At the keyboard, or at the table?

Demographics, the economy and public policy may change, and all will impact philanthropy, but there will always be a job for gift planners who can use the tools found in planned gift software. Many nonprofits need a person who can model charitable options for any donor, however small, who wants such information. For-profits, like the larger banks, and some community foundations and large single issue charities, are hiring such technicians. I hope the trend continues. But the emerging job, and highest paid job, is for the gift planner who can also convene a team to place the tools within an overall legacy plan, with the help of the client/donor’s other advisors.

As I see it, the features you find in the popular software systems are tactics, or tools, or strategies—not plans. They are constituents of a larger estate plan, retirement plan, business exit plan, financial plan or legacy plan. The planning process per se (as taught in the financial services field) elicits donor/client goals, gathers appropriate facts (balance sheet, income statement, existing legal arrangements) and seeks to achieve optimal outcomes for self, family, and community. To achieve that involves many tools—some charitable, some not charitable—coordinated together, as part of an overall plan. Here is a daunting example from Dave Holaday.

Advisors struggle to elicit high and noble client motivation, and to connect the dollars from charitable tools, like DAF, Foundation, CLT, CRT, to specific outcomes via specific gift agreements and specific programs at specific nonprofits. You will note how non-specific the massive Holaday plan is about charitable outcomes. What is planned in his example is tax; the tool used is charitable in the end, but there is no specific charitable purpose and no connections as far as I can see to a specific program at any specific charity. This is planning for “the charity of your choice,” as opposed to specific impact. To factor such impact into the plan, the estate planner needs gift planner involvement.

Who will convene the team? Could be the estate planner, could be the gift planner, but the net result is what Holaday has done here, as daunting as that is, plus more. The more part, in this case, is planning how the big money in the foundation will go to work for the community.

The vision of planning accomplished by a team is essentially the vision outlined in the 2008 PPP white paper on The Future of Gift Planning. I believe it is the future of planning for the highest capacity donors. Gift planners working for charities need technical expertise and an appetite for negotiation and collaboration to sit at that table. 

About Phil Cubeta

As the Sallie B. and William B. Wallace Chair in Philanthropy at The American College, Phil Cubeta, CLU®, ChFC®, MSFS, CAP® is responsible for the Chartered Advisor in Philanthropy® (CAP®) curriculum.

Prior to joining The American College, Phil worked for New York Life Insurance Company in a variety of roles in training, instructional design, financial planning, and advanced underwriting. From 1991 to 1993, he headed up New York Life's Charitable Giving Network of Agents. From 1995 to 2008, he served as Chief of Staff for The Nautilus Group, a service of New York Life Insurance Company providing estate, business, and philanthropic strategies to affluent clients through 200 of the company's top agents.

Phil's original training was in English Literature, Williams College, BA; Philosophy and Psychology, Oxford University, MA; and English Language and Literature, Yale, MA, M.Phil.

Phil served for 10 years on the Education Committee of the Dallas Social Venture Partners and is a Past-President of the Dallas Council of Partnership for Philanthropic Planning (formerly NCPG). He is on the Board of Interfaith Worker Justice and on the Professional Advisory Committee for Inspired Legacies. Phil also serves on the board of Advisors in Philanthropy. Essays by Phil on philanthropy have appeared in Tracy Gary's Inspired Legacies, Your Step by Step Guide to Creating a Giving Plan and Leaving a Legacy (Wiley and Sons: 2008); H. Peter Karoff, The World We Want: New Dimensions in Philanthropy and Social Change (Altimira Press: 2007); and Amy Kass, Doing Well Doing Good: Readings for Thoughtful Philanthropists (Indiana University Press: 2008). Phil has been quoted, or been the subject of articles, in The New York Times, The Journal of Gift Planning, Lifestyles Magazine, Financial Planning, and the Financial Times.

So What Does the Future Hold?

