PRACTICAL PLANNED GIVING IN CONGREGATIONS

Planned Giving – in General: What is it? ANNUAL GIVINGPLANNED GIVING

Planned Giving In 2008 bequests to charities totaled $22,600,000,000. This has caught the attention of major charities, and they have allocated significant resources to pursuing planned gifts. Those charities are run like a business. They’ve hired staff, assigned goals, developed enormous marketing budgets and brought in vast sums of money.

Planned Giving Universities, hospitals, museums, arts, health societies, retirement communities, etc. Think about: What are your top 5-10 organizations? What are they doing?

Planned Giving HOW ARE WE DOING? In any given year:  25% congregations get a bequest  Of those the average is $54,000 A small minority of churches are doing quite well.

Planned Giving How are they doing so well? Study the top 20 - bequest receiving churches of 2008 Commonalities:  Average $2,000,000+  Committee  Multi-year Effort  Pastor involvement  Communications with congregation  Support from denominational Foundation

MEMBERS BEQUESTS '08 EFFORTS IN PLANNED GIVING/ENDOWMENT General Stewar dship Bequests '07 Bequests '06 4,000+$2,287,000Part-time staff person. Close TPF relationship.Strongyy 4,000+$4,828,460Endowment page and personal financial planningYesyy 3,000+$1,270,523 Have own Foundation. Pattern of bequests has been established. Good TPF relationship.Yesyy 2,000+$1,301,576 Close work with PF development staff. Web suggests non-cash gifts: stock, even vehicles.Strongyy 1,400$3,575,275 Well organized planned giving program - has had employee dedicate part time. Worked with PF closelyStrongnn 1,200$2,382,911 Organized effort. Web details on Memorial Committee that oversees endowmentYesyn 1,200$1,890,622Legacy link, option for make stock gifts, link to Calvary FoundationYesyn 900$1,292,6383 committees: Endowment, Memorials, Planned GivingYesyy 700$1,657,000**yn 700$1,438,125 Planned gifts focus in distant and recent past. Worked with PF development staffStrongny 600$2,754,391 Fairly well organized planned giving program. Used PF development staffStrongyy 500$1,193,765 Well organized planned giving program. Used PF development staff for gifts*yy 500$1,229,900Very high profile - multiple endowment links on home pageYesny 300$1,150,000 No web messaging - yet PF planned giving seminars in recent years. Used PF development staff.*nn 250$1,133,020Planned giving page and link to Presbyterian FoundationYesyy 125$1,228,183* (new church development)Online pledgenn 100$3,932,069NF**ny 100$2,200,000NF**nn 75$1,080,000*Strongnn 60$3,700,000*Yesyn

Planned Giving FUNDAMENTAL BEST PRACTICES Committee specifically on Planned Giving, diverse membership Policies and Guidelines Investment – often under auspices of separate committee Committee Charter and Guidelines; roles, responsibilities, reporting Gift / Donation Acceptance Policy Annual Report – financial information and gift impact information Endowment Policy; distribution policy, spending policy Leadership education Leadership participation; gifts and support Case Statement

Planned Giving FUNDAMENTAL BEST PRACTICES continued Pastor support and involvement Sermons Basic knowledge of and comfort with planned giving Congregational Communications Regular communications; newsletter, bulletins, minute for mission Recognize wills emphasis Sunday USE THE PRESBYTERIAN FOUNDATION Highly skilled professionals employed to support you High quality print materials for churches Manage the gift tools for your Church

