Introduction to Planned Giving Generous Stewardship Ministry The Free Methodist Church in Canada

PLANNED GIVING Planning Giving? 70% of Canadians do not understand what “Planned Giving” is Annual Gift Plan (giving while you are living) Planned/Estate Giving (giving after you are gone) 90% of Planned Giving is through bequests (wills) Most lawyers do not know/understand ‘Planned Giving’ or the effect it may have on estate taxes People do not know what they do not know…. Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)

You need a Current Estate Plan if you… Have Dependants Own a Home/Property Have RRSP/RRIF Have Insurance Policies Have Savings Owe Debt Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)

Without an Estate Plan… You have no say in how your property is distributed Church/Charities get nothing Your dependants may not receive enough Your children may receive too much too soon No opportunity to select a guardian Your estate may pay more taxes Your funds/property may be frozen (probate) You family may/will fight over it Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)

Download Biblical Principles on Stewardship VERSES Simplest Estate Plan... Give away all your possessions before you die “Go sell all your possessions and give the money to the poor, then come and follow me…” (Matt. 19:21) Owe nothing to no one Let no debt remain outstanding, except for the debt of love (Romans 13:8) Download Biblical Principles on Stewardship VERSES

Download Biblical Principles on Stewardship VERSES But Remember… Look after your family… Parents ought to save up for their children (2 Cor. 12:14) If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever (1 Tim. 5:8) Look after your neighbour… Love your neighbour as yourself (Luke 10:25-37) All the believers were together… selling their possessions and giving to anyone as they had need (Acts 2:44-45) Seek first the Kingdom… Do not store up for yourselves treasures on earth… but store up treasures in heaven (Matt. 6:19-20) Download Biblical Principles on Stewardship VERSES

Cultural Messages… He who dies with the most – wins You must protect your future & family (someone else will look after the rest) You can always have/use/need more You Deserve it, because You earned it! Give only after you are gone if there is anything left (spend it before you go) What I do with my money is my business (it is not your money!)

Download Biblical Principles on Stewardship VERSES Don’t worry – seek His Kingdom first and build a treasure that will last in heaven (Matt. 6:28-34) Don’t put your trust in wealth – but be rich in good deeds & willing to share (1 Tim 6) Enough is never enough (So stop trying to get enough) (Eccl. 5:11 ) You’ve been blessed – so that you can bless others (2 Cor. 8:14 & 1 Tim. 6:17-18) Download Biblical Principles on Stewardship VERSES

Be Prepared to Give an Account… “What did you do with what I gave you ?” (whether you thought it was a little or a lot) Download Biblical Principles on Stewardship VERSES

Plan to be Generous… GAIN all you can SAVE all you can GIVE all you can ~ John Wesley ~

Common Planned Giving Options Gifts of Cash & Property Interest Free Loans Bequests – gifts under will Life Insurance (outright/beneficiary) Publically Traded Appreciated Securities RRSP / RRIF (portfolios & partial draw-downs) Endowment Fund (FMCiC Foundation/Lorne Park Foundation) Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)

Start by Asking the Right Questions… How little do I need to keep? How much does my family really need (vs. want)? What is GOD saying to do with the rest? Heart Check – “Am I giving only to get something?” Tax Benefit, Recognition/Control/Legacy

Ask the Right Questions…. Does the plan need to be revocable / reversible? Bequests (Wills) Insurance Policies RRSP/RRSP

Ask the Right Questions…. Is it better to get the tax credit now? Outright Gift of cash, property, RRSP Portfolio Appreciated Securities Insurance Policy owned by Charity Interest Free Loans (interest portion) Charitable Gift Annuity Endowment Fund (unless a bequest) * Or have my estate benefit from a tax credit? Bequest under a Will RRSP / RRIF Insurance Policy with Charity as beneficiary Endowment Fund through Bequest* * Contact FMC Foundation or Lorne Park Foundation

Ask the Right Questions…. Will my choice be subject to PROBATE? Bequests under a Will (usually) Obtain advise from qualified planner/lawyer

Ask the Right Questions…. Does I need to generate income during my lifetime? Charitable Gift Annuity Charitable Remainder Trust Gift of Residual Interest/Property Obtain advise from qualified planner/lawyer

Ask the Right Questions…. Do I want the ministry to use my gift immediately? Outright Gift of Property/Cash Outright Gift of Appreciated Securities Outright Gift of RRSP/RRIF * Interest Free Loans Portion of RRSP/RRIF given now Endowment Fund * CAUTION – ensure you have enough to handle life without RRSP/RRIF

Ask the Right Questions…. Do I need a Lawyer? Financial Advisor? Tax Accountant? All of the Above?