As the new year began, a question was posed on the PPP Leadership Institute listserv:  How do we see the future for gift planning? A lively discussion ensued, as will happen when a question like that is posed to a bunch of professionals who are passionate about philanthropy and, admittedly, perhaps a bit proprietary about this field we call charitable gift planning. There was mention of blended gifts (a combination of outright and deferred), being good stewards of our organizations’ long-term interests, and the pendulum-swing from separate planned giving departments in charities, to combined major and planned gift departments, back to gift planning specialists. And that was before we even got into the issues of the economy and financial markets. On that one, the Magic Eight Ball says, “The answer is unclear.” Indeed.

To me, the question is more about the future of philanthropy and the role of what we have been calling “planned gifts” in that future. My mantra has always been that a planned gift is simply a specially structured major gift that helps a donor fulfill both charitable and personal financial goals. If that’s the case, then major and planned gifts are inherently integrated. It is also a bit of the philosophy behind the PPP mission: Charitable giving made most meaningful.

In the early days of gift planning, those special techniques we called planned gifts – gift annuities, pooled income funds (remember those?), charitable remainder trusts in their many variations, and charitable lead trusts – were almost exclusively the purview of specialists on staff at charitable organizations, especially universities and colleges, major health care institutions, and large national organizations. Charitable bequests were more widely understood and often discussed in the offices of estate planning attorneys, but not too many of those practitioners were suggesting these other tools for fulfilling clients’ goals.

A lot has changed in the past 20 years. Many more estate, tax, and financial advisors are very familiar with, in some cases expert in, various charitable techniques.  There are a number of planned gifts being crafted without the involvement or even the awareness of the charities they will benefit. And more and more development professionals know at least something about planned gifts, and many small organizations effectively incorporate them into their fundraising efforts. Even if they’re not quite sure what it is, just about every person of significant wealth who is middle-aged or older has at least heard of a charitable remainder trust.  Perhaps they don’t all need one, but their eyes may be open to the possibilities of long-term charitable planning.

I still think there is a place for the gift planning specialist at the not-for-profit organization, someone who knows more than the average bear about these special techniques and about the tax and financial planning structures that underpin their potential. But if those people are simply advisors, sitting in an office cranking out gift annuity illustrations, reading IRS bulletins, and waiting for their colleagues to call, that organization is going to miss out on a lot of great revenue – and their donors are not going to fulfill their greatest philanthropic potential.

Fortunately, that isn’t happening much anymore, at least as far as I can see. Development professionals, whether generalists or major gift officers, are eager to know more about different giving techniques. Universities and other institutions are including planned gifts in their multi-year fundraising campaigns and developing gift counting policies that appropriately include and recognize all gifts. And once a major gift professional is part of a team helping a donor make a gift that includes both an outright contribution and one that is part of her long-term plan, that gift officer is a planned giving advocate for life – as is the gift planning specialist who just helped bring in current revenue for a cause he is passionate about.

If all development professionals, non-profit CEOs, and donor advisors think of planned gifts as specially structured major gifts that help donors fulfill both charitable and personal financial goals, the future is bright. So bright, in fact, we might have to wear shades.

About Shari Fox

In her role as Assistant Vice President for Development at the University of Michigan, Shari Fox has senior responsibility for the Office of Gift Planning, Stewardship and Donor Relations, the faculty and staff campaign, and several constituent fundraising programs.  Before joining the University of Michigan in 2006, Shari was Director of Gift Planning with The University of Cincinnati Foundation for almost four years.  Prior to joining UC, Shari led all development and community relations efforts for Beech Acres, a 160-year old child-focused family service agency in Cincinnati, served as Endowment Director for Jewish Federation of Cincinnati, and worked in endowment and planned gift administration at Fifth Third Bank.

Shari is a past chair and former board member of the Partnership for Philanthropic Planning and a past president of the Greater Cincinnati Planned Giving Council. She is currently on the faculty of the Planned Giving Institute at University of Richmond and has served on the Editorial Advisory Board for the monthly newsletter Planned Giving Today.  Shari is currently an active member of the Planned Giving Roundtable of Southeast Michigan.  