Understand the planned giving tools

Gift TypeRetirement PlanBequestCharitable Gift AnnuityDonor-Advised FundReal EstateCharitable Remaindr TrstLife Insurance Summaryis one of the most complicated assets to understand & potentially the most heavily taxed asset in an estate (up to 75%). Designate PC as a % beneficiary, removing that potentially heavily taxable asset from your estate and giving it tax free to PC. can leave PC a percentage or residual value of an estate. is an irrevocable gift to the Presbyterian Foundation, where the donor receives a regular fixed payment for life. At termination (annuitant's death), PC receives the residual value of the annuity. is a fund established where family members and friends may serve as advisors, making recommendations for fund grants (to be made at least annually). commercial or residential, developed or undeveloped can be a an excellent and practical out right gift or funding for a life income gift. Donating can alleviate the tax and management burden, esp. for those downsizing in hot markets with rocketing prices + taxes. provides a fixed (annuity) or variable (unitrust) dollar amount for life or a term of years. At the death of the income beneficiary or a set term of years, the trust assets must be used for charitable purposes. can designate PC as the primary-, co- or contingent-beneficiary of a policy through agent or HR office (no immediate income tax deduction is available for such designation). A transfer of ownership and policy rights may have a deduction. Amount to get started $1 + $10,000+ $150,000 +$200,000 +$1+ Difficulty5 minutes/EasyDays/Easy2 weeks/Easy to Moderate Months/Highly Complex Days/Easy ExampleDesignate PC beneficiary of a 401k. $100,000 could pass in whole to PC. Proceeds distributed to heirs would be taxed at a minimum $28,000 (assuming 28% tax bracket) and up to $75,000 (assuming maximum income & estate taxes). A PC member with a $1M estate might leave 5% ($50k) to PC and $950k to heirs. A PC member is 75 years. She transfers $100,000 of an appreciated asset or CD to a CGA. Annual payments are 6.1% (or $6,100) for life. She gets a tax deduction and part of each payment is income-tax- free. A member who wants to simplify their giving and teach stewardship to family established a $20,000 fund to fund PC mission and other causes by appointing self and grandchildren as fund advisors. A couple soon moving to a retirement community will sell their $1.2mm home (bought for $100,000). Donating the property avoids capital gains and brings significant tax deduction. A $250,000 annuity trust pays $15,000 a year for life. If income is less than $15,000 a year, the prinicpal will make up the difference. If the income is more than $15,000, the excess income is added to the principal. At termination, remaining principal goes to charity. A member no longer needs life insurance, purchased years ago for children. They donated the policy and claimed a charitable deduction for approximately the policy's cash surrender value. The proceeds were completely removed from their estate Secular Benefits (1) Asset removed from estate (2) Gift not taxable to PC, but would be to heirs (3) no immediate financial commitment (1) Fully deductible for estate taxes (1) Tax benefits (2) Higher income than CD's or Treasuries (3) More stable than equities (4) Significant support to PC (1) Charitable income tax deduction (2) No capital gains (3) Streamlined and efficient gifting mechanism (1) Charitable income tax deduction (2) No capital gains (1) Reduce estate size & potential tax (2) capture long-term capital gain without immediate tax (3) Create charitable deduction (4) Funding asset protected (1) Possible income, estate and gift tax relief (2) Remove asset from estate Does this fit you? (1) I love PC (2) My assets are locked up (3) I can not part with this today, becase I may need it in the future (4) My successors might redeem this at a great tax expense (1) I love PC (2) I want to make major gift (3) Assets are locked up, and I may need them in the future. (1) I love PC (2) I have financial resources, but they are working to earn my income (3) I could use a higher income and more stable source of income (4) I have capital gains on assets (1) I love PC (2) I want a culture of giving in my family (3) I want to support PC and other charities (4) I wish to streamline my giving (1) I love PC (2) I inherited estate/ property that can't afford/ manage (3) I am downsizing (4) I can't afford to stay, but can't afford to leave (retained life estate) (1) I love PC (2) My heirs may be affect by estate tax (3) I may wish to protect heirs from visible high net worth (disqualify from special needs, target for litigation, spendthrift, etc.) (1) I love PC (2) My beneficiaries no longer need my insurance (3) I am exploring other assets as gift opportunities

