Planned Giving: A Guide to Fundraising and Philanthropy (Wiley Nonprofit Law, Finance and Management Series)

Planned Giving, Fourth Edition: A Guide to Fundraising and Philanthropy......Page 5
About the Authors......Page 7
Contents......Page 9
Preface......Page 29
Acknowledgments......Page 31
PART I: Planned Gifts......Page 35
1.1 Getting Started......Page 37
1.2 Introduction......Page 38
1.3 Planned Giving from the Donor’s Perspective......Page 39
1.5 Planned Giving from Management’s Perspective......Page 40
1.6 A Focus on the Future......Page 41
1.7 Cost Benefit Analysis......Page 42
1.9 Perspectives for Success: Leadership, Resources, and Staffing......Page 43
1.10 Planned Gifts Now and in the Future......Page 44
1.13 Planned Giving in a Development Office......Page 45
1.14 Conclusion......Page 47
2.2 Charitable Gift Annuities......Page 49
2.3 State Regulation of Gift Annuities......Page 54
2.4 Charitable Deferred Gift Annuities......Page 57
2.6 Administration......Page 60
3.1 Pooled Income Funds (PIFs)......Page 63
4.2 Parties to a Trust......Page 71
4.4 Trust Powers......Page 72
4.5 Revocable Inter Vivos Trust (Living Trust)......Page 73
4.6 Irrevocable Trusts......Page 75
4.7 Charitable Remainder Trusts......Page 76
Example 4.1......Page 81
Example 4.2......Page 83
4.8 Charitable Lead Trusts......Page 85
4.9 Tax Consequences......Page 87
5.2 Endowed Naming Opportunities......Page 89
5.3 Creating an Endowed Fund......Page 90
5.4 Umbrella Funds......Page 91
5.5 Scholarship Funds......Page 92
5.8 The Fund Description......Page 93
5.9 The Mechanics of a Fund Description......Page 96
5.10 Endowed Chairs......Page 97
5.12 Profile of a Donor Who Creates a Chair......Page 98
5.13 Cost to the Donor......Page 99
5.16 Types of Chairs......Page 100
5.19 The Internal Process......Page 101
5.20 Drafting the Terms of the Chair......Page 102
5.21 Recognition......Page 103
6.2 The Will......Page 105
6.3 Suggested Language......Page 106
6.4 Standard Bequest Forms......Page 108
6.6 Targeting Donors for Bequests......Page 109
6.7 Marketing Bequests......Page 110
6.8 Crediting Bequests......Page 111
6.9 Recognition Events......Page 112
6.10 Administering a Nonprofit Bequest Program......Page 115
6.11 Guide to the Probate Process......Page 116
6.12 The Planned Giving Office and Bequest Administration......Page 119
6.13 Typical Problems Encountered with Bequests......Page 125
6.14 Distribution within the Charity......Page 129
6.15 Facilitating Bequest Administration: Working with Donors Today......Page 130
6.16 Conclusion......Page 131
PART II: Assets Involved with Planned Giving......Page 135
7.1 Introduction......Page 137
7.2 Securities Held by the Donor’s Stockbroker or Banker......Page 138
7.4 The Value of the Gift......Page 139
7.5 The Date of the Gift......Page 140
7.6 The Donor’s Charitable Income Tax Deduction......Page 141
7.7 Gifts of Shares of a Mutual Fund......Page 142
7.8 Closely Held Stock......Page 144
8.1 Introduction......Page 147
8.2 Elements Affecting Gifts of Real Estate......Page 148
8.3 Factors Affecting Value and Marketability of Real Estate......Page 149
8.4 Tax Consequences of Gifts of Real Estate......Page 151
8.5 Working Out the Arrangements......Page 152
8.7 Denial of Charitable Income Tax Deduction for a Gift of a Use of Property......Page 153
8.8 Gifts of Real Estate with a Retained Life Estate......Page 154
Example 8.1......Page 155
Example 8.3......Page 157
8.9 Gifts of Real Estate to Charitable Remainder Trusts......Page 158
8.10 Gifts of Real Estate to Fund Charitable Gift Annuities......Page 159
Example 8.5......Page 160
8.12 Gifts of Mortgaged Property......Page 161
8.13 Gifts of Conservation Easements......Page 163