Shari received her Bachelor of Science in Business Administration with a major in Finance from Miami University and her M.B.A. with a concentration in Management from Xavier University.

Shari enjoys travel and reading and is a closet writer, penning personal essays, memoir, and opinion editorials, perhaps for publication in the future.

The Perpetual Campaign

We’ve been talking to PPP members around the country about how their organizations treat planned gifts during capital campaigns. One gift planner working for a university in the final year of a five-year, $1 billion campaign said he expects to transition immediately into the silent phase of the next campaign. It’s a high energy, high stress, production-oriented atmosphere for everyone in the development operation, and especially for gift planners, whose “production” doesn’t easily fit in a time-limited box. Is the perpetual campaign good or bad for planned giving?

The Pros

• There’s a difference between Sunday dinner and a Thanksgiving feast, even if the menu is essentially the same. It’s just easier to get the “family” together and excited in the atmosphere of the campaign.
• It’s a reason to revisit current donors and share information about new goals and initiatives. Plain vanilla stewardship calls are boring by comparison.
• It’s an opportunity to “harvest” planned gifts that have been in process. Donors have a reason to finalize arrangements they’ve been considering. They might also document the value of previously undocumented gifts, if that allows them to be counted in the campaign.
• Metrics! Planned gifts often contribute 20% or more of the campaign total. They finally hit the radar of the high level people responsible for the campaign. Perhaps the endowment focus will increase in the next campaign.

The Cons

• Metrics! Gift planners have no control over how planned gifts will be counted, and most organizations still publicize a single-number goal. Why bother to pursue gifts that won’t be counted toward the goal? In the perpetual campaign, uncounted gifts go un-pursued for many years.
• Planned gift donors don’t care that much about campaigns—they certainly don’t intend to die during the campaign period. The perpetual campaign imposes short-term focus on donors who are thinking about long-term legacy.
• Peer pressure—if Next Door University’s campaign raised $7 million, why can’t we? (…even though we just completed a $6 million campaign last year.)
• Media scrutiny—inquiring reporters want to know how much of that money you really have in hand at the end of the campaign. If they don’t understand the real value of planned gifts to the long-term stability of the organization, they may accuse you of overstating the success of the campaign.

Are you in perpetual campaign mode? 

What are the pros and cons for gift planning at your organization? 

Share your own experience and opinions by responding to our survey. Your input is completely anonymous, and questions should take no more than 10 minutes to answer. Click here to access the survey.

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. 

Are Planned Giving Representatives Incubating Dodo Birds?

Editor's Note: Dan Rice is a member of PPP's Leadership Institute, and he originally submitted the post below to the Institute's blog. We are sharing it with Dan's permission, and we invite you to comment and share your own experience and opinions. 

One recurring theme touched on at the 2013 PPP Leadership Institute was that a rapidly declining number of charities have or are hiring full-time planned giving representatives. Instead, the new normal seems to be that a growing number of charities want the planned giving representative to also be responsible for raising major gifts.

Almost 2 years ago, I was hired by an 18-year-old charity to start a planned giving department and serve as their full-time planned giving representative. However, throughout my 33 years in planned giving, I have raised some of the largest current gifts for the organizations I worked for. I think leaders of nonprofit organizations have a right to expect their planned giving experts to bring in current major gifts!

That said, I think it is wrongheaded to ask planned giving representatives to carry a portfolio of specific donors that they are responsible to develop moves management relationships with and raise annual gifts from. Instead, I think planned giving representatives should be supporting the major gifts representatives and other annual gift fundraisers. More about how and why coming up.

From their unique expertise perspective, planned giving representatives should redefine major gifts as asset gifts in the minds of their organizational leaders. A number of studies show that the largest gifts given to charity annually in terms of dollar value, are gifts of closely held stock, followed by real estate, followed by everything else from the attic to the basement and from sea to shining sea. Furthermore, the only fundraising training boot camps I know of that provide solid information on how to handle asset gifts are planned giving training programs. How ironic.

