term health and continuing mission – helps to temper the ups and downs of funding – planned giving works for endowment building and long term mission needs

Why donors give to endowments • Perpetuity…the “legacy factor” • Desire for the long-term health of the organization. . . the “sustainability factor” • Concern for the use over time…the “confidence factor” • Encouraging others to give…the “investment factor”

Organizational or Community Foundation (CF) Endowment Some donors want to give to an organization…directly – Gets immediately to the organization – Confidence in the organization’s ability to steward these resources – Confidence in the organization’s capacity for investment and managing larger funds

Organizational or CF Endowment • Some donors prefer to give through CF – Confidence in CF ability to invest and manage larger sums of money – Confidence in the perpetuity factor—legal underpinnings of an endowment fund – Able to make planned gift to one entity with several beneficiaries – CF are known for endowments – Confidence that it really is an endowment

Critical: Understanding Donor Intent!! Questions to consider …. • What is the donor really giving to? • For what purpose? • Immediate? Short-term? Endowment? • Does the purpose have a “shelf life”? • Why does the donor want to make the gift in this fashion? • Does the gift allow for any flexibility in the future? • What happens if your organization changes its mission? • How will the donor be recognized? - Will it be forever? • Will their family know of the gift? In this day and age, donor intent needs to be in writing, part of any gift agreement, and secondary documented (digital recording? ) depending on the gift.

Why Would You Say NO? GIFT • Are there gifts we should not accept? • Is it aligned with our vision and mission? • What does our gift policy say in this instance? • Are there gifts we cannot accept? • What contingencies and restrictions are on this gift? • Too complicated? – For us … For anyone • What will it cost us? Legal problems? • What is the environmental impact?

Tools for Giving

Tools for Giving • You as a charity provide information on planned giving for only educational purposes. • Donors must consult with their professionals (financial planners, CPAs, lawyers, trust officers, etc) for tax, future obligations, and future needs of the donor. • What is the charity’s overhead on a gift?

Tools for Giving Concerns & Factors for giving: – Self and future care/health needs – Spouse/Partner and future care/health needs – Special Need Children – Children & Relatives (sometimes) – Faith Community (if a believer) – Charity Order of this list depends on donor.

Tools for Planned Giving: In order of frequency for non-PG staffed development shops 4 types of tools • • • Cash (always works) Beneficiary designations Stuff - Personal property (things to convert to cash) • Income options - To donor - To organization

Donor Benefits Some of the benefits depending on the tool • Reduced Estate Tax • Reduced Income Tax • Reduce or Eliminate Capital Gain Tax • Income back from Gift • Give an asset but keep on enjoying it Source: The Ultimate Quick Reference Planned Giving Pocket Guide, Planned. Giving. com

Beneficiary Designations • • • Bequests Life Insurance Retirement Plans Assets (IRA*) Securities & Annuities Savings Accounts & CD’s Real Estate & Titled Stuff – Watch implications of Fractional Interests. *Some IRAs will come to beneficiaries as straight, taxable income. Fills out form or document to make gift ABC Charity Source: The Ultimate Quick Reference Planned Giving Pocket Guide, Planned. Giving. com

Stuff conveyed either before or at the time of the estate distribution • • Giving appreciated real estate or vacation property Personal property – Artwork, precious metals, collectables, equipment, vehicles, boats, timber, farms, livestock, mining rights, oil and gas rights, inventions, mission related gifts that can be used directly by your organization Paid up life insurance policies – Life insurance arrangement to take ownership now, donor gives gift to pay for premium Retained Life Interest – Give real estate but reserve the right to use it for life MAKE SURE THE CHARITY WANTS THE GIFT! Fills out form or document to make gift, or gives outright ABC Charity Source: The Ultimate Quick Reference Planned Giving Pocket Guide, Planned. Giving. com

Income producing gifts Provides the donor an income stream for donor • Charitable Gift Annuities – Immediate, deferred, or flexible • Charitable Remainder Annuity Trusts • Charitable Remainder Unitrusts • Pooled income funds Created in 1969 by the Government and all are legal. Source: The Ultimate Quick Reference Planned Giving Pocket Guide, Planned. Giving. com

Marketing the Planned Gift

A Simple Plan • • • identify your prospect group all pledge cards/return envelopes – mention wills P. S. Have you considered putting <charity> into your estate plan? website and make it visible – make sure EIN is visible and use sample language charity newsletter articles with donor stories consider a newsletter/web service purchase a set of brochures with charity’s name on it. identify a list for postcards and send ideas for giving. – http: //bit. ly/f. RLn. PN buy planned giving software. Join the Partnership for Philanthropic Planning do it over and over … • Your first planned gift will more than pay for any expense!

A Simple Plan Structural Issues • Board’s Role – Planned Giving Committee • • Board Members Community Champions Knowledgeable “skill-holders” Champions/Proponents/PG Givers-Investors • Community Resources • Knowledgeable “skill-holders” • Communication vehicles

Marketing Planned Giving http: //www. leavealegacy. org/ultimategift_vid eo. asp PSA video http: //myarmygift. com/ Salvation Army reply form

Unforgettable http: //www. leavealegacy. org/Media. Center /Docs/poster_petgroomer. pdf Poster

Forever • Planned Giving provides for the future – Forever – Next generation – A project – Assurance of one’s philanthropic intentions • Our largest gift is likely to be our last • This is the gift that we’ve always wanted to give • Assuring that we supported in life, we’ll support after our death…pretty cool! Contact us: Phil Ellis, 231 -935 -4066, pellis@gtrcf. org Dave Eitland, 231 -933 -9622, dave@gtbayymca. org