8.16 Qualified Donee Organizations......Page 165
8.17 Conservation Purposes......Page 166
8.18 Qualified Real Property Interests......Page 167
8.19 Tax Consequences......Page 168
8.20 Valuation......Page 169
8.21 Conclusion......Page 171
9.2 Overview......Page 173
9.3 Gifts of Tangible Personal Property to Planned Giving Vehicles......Page 177
9.4 Substantiation Requirements......Page 178
9.6 The Gift Review Committee......Page 179
9.7 Gifts of Major Collections......Page 181
9.8 Identifying Prospects......Page 182
9.9 Donor Concerns......Page 183
9.10 Nonprofit Issues......Page 184
9.12 Deaccessioning......Page 185
9.14 Unacceptable Collections......Page 186
9.15 The Curation Agreement......Page 187
9.18 Conclusion......Page 190
10.2 Definitions......Page 191
10.3 Life Insurance Agents and Planned Giving......Page 192
10.4 Ways to Use Life Insurance to Promote Major Gifts......Page 193
10.6 Short-Term Endowment Policies......Page 194
10.8 Insurance Used in Asset Replacement Trusts......Page 195
10.9 Funding a Charitable Remainder Net Income Unitrust/Flip Trust with Life Insurance......Page 196
10.10 Guidelines for the Planned Giving Officer......Page 197
10.11 Conclusion......Page 198
11.2 Gifts of Retirement Plan Assets: IRA Charitable Rollovers Extended......Page 199
11.3 Tax Consequences of Charitable Gifts of Retirement Accounts at Death......Page 200
11.5 Ways to Transfer Retirement Assets to a Nonprofit......Page 201
11.6 Summary......Page 203
PART III: Planned Giving’s Financial Impact......Page 205
12.1 Introduction......Page 207
12.2 Income Taxes......Page 208
12.5 Deductibility of Gifts of Tangible Personal Property......Page 210
12.7 Deduction Reduction Provision......Page 213
12.10 The Ordinary Income Reduction Rule......Page 214
12.11 Income in Respect of a Decedent......Page 215
12.12 Deductibility of Charitable Contributions for Business Organizations......Page 216
12.14 Capital Gains Taxes......Page 217
12.15 Federal Estate and Gift Taxes......Page 218
12.18 Gifts by Husband and Wife—the Unlimited Marital Deduction......Page 219
12.19 Streams of Income and Gift Tax Consequences......Page 220
12.22 Tax Implications of a Bargain Sale......Page 221
12.23 Partial Interests......Page 222
12.24 Conclusion......Page 223
13.2 Related Disciplines......Page 225
13.4 The Will: A Road Map......Page 227
13.5 Parts of a Will......Page 229
13.6 Coordinating Title to Property with the Estate Plan......Page 231
13.8 Probate......Page 232
13.9 Power of Attorney and Durable Power of Attorney......Page 234
13.11 Talking with a Prospect about Estate Planning and Wealth......Page 235
13.12 Conclusion......Page 236
14.1 Introduction......Page 237
14.2 Achieving Financial Objectives through Charitable Giving......Page 238
14.3 Risk-and-Reward Theory......Page 239
14.4 Evaluation of Investment Alternatives......Page 241
14.5 Cash Investments......Page 242
14.6 Stocks......Page 243
14.7 Income Investments......Page 245
14.8 Mutual Funds......Page 246
14.9 Real Estate......Page 247
14.10 Portfolio Management and Planning......Page 248
14.11 Conclusion......Page 250
PART IV: Planned Giving Programs on Location......Page 251
15.1 Introduction......Page 253
15.2 Faith-Based and Religious Organizations......Page 254
15.3 Hospitals and Healthcare Organizations......Page 255
15.4 Educational Institutions......Page 256
15.5 Political Fundraising......Page 257
15.6 Community and Civic Organizations......Page 258
15.7 Arts and Cultural Organizations/Aquariums and Zoos......Page 259
15.9 Social Service/Humanitarian Organizations......Page 260
15.10 Conclusion......Page 261
16.1 Introduction......Page 263
16.2 Education......Page 264
16.4 Legal Issues......Page 265
16.6 Management Plan......Page 266