Here are a couple of personal stories to serve as examples. Exactly 14 months after I started working for my first charitable organization, I helped a family donate a $1.6 million outright gift of timberland. No one on the major gifts staff knew how to help the donor make an asset gift. Then, at the next charitable organization I worked for, I was able to bring in the largest current gift in their 25-year history and it came out of an existing charitable remainder unitrust. A few years prior to this event, a previous planned giving representative had helped the donor to put all of his land into the unitrust and sell it to a developer. At that time however, the donor only really needed to put half of his land into the unitrust to meet his annual income needs.

Perhaps the planned giving representative simply lacked the courage to ask for a current gift, or perhaps he wouldn't have received the credit, so he encouraged the donor to make a deferred gift of the entire land. The lesson to me is that there is a big difference between running a deferred gift program and a gifts deferred program! Let's call the former program a current gifts prevention program. Let it go the way of the Dodo bird.

Another concern relates to how many planned giving representatives there are who do not know the difference between a life income agreement and an income for living agreement. One year I was able to raise over $1 million for a charitable organization by asking donors who had previously created $10,000 gift annuities to terminate them and allow the charity to have the money now. I explained the compelling truth that the administrative costs had already eclipsed any future gift value to the charity. The only reason these donors had set up the gift annuity in the first place was because they were asked to by the planned giving representative. The same person who wouldn't or couldn't ask the donor to make the $10,000 gift as an outright gift. You might be able to call a $10,000 gift annuity a life income agreement, but can you seriously call it an income for living arrangement?

Economically speaking, I think many, if not most, life income agreements should be at least be in the 6 figure range. Otherwise, the professional advisors and managers, plus the compensated planned giving representatives will likely get more than the charity will.

All to say, I welcome any trend in the planned giving area that nudges planned giving representatives to be responsible for raising current asset gifts as well as deferred gifts of all kinds. And, I think that in most situations it is wrongheaded to ask a planned giving representative to carry a portfolio of donors that they call on regularly. I've heard that there are about 8,000 planned giving council members in the country and about half of us have been in the field for 5 years or less. Of course, not all of us work for nonprofit charitable organizations, but for those who do, I think that they need to be allowed to do this full time, to help donors to give to the over 1 million charitable organizations who would benefit from receiving current asset gifts and deferred gifts.

About Dan Rice

Dan Rice is the Philanthropy Architect for Convoy of Hope, a leading faith-based organization that provides help and hope to people in need in the United States and throughout the world. Dan coaches philanthropists, solicits principal gifts and conducts charitable gift and estate planning.

Formerly, Dan was the Philanthropy Architect for Educational Media Foundation, the world’s largest Christian music broadcaster and parent organization of K-LOVE and Air1 radio networks, and Vice President of the KLOVE & Air1 Foundation.

Dan was also the Senior Philanthropic Advisor in the Principal Gifts department for World Vision, Inc., the largest Christian relief and development agency in the world. He also served as their National Director of Gift Planning. During his 26 years with World Vision, Dan developed philanthropic financial plans, designed charitable estate plans, provided gift planning consulting, conducted philanthropy coaching and co-authored the Family Philanthropy Guidebook.

Dan is a co-founder and Chairman of the Charitable Trust Administration Company, a third party charitable trust and foundation administration services corporation. He is a member of the Partnership for Philanthropic Planning Leadership Institute and formerly served for 13 years on the Board of the Morgan Stanley Global Impact Funding Trust and also on the advisory committee for the Chair of Philanthropy at The American College.

Since 1980, Dan has actively consulted with highly successful individuals and families and their professional advisors. He is nationally recognized as a humorous and informative communicator on philanthropic planning.

