October 21 through 27 is
National
Estate Planning Awareness Week, a special time of year when we pause to
consider a subject that warms a gift planner’s heart: wealth transfer. In 1999,
Paul Schervish and John Havens, of Boston College, released their conservative
estimate that $6 trillion would be transferred to charity via bequests between
1998 and 2052. The nonprofit community has been working and watching for those
bequests ever since. But in an interview
with The Journal of Gift Planning in
2006, Paul Schervish noted, “We’ve said from the beginning that people from the
nonprofit world and donors could make our predictions invalid by shifting
giving from estate to lifetime giving.”
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| Courtesy of Flickr Creative Commons |
Paul is an honorary
co-chair of National Estate Planning Awareness Week, and when I called to
congratulate him, he reminded me that the very detailed microsimulation model
that yielded the wealth transfer projections was a product of the 1990s, when
estate plans really were the conduit for most large planned gifts. “Financial
planning is a place where charitable planning tends to happen now,” Paul told me.
In the near future, he and John Havens will publish a new national study that
is expected to show the trend toward inter vivos wealth transfer for high net
worth Americans. He’s optimistic that wherever transfers are structured,
charities can expect to see increased giving. “When people have more to give,
and they have a choice between giving more to their heirs or to charity, we
already see a tendency to give more to charity,” Paul told me. “It’s really all about the economy—is it
operating in a way that allows people the maximum ability to give?”
If financial planners
and accountants become the primary gatekeepers for charitable giving, where
does that leave us during National Estate Planning Awareness Week? Even low net
worth people give to charity, and we know that bequests from smaller estates
are still an important source of income for most charitable organizations. Gift
planners still need the “legacy ask,” and they need supportive estate planners
advising people of all wealth levels.
At the National Conference on Philanthropic Planning in a few weeks, the Stelter Company will present the
results of a new survey
of advisors who hold the Accredited Estate Planner® (AEP®) designation. That
study finds that many advisors are quite willing to collaborate with charitable
planners, although not necessarily in the ways traditionally preferred by the
charitable planners. The most fruitful areas for collaboration, according to
advisors, are:
- Showing
clients they are willing to work as a team to formalize a planned gift (53% are
interested in this)
- Raising
awareness of estate planning (51% are interested in this)
- Explaining the tax advantages of planned gifts (47% are interested
in this)of pla
AEP®s surveyed in the Stelter study were less interested in receiving
the following assistance from nonprofit planners:
- Raising
awareness of the importance of planned gifts (38% are interested in this)
- Receiving
technical information on planned gifts (33% are interested in this)
- Ongoing
assistance in analyzing gift transactions (31% are interested in this)
- Assisting
the advisor on language to be included in documents (31% are interested in
this)
Paul Schervish would say that one thing charitable planners can bring
to estate—and financial—planning is their skill in facilitating “discernment,”
which he defines as a process of “conscientious self-reflection” that helps to
balance material quantity of choice with spiritual quality of choice.
Fundraisers seldom have the access to a donor’s financial condition that
advisors have, so they should view this balancing act as a collaborative
process. “People need to understand their financial capacity first, and then
how their personal history motivates them to care for others,” Paul explains. “Discerned
giving is bigger than ‘planned giving’ in a traditional sense. It isn’t about a
particular vehicle or tax outcome—it’s about financial capability and moral
compass.”
Do you have a story about successful collaboration between gift and
estate planners? Or an idea about a way to participate in National Estate
Planning Awareness Week? How are your donors or clients making creative use of
their estate plans for charitable giving?
Links:
A Smart
Plan, A Better World, a consumer-oriented site on the basics of estate
planning, including charitable planning from NAEPC and the Stelter Company.
Estate Planning
Answers, a site from the NAEPC Education Foundation to provide
consumer-oriented advice for planning that responds to life stages and events.
“Wealth
and the Family: Asking Essential Questions,” Charlie Collier, National
Conference on Planned Giving, 2007
About Barbara Yeager
Barbara Yeager is the director of operations for PPP. She has worked for the organization since 1991. Her responsibilities include managing research projects for the national organization and for councils, managing education and networking programs for the National Conference on Philanthropic Planning, the Council Conversations series, and the Leadership Institute. She moderates groups in the PPP e-community and works with writers to develop original content for publication by PPP. Barbara has a master’s degree in library and information science and worked as a public librarian and as a technical writer and systems analyst before joining the PPP staff. In her community, she is a Girl Scout leader, a community gardener and volunteers as a costumer for community theater groups.