16.8 Marketing......Page 267
16.10 Stewardship......Page 270
16.12 Software......Page 271
16.14 Conclusion......Page 272
17.1 Introduction......Page 273
17.2 Types of Educational Institutions......Page 274
17.3 Centralized and Decentralized Programs......Page 275
17.5 The Planned Giving Officer: Fundraiser or Consultant?......Page 276
17.6 Preventing Conflicts: Working with Development Staff......Page 277
17.7 Developing Internal Relationships......Page 278
17.8 Constituents......Page 279
17.9 Managing Constituents......Page 280
17.10 Planned Giving Program Activities......Page 281
17.11 Gift Opportunities......Page 282
17.12 Conclusion......Page 283
18.2 The Hospital Environment......Page 285
18.3 The Players......Page 288
18.4 The Patients......Page 290
18.5 Staffing the Development Office......Page 294
18.6 Priorities and Expectations......Page 295
18.7 Grateful Patients......Page 297
18.10 Soliciting Patients Who Are Donors......Page 299
18.11 Working with the Donor’s Physician......Page 300
18.12 From the Donor’s Perspective......Page 302
18.13 Working with a Patient’s Outside Advisor to Complete the Gift......Page 303
18.15 Patients with Terminal Illnesses, Including AIDS......Page 304
18.17 Conclusion......Page 306
19.2 Donor Profile......Page 309
19.3 Relationship Building......Page 311
19.7 Use of Planned Giving Vehicles......Page 314
19.8 Marketing......Page 315
19.10 Special Challenges Unique to Arts Organizations......Page 316
19.11 Conclusion......Page 318
PART V: Managing Donors and Prospects......Page 319
20.2 Motivations......Page 321
20.3 Profile of a Planned Giving Prospect......Page 325
20.4 Finding the Planned Giving Prospect......Page 326
20.5 Working with the Planned Giving Prospect......Page 328
20.6 Conclusion......Page 330
21.1 Introduction......Page 331
21.2 Fundraising from the Nonprofit’s Perspective: Development, Advancement, or Philanthropy?......Page 332
21.3 Changing the Focus to Philanthropy......Page 333
21.5 Getting Started......Page 334
21.6 Strategies to Promote Philanthropy......Page 335
21.7 Opportunities for All Types of Charities......Page 338
21.8 Conclusion......Page 340
22.2 A Planned Giving Office as a Service Center......Page 341
22.3 Management......Page 342
22.4 Educating Donors......Page 344
23.2 Gender-Based Differences in Giving......Page 349
23.4 Financial Challenges for Women......Page 350
23.5 Types of Donors......Page 351
23.6 Motivations for Giving......Page 352
23.7 Gift Planning Implications......Page 353
23.8 Types of Planned Gifts to Consider for the Female Donor......Page 355
23.11 Conclusion......Page 356
24.1 Introduction......Page 357
24.3 Before Meeting with the Donor......Page 358
24.4 Families in Sync/Harmony......Page 359
24.5 Families Out of Sync/Harmony......Page 360
24.6 Donors without Children......Page 362
24.8 Tools for Continuing and Maintaining Family Philanthropy......Page 363
24.9 Gift Options for Family Philanthropy......Page 364
24.10 Conclusion......Page 365
25.2 The Planned Giving Officer’s Mindset......Page 367
25.3 Preparation......Page 368
25.4 The Planned Giving Participants......Page 371
25.5 The Donor......Page 372
25.6 Types of Solicitations......Page 373
25.7 The Solicitation Process......Page 376
25.8 The Size of the Gift......Page 380
25.9 Negotiations......Page 381
25.10 Follow-up......Page 383
26.1 Introduction......Page 385
26.2 Types of Problematic Gift Situations......Page 386
26.3 Warning Signs......Page 389
26.5 Knowing When to Walk Away......Page 390
26.6 Keeping the Door Open......Page 391
26.7 Conclusion......Page 392
27.1 Introduction......Page 393
27.2 Working a Room......Page 394
27.4 Telephone Etiquette......Page 395
27.5 E-Mail Etiquette......Page 396
