Karen Ciegler Hansen, JD, Felhaber Larson Fenlon & Vogt Holly McDonough, MA, Minnesota Medical Foundation

GOOD Individual giving has great resiliency during difficult times 59% of nonprofits experience increased giving in poor economic times Organizations with diversified fundraising programs are in a much stronger position to weather an economic crisis BAD 60 of the leading US foundations reported a 28% decline in assets in of the 80 largest donors in the U.S. derived their wealth from finance and investment banking. UGLY Economic uncertainty is one of the chief enemies of philanthropy Fund Raising Services – Strategic Consulting “A Current Overview of Philanthropy and the Economy” March 2009

Nancy and Ed:65 years old Two Children:Betsy - 42 years old Bob - 40 years old Assets:Home$ 500,000 IRA’s 1,000,000 Stocks and bonds 500,000 Lake home 400,000 Life insurance 600,000 Total $3,000,000

Calendar YearFederal Estate Tax Exemption MN Estate Tax Exemption WI Estate Tax Exemption 2002$675, $1,000,000$700,000$675, $1,500,000$850,000$675, $1,500,000$950,000$675, /2007$2,000,000$1,000,000$675, $2,000,000$1,000,000No estate taxes 2009$3,500,000$1,000,000No estate taxes 2010No estate taxes$1,000,000No estate taxes 2011$1,000,000 The table above summarizes the current tax laws. Congress and the state legislatures continue to revisit these amounts. If you are a non-Minnesota resident or if you own real estate in another state, that state’s exemption may also be different.

Nancy and Ed:65 years old Two Children:Betsy- 42 years old; Divorced; 2 children, 10&12 Bob - 40 years old; Has lost job; 2 children, 3&5 Assets:Home$ 500,000 IRA’s 1,000,000 Stocks and bonds 500,000 Lake home 400,000 Life insurance 600,000 Total $3,000,000

Betsy can’t keep up with cost of living Bob may lose his home Their assets have decreased by 30% in last year Estate Taxes Planning Options: Depends upon their goals How much do they want/need to leave to their children? To their grandchildren? How much do they want to leave to their favorite non-profits?

Estate Tax considerations are not of the greatest concern Generation differences in philosophies Family situations are changing

Current Gifts Future Gifts Donor Concerns How to Acknowledge and Address Concerns

Nancy and Ed:65 years old Two Children:Betsy- 42 years old; Divorced; 2 children, 10&12 Bob - 40 years old; Has lost job; 2 children, 3&5 Assets:Home$ 500,000 IRA’s 1,000,000 Stocks and bonds 500,000 Lake home 400,000 Life insurance 600,000 Total $3,000,000

If all beneficiaries are equal priority: Betsy, Bob, non-profits If Betsy and Bob are their highest priority If grandchildren are their highest priority If want to guaranty a certain dollar amount to family: e.g., 10% to non-profit as long as children each receive $1,000,000; or $1,000,000 to each child and then excess to charity (but charity won’t exceed 1/3 of estate) or all IRA to charity and balance to family If want to guarantee a certain percent to charity: 1/3 to charity, funded first with IRA; or ? CRT

Back to Basics Be Confident Consider More Planned Gifts Be Open to Possibilities Be Creative Be Realistic Collaborate Communication Is Critical Proactive With Own Budget and Programs Messages Communicated to Donors and Professional Advisors Future of Fundraising and Communication

1. Keep your donors close 2. Provide quality stewardship 3. Make a compelling case 4. Communicate consistently and persistently 5. Ask!

Be honest and transparent Be flexible Engage them without their wallets

Enhanced acknowledgement Enhanced engagement

Why this cause? Why your organization? Who benefits?

Ongoing impact Multiple options Target your efforts

Mission remains critical Opportunities for giving Focus your efforts Do the hard work!

Karen Ciegler Hansen, J.D. Felhaber, Larson, Fenlon & Vogt 444 Cedar St., Ste St. Paul, MN Holly McDonough, M.A. Director of Development, Gift Planning Minnesota Medical Foundation University of Minnesota 200 Oak St. SE, Ste. 300 Minneapolis, MN