Gift TypeRetirement PlanBequestCharitable Gift AnnuityDonor-Advised FundReal EstateCharitable Remaindr TrstLife Insurance Summaryis one of the most complicated assets to understand & potentially the most heavily taxed asset in an estate (up to 75%). Designate PC as a % beneficiary, removing that potentially heavily taxable asset from your estate and giving it tax free to PC. can leave PC a percentage or residual value of an estate. is an irrevocable gift to the Presbyterian Foundation, where the donor receives a regular fixed payment for life. At termination (annuitant's death), PC receives the residual value of the annuity. is a fund established where family members and friends may serve as advisors, making recommendations for fund grants (to be made at least annually). commercial or residential, developed or undeveloped can be a an excellent and practical out right gift or funding for a life income gift. Donating can alleviate the tax and management burden, esp. for those downsizing in hot markets with rocketing prices + taxes. provides a fixed (annuity) or variable (unitrust) dollar amount for life or a term of years. At the death of the income beneficiary or a set term of years, the trust assets must be used for charitable purposes. can designate PC as the primary-, co- or contingent-beneficiary of a policy through agent or HR office (no immediate income tax deduction is available for such designation). A transfer of ownership and policy rights may have a deduction. Amount to get started $1 + $10,000+ $150,000 +$200,000 +$1+ Difficulty5 minutes/EasyDays/Easy2 weeks/Easy to Moderate Months/Highly Complex Days/Easy ExampleDesignate PC beneficiary of a 401k. $100,000 could pass in whole to PC. Proceeds distributed to heirs would be taxed at a minimum $28,000 (assuming 28% tax bracket) and up to $75,000 (assuming maximum income & estate taxes). A PC member with a $1M estate might leave 5% ($50k) to PC and $950k to heirs. A PC member is 75 years. She transfers $100,000 of an appreciated asset or CD to a CGA. Annual payments are 6.1% (or $6,100) for life. She gets a tax deduction and part of each payment is income-tax-free. A member who wants to simplify their giving and teach stewardship to family established a $20,000 fund to fund PC mission and other causes by appointing self and grandchildren as fund advisors. A couple soon moving to a retirement community will sell their $1.2mm home (bought for $100,000). Donating the property avoids capital gains and brings significant tax deduction. A $250,000 annuity trust pays $15,000 a year for life. If income is less than $15,000 a year, the prinicpal will make up the difference. If the income is more than $15,000, the excess income is added to the principal. At termination, remaining principal goes to charity. A member no longer needs life insurance, purchased years ago for children. They donated the policy and claimed a charitable deduction for approximately the policy's cash surrender value. The proceeds were completely removed from their estate Secular Benefits(1) Asset removed from estate (2) Gift not taxable to PC, but would be to heirs (3) no immediate financial commitment (1) Fully deductible for estate taxes (1) Tax benefits (2) Higher income than CD's or Treasuries (3) More stable than equities (4) Significant support to PC (1) Charitable income tax deduction (2) No capital gains (3) Streamlined and efficient gifting mechanism (1) Charitable income tax deduction (2) No capital gains (1) Reduce estate size & potential tax (2) capture long-term capital gain without immediate tax (3) Create charitable deduction (4) Funding asset protected (1) Possible income, estate and gift tax relief (2) Remove asset from estate Does this fit you? (1) I love PC (2) My assets are locked up (3) I can not part with this today, becase I may need it in the future (4) My successors might redeem this at a great tax expense (1) I love PC (2) I want to make major gift (3) Assets are locked up, and I may need them in the future. (1) I love PC (2) I have financial resources, but they are working to earn my income (3) I could use a higher income and more stable source of income (4) I have capital gains on assets (1) I love PC (2) I want a culture of giving in my family (3) I want to support PC and other charities (4) I wish to streamline my giving (1) I love PC (2) I inherited estate/ property that can't afford/ manage (3) I am downsizing (4) I can't afford to stay, but can't afford to leave (retained life estate) (1) I love PC (2) My heirs may be affect by estate tax (3) I may wish to protect heirs from visible high net worth (disqualify from special needs, target for litigation, spendthrift, etc.) (1) I love PC (2) My beneficiaries no longer need my insurance (3) I am exploring other assets as gift opportunities