Leadership Institute on CRTs and the Future of Gift Planning

PPP Leadership Institute discussions get my mental juices flowing so much that my head hurts! This year, attendees have identified more than twenty topics of interest, including non-cash assets, non-direct gifts and advised funds, communicating the true value of gift planning to data-driven decision makers, disintermediation, donor restrictions, charity secret shopping, tax triggers for planning, 90 percent of recent campaign came from two percent of donors and other similarly provocative ideas.

Leadership Institute members always meet for roundtable discussions at the National Conference on Philanthropic Planning. In Minneapolis, those discussions focused on two primary topics: Charitable Remainder Trust Trends and Opportunities, Concerns and Predictions for the Gift Planning Field. 

During the charitable trust roundtable, most attendees said that CRTs were finally coming back. From 2002-2012, charitable remainder unitrusts rose from 89,000 to 91,000 but assets dropped from $100B to $91B. During the same period, annuity trusts dropped from 23,000 to 14,000 with assets falling from $10B to $6.5B. With annuity trusts in particular, many discussed the fact that gift annuities were becoming more prevalent for large gifts and may be cannibalizing CRATs. Click here for a deeper dive into the topic by Leadership Institute member Reynolds Cafferata.

Attendees noted the key CRT drivers are the return of asset appreciation, higher income tax regime providing greater benefits of a tax-free sale and baby boomers wanting to cash out of businesses, stock or real estate in exchange for less management and life-time income. As financial markets are hitting new highs, donors want to take some assets off the table, but there are some distinct changes from the late 90s. First, donors are choosing a much lower payout rate usually between 5-6 percent. Second, many more are including non-spouse income beneficiaries. Third, more current CRTs are being funded with non-cash/illiquid assets. And finally, donors are including more testamentary CRTs for retirement plan and other IRD (income in respect of a decedent) assets.  

One attendee remarked on the evaluation, "It [the roundtable discussion] was so affirming! I had just reported to our board last Friday that we've only established one new trust since 1999 and I wasn't entirely sure why. Great discussion. Thanks for opening it up for non-Leadership Institute members to listen in."

You can share your own experience with CRTs by responding to these polls:

The next Leadership Institute Roundtable will be held March 22 and 23 at the Anaheim Marriott in Anaheim, California. Watch the PPP Perspectives blog and e-newsletter for more information. If you’d like to join the Leadership Institute so that you can participate in the discussion, click here to download an application. (PPP members who do not belong to the Leadership Institute may audit the roundtables, although they cannot participate in discussion.)

About Bryan Clontz

Bryan Clontz is a 2013 co-chair of the PPP Leadership Institute. He is president and co-founder of Charitable Solutions, LLC, specializing in non-cash asset receipt and liquidation, gift annuity reinsurance brokerage, gift annuity risk management consulting, life insurance appraisals and CRT/CGA investment management. He also serves as a Senior Consultant for Ekstrom & Associates – a Connecticut-based community foundation consulting firm. From 1993-2003, he served as the vice president of advancement at The Community Foundation for Greater Atlanta and the national director of planned giving for Boys & Girls Clubs of America. He received a bachelor’s of science in business administration from the College of Charleston in Charleston, SC; a master’s degree in risk management and insurance from Georgia State University in Atlanta, GA; and a master’s degree in financial services from the American College in Bryn Mawr, PA.

Letters to a Young Gift Planner

In 1903, the poet Rainer Maria Rilke answered letters from 19-year-old Franz Kappus, who hoped to become a poet himself. Kappus published Rilke's advice in Letters to a Young Poet, a book that is less about writing and more about living like a poet. At this year's National Conference on Philanthropic Planning, staff of the Partnership for Philanthropic Planning (www.pppnet.org) followed Rilke's lead and asked a room full of experienced charitable planners what advice they'd give to young people beginning careers as nonprofit gift planners or as estate and financial planners who advise philanthropists. This deck captures common threads in their responses. We invite you to share it with young people whom you feel would be great philanthropy advocates and guides.

2013 NCPP Wraps Up

Attendees at the 2013 NCPP Opening Dinner

Over 750 gift planning professionals from across the nation convened in downtown Minneapolis, Minnesota for three days of education, networking, and lasting memories during the 2013 National Conference on Philanthropic Planning, October 15-17. 