27.7 The Difficult Donor......Page 397
27.8 Donor Visits......Page 398
27.9 Restaurant Protocol......Page 399
27.10 Overnight Stays at Donor’s Home......Page 400
27.12 Visiting a Donor in the Hospital......Page 401
27.15 In Summary......Page 402
27.16 Conclusion......Page 403
28.1 Introduction......Page 405
28.4 Preparation......Page 406
28.5 Capacity......Page 407
28.6 Qualifying Prospects......Page 408
28.9 Working the Gift Through the Nonprofit Organization......Page 409
28.10 Dealing with the Donor......Page 411
28.12 Dealing with a Donor’s Advisors and Family......Page 413
28.14 Terms of the Gift......Page 415
28.15 Conclusion......Page 416
29.1 Introduction......Page 417
29.2 What Is Donor’s Remorse?......Page 418
29.3 Causes of Donor’s Remorse......Page 419
29.4 Preventing Donor’s Remorse......Page 421
29.5 The Charity’s Response......Page 424
29.7 Conclusion......Page 425
30.1 Introduction......Page 427
30.3 Donor Disconnects......Page 428
30.4 Fixing the Problem......Page 429
30.5 Treating the Symptoms......Page 431
30.6 Make the Charity Stand Out/Distinguish the Charity from Others......Page 432
30.7 The Role of Planned Giving......Page 433
30.8 Conclusion......Page 434
PART VI: MANAGING A PLANNED GIVING PROGRAM......Page 437
31.2 Annual Giving......Page 439
31.4 Foundations and Corporations......Page 443
31.6 Prospect Management......Page 444
31.10 Communications and Public Affairs......Page 445
31.12 Conclusion......Page 446
32.2 Perspective......Page 447
32.5 Donor Contact......Page 448
32.7 Establish a Strong Marketing Communications Effort to Promote Planned Gifts......Page 449
32.8 Raise the Visibility of the Planned Giving Program Internally and Externally......Page 451
32.10 Inventory Existing Planned Giving Totals......Page 452
32.12 Planned Giving Budget......Page 453
32.13 Conclusion......Page 456
33.2 Types of Roles for the Planned Giving Officer......Page 457
33.3 Attributes of a Successful Planned Giving Officer......Page 458
33.4 Top-10 List for Closing Large Planned Gifts: How to Work with Planned Giving Donors......Page 459
33.5 Conclusion......Page 462
34.1 Introduction......Page 463
34.2 Definition......Page 464
34.3 Planned Giving and Major Gift Profiles......Page 466
34.4 Identifying Major Gift and Planned Giving Prospects......Page 471
34.5 Mobilizing the Nonprofit Organization to Produce Planned and Major Gifts......Page 472
35.2 The Changing Marketplace......Page 479
35.3 Attributes of Successful Planned Giving Professionals......Page 482
35.4 The Process of Hiring a Planned Giving Officer......Page 485
35.5 The Planned Giving Assistant......Page 488
36.2 New Skills, Abilities, and Thought Processes......Page 491
36.4 Advance Preparation......Page 492
36.5 Transferable Skills: Motivation, Team Building, and Stewardship......Page 493
36.7 Establish Mutual Expectations with the Consultant......Page 495
36.8 Conclusion......Page 496
37.2 Getting Organized......Page 497
37.3 Control the Office Environment......Page 499
37.4 Meetings......Page 501
37.6 Working at Home......Page 502
37.8 General Tips for Saving Time......Page 504
37.9 Conclusion......Page 505
38.1 Introduction......Page 507
38.2 Characteristics of Successful Leaders and Managers......Page 508
38.3 Leadership in a Development Office......Page 509
38.4 Leadership Rules to Live By......Page 510
38.5 Tools to Help Manage......Page 513
38.6 Educational Methods for Becoming a Better Manager......Page 515
38.7 Conclusion......Page 516
PART VII: MANAGING OUTSIDE THE OFFICE......Page 517
39.2 Vice President for Development......Page 519
39.3 President or Chief Executive Officer of the Organization......Page 520
39.4 Role of the Board of Trustees......Page 522
39.6 Volunteers......Page 524