Gift TypeRetirement PlanBequestCharitable Gift AnnuityDonor-Advised FundReal EstateCharitable Remaindr TrstLife Insurance Summaryis one of the most complicated assets to understand & potentially the most heavily taxed asset in an estate (up to 75%). Designate PC as a % beneficiary, removing that potentially heavily taxable asset from your estate and giving it tax free to PC. can leave PC a percentage or residual value of an estate. is an irrevocable gift to the Presbyterian Foundation, where the donor receives a regular fixed payment for life. At termination (annuitant's death), PC receives the residual value of the annuity. is a fund established where family members and friends may serve as advisors, making recommendations for fund grants (to be made at least annually). commercial or residential, developed or undeveloped can be a an excellent and practical out right gift or funding for a life income gift. Donating can alleviate the tax and management burden, esp. for those downsizing in hot markets with rocketing prices + taxes. provides a fixed (annuity) or variable (unitrust) dollar amount for life or a term of years. At the death of the income beneficiary or a set term of years, the trust assets must be used for charitable purposes. can designate PC as the primary-, co- or contingent-beneficiary of a policy through agent or HR office (no immediate income tax deduction is available for such designation). A transfer of ownership and policy rights may have a deduction. Amount to get started $1 + $10,000+ $150,000 +$200,000 +$1+ Difficulty5 minutes/EasyDays/Easy2 weeks/Easy to Moderate Months/Highly Complex Days/Easy ExampleDesignate PC beneficiary of a 401k. $100,000 could pass in whole to PC. Proceeds distributed to heirs would be taxed at a minimum $28,000 (assuming 28% tax bracket) and up to $75,000 (assuming maximum income & estate taxes). A PC member with a $1M estate might leave 5% ($50k) to PC and $950k to heirs. A PC member is 75 years. She transfers $100,000 of an appreciated asset or CD to a CGA. Annual payments are 6.1% (or $6,100) for life. She gets a tax deduction and part of each payment is income-tax-free. A member who wants to simplify their giving and teach stewardship to family established a $20,000 fund to fund PC mission and other causes by appointing self and grandchildren as fund advisors. A couple soon moving to a retirement community will sell their $1.2mm home (bought for $100,000). Donating the property avoids capital gains and brings significant tax deduction. A $250,000 annuity trust pays $15,000 a year for life. If income is less than $15,000 a year, the prinicpal will make up the difference. If the income is more than $15,000, the excess income is added to the principal. At termination, remaining principal goes to charity. A member no longer needs life insurance, purchased years ago for children. They donated the policy and claimed a charitable deduction for approximately the policy's cash surrender value. The proceeds were completely removed from their estate Secular Benefits (1) Asset removed from estate (2) Gift not taxable to PC, but would be to heirs (3) no immediate financial commitment (1) Fully deductible for estate taxes (1) Tax benefits (2) Higher income than CD's or Treasuries (3) More stable than equities (4) Significant support to PC (1) Charitable income tax deduction (2) No capital gains (3) Streamlined and efficient gifting mechanism (1) Charitable income tax deduction (2) No capital gains (1) Reduce estate size & potential tax (2) capture long-term capital gain without immediate tax (3) Create charitable deduction (4) Funding asset protected (1) Possible income, estate and gift tax relief (2) Remove asset from estate Does this fit you? (1) I love PC (2) My assets are locked up (3) I can not part with this today, becase I may need it in the future (4) My successors might redeem this at a great tax expense (1) I love PC (2) I want to make major gift (3) Assets are locked up, and I may need them in the future. (1) I love PC (2) I have financial resources, but they are working to earn my income (3) I could use a higher income and more stable source of income (4) I have capital gains on assets (1) I love PC (2) I want a culture of giving in my family (3) I want to support PC and other charities (4) I wish to streamline my giving (1) I love PC (2) I inherited estate/ property that can't afford/ manage (3) I am downsizing (4) I can't afford to stay, but can't afford to leave (retained life estate) (1) I love PC (2) My heirs may be affect by estate tax (3) I may wish to protect heirs from visible high net worth (disqualify from special needs, target for litigation, spendthrift, etc.) (1) I love PC (2) My beneficiaries no longer need my insurance (3) I am exploring other assets as gift opportunities

Planned Giving RESOURCES

Planned Giving RESOURCES

Planned Giving Fundamentals (Bare Minimums) Policies Leadership understanding of planned gifts Communications plan Other