Twitter was abuzz with attendee and exhibitor interaction. Attendees really enjoyed seeing their tweets on the Tweetwall in front of registration. Exhibitors held a friendly competition of who could be at the top of the leader board. 

2013 NCPP Photos - View Now
Take a peek at your colleagues during the conference. See shots from the opening dinner and keynote with Kevin Kling, breakout speakers, and receptions.

2013 NCPP Storify - View Now
Want to see what happened at the conference? Or just take a look at at a run down day-by-day as attendees and exhibitors interacted online. 

2013 NCPP Speaker Papers - Log in Now
Many speakers have made their papers available. All 2013 NCPP attendees can gain access to these papers through the PPP Community online. And remember, now all current PPP members can access the 2012 NCPP speaker papers in the Community. To see 10 years of conference papers, just click the Library tab on any page in the e-community and select the National Conference Archive folder.

Ignite
If you're not familiar with Ignite, this presentation style is focused on enlightening the audience, but quick. Each presenter had exactly five minutes to share an idea, passion, or experience that keeps them excited about their work, using only 20 presentation slides that auto-advanced every 15 seconds. The room was packed! Click on the links below to see photos or a video of the presentation and get enlightened...quick.

Everything I Know About Philanthropy I Learned in a Dumpster
Phil Cubeta, Wallace Chair in Philanthropy - The American College


Life's Little Cliches through the Lens of Fundraising
Karen Cooper, Director of Principal Gifts - Plan International USA


Technology That Doesn't Kill Us Helps Us Raise More Planned Gifts
Gary Pforzheimer, President - PG Calc



Personalized Philanthropy After the Fall
Steve Meyers, Vice President, Center for Personalized Philanthropy - American Committee for the Weizmann Institute of Science


Mark your calendars now for the 2014 NCPP, October 14-16 in Anaheim, California.

2013 NCPP via Storify

National Estate Planning Awareness Week

This week we're celebrating the 5th annual National Estate Planning Awareness Week and encouraging everyone to spread the word on the local level. 

The goals of NEPAW are to: 

• Substantially create financial awareness and help to improve financial literacy. 
• Alert the public why having a current and up-to-date estate and financial plan is an important financial responsibility not only to themselves but to their families and loved ones.
• Motivate the public to take action to get and keep their financial house in order with an up-to-date estate and financial plan. 
• Help the public find the right professionals to cost-effectively help establish and keep their financial and estate plans up-to-date. 

Below are ways you or your local council can participate:

1. Place estate and financial planning editorial content on your website, in your newsletters, social media groups, local newspapers, and radio/television/web-based shows.
2. Host or take part in community-wide programs built around estate and financial planning. 
3. Circulate financial awareness campaign materials and the Press & Industry Media Kits and Guides, to your members, colleagues, associates, and other parties as you see appropriate and encourage them to support and participate in these important events. 
4. Be sure to email us your articles, checklists, ads, and seminar/webinar activity notices so we can highlight them and you in the 2013 National Estate Planning Awareness Week Campaign Report and Scrapbook. 

At last week's National Conference on Philanthropic Planning, The Stelter Company presented the results of a new survey of advisors who hold the Accredited Estate Planner® (AEP®) designation. This 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)

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)

Did you miss our conversation with one of this year's honorary co-chairs, Paul Schervish? If so, click here to read the post.

Start planning now for National Financial Literacy Month in April. We'll send more information your way early next year.

Happy NEPAW! Hug an Estate Planner!

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.”

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:

“Millionaires and the Millennium:  New Estimates of the Forthcoming Wealth Transfer and the Prospects for a Golden Age of Philanthropy.” John J. Havens and Paul G. Schervish (1999)

“Why the $41 Trillion Wealth Transfer Is Still Valid: A Review of Challenges and Questions,” John J. Havens and Paul G. Schervish, The Journal of Gift Planning, 2003

“Today's Wealth Holder and Tomorrow's Giving: The New Dynamics of Wealth and Philanthropy” Paul G. Schervish , The Journal of Gift Planning, 2005

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.