39.7 Volunteer Fundraisers: Doctors and Deans......Page 525
39.8 Supporting Offices within the Organization......Page 526
39.9 Planned Giving Training Program......Page 528
39.10 Conclusion......Page 529
40.1 Introduction......Page 531
40.2 Rationale for Creation of a President’s Society......Page 532
40.3 Defining the President’s Society......Page 533
40.4 Benefits of Creating a Volunteer Society......Page 534
40.5 Goals......Page 535
40.6 Modeling the Organization......Page 536
40.7 The Chairperson......Page 537
40.9 The Recruitment Process......Page 539
40.10 Subcommittees......Page 540
40.11 Creating a President’s Society Fund......Page 541
40.12 Role of the Chief Development Officer......Page 542
40.14 Challenges......Page 543
40.15 Conclusion......Page 545
41.2 Putting Development into Context for Nondevelopment Staff......Page 547
41.3 Collaborative Efforts......Page 548
41.4 Development Communications......Page 549
41.6 Identification of Development Constituents......Page 550
41.7 Cultivation of Constituents......Page 553
41.8 The Solicitation......Page 556
41.9 Raising Funds from Individuals......Page 557
41.12 Dealing with the Downside......Page 560
41.13 Conclusion......Page 561
PART VIII: Evaluating Performance......Page 563
42.1 Introduction......Page 565
42.3 Take Inventory......Page 566
42.4 Establishing Programmatic Goals......Page 567
42.5 Identifying Planned Giving Donors and Prospects......Page 568
42.7 Evaluation of Staff Functions......Page 569
42.8 Marketing......Page 570
42.9 Staffing......Page 575
42.11 Budget/Education......Page 576
42.14 Outside Support......Page 577
43.1 Introduction......Page 581
43.2 Reaching Goals and Objectives......Page 583
43.3 Moves Management......Page 584
43.5 Additional Ways to Reach Goals and Objectives Exclusively for Planned Giving Officers......Page 586
43.6 Team Consideration......Page 587
43.7 Frequency of Accountability and Tracking Prospects......Page 588
PART IX: Marketing......Page 589
44.1 Introduction......Page 591
44.2 Types of Documents......Page 592
44.4 Know the Audience and Be Responsive to It......Page 593
44.5 Use Outlining......Page 594
44.6 Develop a First Draft......Page 595
44.7 Bring Others into the Process......Page 596
44.8 Manage Documents to Meet Deadlines......Page 597
44.9 Design an Effective Document......Page 598
44.10 Take Advantage of Desktop Publishing......Page 599
44.11 Use Language Correctly and Effectively......Page 600
44.12 Recipe for a Document......Page 603
44.13 Conclusion......Page 604
45.1 Introduction......Page 605
45.3 The Case Statement......Page 606
45.4 Guide to Charitable Gift Planning......Page 607
45.5 Response Form......Page 608
45.7 Columns in Nonprofit Publications......Page 609
45.9 Buckslips......Page 610
45.10 Testimonial Advertisements......Page 611
45.11 Letters......Page 612
45.13 Conclusion......Page 613
46.1 Introduction......Page 615
46.3 Noneconomic Benefits......Page 616
46.5 Enrichment Brochure......Page 619
46.6 Enrichment Programs......Page 620
46.8 Disseminating Enrichment Brochures......Page 622
46.9 Conclusion......Page 626
47.1 Presentations......Page 627
48.2 Ways to Begin......Page 635
48.4 Mailings to Professional Advisors......Page 637
48.7 Nontechnical Outreach Program......Page 638
48.9 Planned Giving Manual......Page 639
48.11 Establishing a Professional Advisory Committee......Page 640
48.12 Purpose of the Committee......Page 642
48.14 Conclusion......Page 644
PART X: Policies and Procedures......Page 647
49.1 Introduction......Page 649
49.3 Securities......Page 651
49.4 Life Income Gifts......Page 653
49.5 Bequests......Page 658
49.6 Gifts of Tangible Personal Property......Page 659
49.7 Gifts of Real Estate......Page 660
