Demystifying Planned Giving
THE CULTIVATION PROCESS:
Ways to Engage • Let’s Begin the Conversation
Clyde W. Kunz, CFRE, presenter
(520) 977-4019 • • www.ClydeKunz.com
Review: Types of Planned Gifts / Donor Profiles for Each
· Bequests (FREQUENCY SCORE = 10)
o Almost anyone; easiest path; inexpensive
o Simple to do; Will or codicil to Will
o Specific amount; percentage of remainder
· Beneficiary Designations (FREQUENCY SCORE = 8)
o Also easy and inexpensive (or no cost)!
o IRAs or other retirement accounts
o Life insurance policy
o Specific amount; percentage of remainder
· Life Insurance (FREQUENCY SCORE = 5)
o Is insurance need still valid?
o Can make charity both the owner and the beneficiary of policy (whole life only)
o Easy; inexpensive
· Bargain Sale (FREQUENCY SCORE = 1)
o Can be complicated
o Charity needs to have legal counsel
o May generate UBIT
· Gifts of Remainder Interest in a Residence or Farm– a.k.a. Life Estate (FREQUENCY SCORE = 3)
o Gives donor a HUGE tax deduction in year of donation
o Have to think about end-of-life issues
· Pooled Income Fund (FREQUENCY SCORE = 1)
o Similar to a mutual fund for donors
o Incurs administrative fees; spread over the donor pool
o Can benefit higher-end donors to the detriment of smaller donors.
· Life income/split interest gifts
o Charitable Gift Annuities (CGA) (FREQUENCY SCORE = 9)
§ Simple contract
§ Low cost
§ Guarantees income
§ Good place to “park” appreciated assets
§ May require an outside administrator
o Charitable Remainder Trusts (CRT) (FREQUENCY SCORE = 7)
§ Rule of thumb: $200,000+
§ Give donor more control
§ Good place to “park” appreciated assets
§ Requires legal counsel to set up
§ Requires administration
§ Requires additional tax filing
o Charitable Lead Trusts (FREQUENCY SCORE = 1)
§ Very rare
§ For very large estates ($2M+)
§ Used as a way to pass assets between generations
§ A good place to “park” appreciated assets
§ Definitely requires legal counsel
How Planned Gifts Are Used
· As Part of a Campaign
o Make sure that using planned gifts for that purpose is approved
o Consider “adding” a planned gift option to a campaign as a way to broaden participation
· To Build Endowment
o Donors may assume their gift goes to endowment
o Make sure they understand how to restrict their gift
Recognizing Planned Gifts
· Donor Recognition “Club” or “Society”
· Annual or semi-annual event
· Program book listing / donor wall listing
· Ongoing Planned Giving Information
· Planned giving newsletters
· Seminars / speakers
· Other
· Lapel pin, desk set, etc.