“Involving Advisors in Philanthropic Planning: Recommendations from Research” Stephen P.Johnson, The Journal of Gift Planning, 2005

“Best Practices: Asking the ‘Philanthropic Question’" Charlie Collier, Phil Cubeta; King McGlaughon; Katelyn Quynn; Eileen Wilhem. The Journal of Gift Planning, 2005

“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. 

Skipping to the Last Chapter

Our latest survey of PPP members showed that even among the people who are most convinced of the benefits of “planned” giving, one-third have not personally made a planned gift. Half of those who haven’t made a planned gift are over age 50. Since we know that roughly half of Americans die without a will, we suspect that a lot of PPP members who haven’t made charitable plans, haven’t done any planning at all. What’s going on here? Surely people whose work involves encouraging others to plan should be able to say they’ve done it themselves.

Russell James (a professor at Texas Tech University and member of the National Conference on Philanthropic Planning faculty) tells us that bequest decision making is like visualizing the final chapter of your own autobiography. Stories can help people get beyond the natural inclination to avoid thinking about their own death. We’ve noticed, however, the gift planners often tell stories that focus on the financial benefits of a gift, many of which kick in for the donor’s estate—after his death. Or they focus on benefits to charitable programs, which also traditionally require the gift to “mature.”

These donor stories are borrowed from the websites of two nonprofit organizations (donors’ names and a few details have been changed). If you’re one of the PPP members who hasn’t made your own planned gift, which story is more likely to motivate you?

When Mrs. Sara Green first met with her Regional Director and the Vice President of Planned Giving, almost ten years ago to discuss a gift to the Institute, she considered supporting ongoing areas of research, particularly in health-related fields. Sara, though interested in these projects, had rather unconventional interests. She wanted to support research for which scientists struggled to find funds—scientists whose ideas and dreams hadn’t a prayer of receiving financial support because they boldly explored the far frontiers of science and technology, without the promise of immediate, marketable, or commercial application. She wanted to honor the Institute’s tradition of unfettered scientific inquiry.

And so the idea of the Discovery Endowment Fund was born. Discovery Endowment Funds provide scientists with "dream gifts" to pursue their curiosity-driven interests to the fullest. Sara has created the John and Sara Green Discovery Endowment Fund. She is proud that the Fund will honor her late husband, while supporting such forward-looking, imaginative, and innovative research….

According to Sara, "Born on the eve of World War II, my most cherished hope and fondest dream has always been of world peace. Through its world-class basic scientific research, reaching to man’s unknown future horizons, the Institute can and will have a singularly profound effect on humanity. By providing ways to feed the hungry, improve health and the quality of living, world conflict will be reduced, and peace in our lifetime can remain our fervent prayer. To realize and fund its future miracles, I call upon people of all faiths—worldwide—who may read, see, or hear my words…The world needs this Institute."

Or this…?

Peter Reid understands better than most the value of education. It was education, made possible by his family's sacrifices and his own hard work, that took him from a poor village to a successful career. He also credits his wife for supporting him.

Peter scaled back to part-time work in 1986 to manage their investments and in 1990 retired completely. He has structured some of their retirement assets, including an IRA, to benefit the University. He says, "An IRA is a smart way to help the University since it's such a highly taxed asset if given to heirs."

He has also made the University the sole beneficiary of a whole life insurance policy. And he has two other policies designated primarily for their heirs. Should there be a claim, however, a portion would support two endowed funds established in his and his wife’s name: a fellowship and a scholarship benefiting students in the Department of Civil and Environmental Engineering. In addition, the Reid family makes annual gifts to provide current scholarships and fellowships and to build their endowments.