49.10 Administrative Issues......Page 662
49.11 Ethics......Page 668
50.2 Symptoms of Disinterest......Page 669
50.3 Incident Report......Page 670
50.4 Acknowledgments......Page 671
50.6 Inclusion in Charity Events......Page 672
50.8 Gift Agreements......Page 674
50.10 Stewardship......Page 675
50.12 Conclusion......Page 676
51.2 Polices and Procedures......Page 679
51.4 Pricing Naming Opportunities......Page 680
51.5 Background Check......Page 681
51.6 Conclusion......Page 685
52.1 Introduction: Nonprofit Investment in Context for Planned Giving Officers......Page 687
52.2 Nonprofit Investment Issues......Page 689
52.3 Endowment Management......Page 692
52.4 Investment Strategies......Page 696
52.5 Portfolios for Planned Giving Options......Page 703
52.6 Donor Relations......Page 709
52.7 Investment Guidelines......Page 714
52.8 Conclusion......Page 715
53.1 Introduction......Page 717
53.3 Pegging the Minimum Based on a Good or Service/Formulaic Approaches......Page 719
53.4 Setting Realistic Minimums......Page 720
53.5 Escalator Provisions......Page 722
53.7 Political Fallout—Impact on Prior Gift Agreements and Prior Relationships......Page 723
53.8 Conclusion......Page 724
PART XI: Planned Giving in Context......Page 727
54.2 Donor Rights and Nonprofit Responsibilities......Page 729
54.4 Donor Rights......Page 730
54.5 Nonprofit Responsibilities......Page 734
54.6 Donor’s Representatives......Page 736
54.7 Payment of Professional Advisors’ and Lawyers’ Fees......Page 737
54.9 Fiduciary Role of the Nonprofit......Page 738
54.11 Planned Giving Officer as Salesperson......Page 739
54.13 Model Standards of Practice for the Charitable Gift Planner......Page 740
54.14 Conclusion......Page 742
55.1 Introduction......Page 743
55.2 Campaign Counsel......Page 744
55.3 Advantages of Entering a Major Campaign......Page 745
55.4 Disadvantages of Entering a Campaign......Page 749
55.5 Types of Capital Campaigns......Page 750
55.6 The Nucleus Fund......Page 752
55.7 Types of Campaign Gifts......Page 753
55.8 Planned Giving Training......Page 754
55.11 Conclusion......Page 755
56.1 Introduction......Page 757
56.3 Gift Acknowledgment......Page 758
56.4 Gift Administration......Page 760
56.5 Donor Recognition......Page 763
56.6 Continued Cultivation and Solicitation for Additional Gifts......Page 766
56.7 Endowed Funds......Page 767
56.8 Conclusion......Page 768
57.2 Benefits of Institutionally Related Foundations......Page 769
57.3 Considerations in Establishing a Foundation......Page 770
57.4 The Charity and the Foundation......Page 771
57.5 The Foundation’s Organizational Framework......Page 772
57.6 Committees and Their Functions......Page 774
57.7 Fundraising......Page 777
57.8 Managing and Investing Assets......Page 778
57.9 Conclusion......Page 780
58.2 When to Hire an Outside Asset Manager......Page 781
58.4 Selecting the Asset Manager......Page 782
58.5 From the Asset Manager: What the Planned Giving Program Wants and Needs......Page 784
58.6 Responsibilities of the Outside Asset Manager......Page 785
58.7 Conversion from In-House to Outside Manager......Page 786
58.8 The Nonprofit and Outside Manager Relationship......Page 787
58.9 Recurring Issues......Page 788
58.11 Conclusion......Page 790
59.1 Introduction......Page 791
59.2 Impact on the Charity......Page 792
59.4 Impact on the Donor Base......Page 793
59.7 Increasing the Management Fee on Endowed Funds......Page 794
59.10 Restricted Gifts, Planned Gifts, and Life Income Gifts......Page 795
59.12 Implications on Planned Gift Options......Page 796
59.15 Making the Case......Page 797
59.16 Conclusion......Page 798
Using the Files......Page 799
SUMMARY CD-ROM CONTENTS......Page 800
Index......Page 803