At the National Conference on Philanthropic Planning, you’ll have at least two chances to consider the way you tell your donors’ or clients’ stories. Opening keynoter Kevin Kling will demonstrate the emotional impact that stories can deliver. And Elissa Leif will help you capture stories effectively on video. What’s the most effective donor story that you’ve told, or heard? What motivated you to make your own planned gift?

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. 

What Donors Actually Did—And How They Did It

Much of what we know about charitable planning comes from living people. They tell us in surveys that they’ve included a bequest in their will, or established some type of life income gift. But we also know that some people simply won't disclose about their giving, and, for some others, social desirability bias leads some to exaggerate their philanthropy. After our survey subjects have died, it’s difficult to compare their reports with actual behavior, especially for estates that fall below the estate tax threshold. There are various formulas for estimating the number of Americans who make charitable bequests, but the truth is, we don’t know exactly how many do.

Image courtesty of Ambro /
FreeDigitalPhotos.net

It seems we're getting closer. For more than 20 years, the University of Michigan’s Health and Retirement Study (HRS) has been tracking a variety of information on more than 30,000 adults aged 50 and above. Among other things, the study reports whether or not participants have a signed and witnessed will (or funded trust) and whether or not there is a charitable component to the will or trust, which allows the tracking of national trends on who has these documents and how this has changed over time. At the 2013 National Conference on Philanthropic Planning, Russell James (Texas Tech University) and Jackie Franey (BNY Mellon Wealth Management) dig into this data to see if more than 10,000 HRS respondents who died during the survey period actually followed through with charitable gifts they said they’d made. 

“We’ve all talked about testamentary provisions, and tried to figure out how many of our donors have charitable plans,” Jackie says, “but this is a statistically-valid tracking of what people said they would do and what they actually did—and how they did it.”  In addition to the HRS data, Jackie and Russell will also analyze more than 1,000 charitable trusts managed by BNY Mellon Wealth Management, to learn about the donors and their strategies for directing assets to charity.

It’s tantalizing to consider what all of this data will reveal about planned gift donors as a national group. How might it apply to one planner’s work? In some cases, the national HRS data confirms what planners observe in their own experience. For example, charitable provisions actually are most likely to be added or dropped when a donor’s family structure changes (e.g., through marriage, widowhood, or the birth of a grandchild), or as time or events increase a donors’ sense of her own mortality. “Plans are largely stagnant across time,” Russell says, “but then are highly likely to change dramatically during a punctuating event, the strongest of which is actually approaching the date of death.”

He also notes that in many donors’ plans, a will is only a "backup" document.  It doesn't control assets with transfer-on-death (TOD) designations or most jointly held assets and accounts.  “Over the last few decades, TOD designations have expanded dramatically and can now transfer the entire estate including, in some states, real estate. ..We are seeing a lot of charitable plans that are part of a signed and executed will where the will exists after death, but is never probated.” In connection with this, Russell says that the relative strength of a living trust in actually generating a post-mortem charitable transfer was “dramatic.”  The HRS findings show a gradual decrease in the usage of wills and increased usage of living trusts.

  

What donors actually did, and how they did it, informs what charities expect to receive, and when to expect it.  What trends have you observed in your planned gift donors and their methods of giving? What information would you like to get from the HRS data? Jackie and Russell will consider your comments as they prepare their presentation to the National Conference on Philanthropic Planning.  

Trending Forward: Emerging Demographics Driving Planned Giving
Thursday, October 17
8:30-9:30 a.m.

Find out more about Jackie Franey and Russell James and download the mobile app.

More resources from Jackie Franey and Russell James

Charitable Bequest Decision-Making: Practical Lessons from Research Findings (Russell James, slides) 

Charitable Bequest Demographics (Russell James, slides)

Miningfor Gold: Sifting the Database to Strike it Rich (Jackie Franey; Anita Lawson, 2008 National Conference on Planned Giving) 

Bleak the New Black? Motivating Donors in the New Normal (Jackie Franey and Sally Rubin, 2012 National Conference on Philanthropic Planning)

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.