Who are you going to call? “A wise man listens to advise” (Proverbs 12:15) “Without good direction, people lose their way; the more wise counsel you follow, the better your chances” (Proverbs 11:14) “Blessed is the one who does not walk in step with the wicked…” (Psalm 1:1)

Getting the Right Professional Advice Each Gift Plan is Unique; find someone that can explain it so that you can understand it With the right credentials: Certified Financial Planner (CFP) Chartered Accountant (CA) – specializing in financial planning Personal Financial Specialist (PFS) With the right values: Advisors with Purpose: advisorswithpurpose.ca Christian Stewardship Services: csservices.ca Responsible/Ethical Investing Obtain advise from qualified planner/lawyer

Bequests made to the Church Be both generous & specific in your will, but remember to keep it simple. The more complicated you make conditions, the harder (and costlier) it is for the ministry to use your gift. Remember that churches sometimes change their names and some close their doors; Word your bequest in such a way that if this happens, your executor can still honour your wishes. Don’t forget to keep on giving while you are living. Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)

Planned Giving Options Make church/charity beneficiary (after spouse) on RRSP / Insurance Add clause in Will – “bring Estate Taxes to Zero” through giving to named charities Consider “Child called Charity” Consider “Legacy Fund” where Church/Charity receives funds over 20 years Obtain advise from qualified planner/lawyer

Richard Radcliffe – Legacy Fundraising Consultant, UK Legacy Gifts Legacies are not about death – they’re about the future life of ministries and charities / people / the world. Legacies are life driven – death activated Legacies cost nothing now Legacies are an investment, not a gift – can you be trusted with it? Richard Radcliffe – Legacy Fundraising Consultant, UK

Bequests made to the Church Recommended statement (or similar wording): “For the (name of ministry/ongoing ministry) of (Local Church Name) Currently situated at (address of local church/Ministry). If, through the passage of time, this bequest becomes obsolete, permission is given to alter the terms adhering as closely as possible to my original wishes. Should the (Local church/ministry name) no longer exist, the funds should default to The Free Methodist Church in Canada, currently situated at 4315 Village Centre Court, Mississauga, ON L4Z 1S2, to be used for ongoing ministry. Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)

Gifts of Publically Traded Securities   Gifts of Publically Traded Securities Assumes top tax bracket (46%) Sell Shares and Donate Proceeds Donate Shares to the Church 1. Value of the Shares $50,000 2. Original Purchase Price $20,000 3. Capital Gain $30,000 4. Taxable Gain (Line 3 x 50%) $15,000 $0 5. Donation Tax Credit (Calculated at 46%) $23,000 6. Tax on Capital Gain (Line 4 x 46%) $6,900 7. Net Tax Savings (Line 5 - Line 6) $16,100 8 Donation Receipt $6,900 in tax savings by donating the shares to the church instead of selling them and donating the proceeds. (NOTE: The actual tax savings depends on your specific situation) Modified from "Planned Giving , The United Church of Canada, Gifts of Publically Traded Securities. Actual tax savings depends on your specific individual tax situation. Seek independent tax advice for your specific situation. http://www.united-church.ca/files/getinvolved/donate/howto/planned/resources_09.pdf Gifts of Publically Traded Securities Contact FMCiC Director of Administrative Services

What does the Church Need to Do? Celebrate Generosity Encourage Generosity Plan Generosity Thank Generosity

Church Gift Acceptance Policy “Spending of funds is confined to programs and projects approved by the church board. Each contribution restricted for use in such an approved program or project will be so used with the understanding that when the needs for such a program or project has been met, or cannot be completed for any reason as determined by the church board, the remaining restricted contributions will be used where needed most.” Notes: Every effort must be made to use funds for their original designated use Building Fund designation is something that would remain restricted (because there is always a building)

Planned Giving Policies & Guidelines Real Estate & Gifts in Kind Legal Issues Ethical Issues Practical Considerations Confidentiality Will we accept? Why or why not? Who will manage? Do we need Legal Advice? Is this Ethical? Have we used ‘Undue Influence’? When/How is the Charitable Receipt issued? What (if any) are the conditions? How do we acknowledge the gift?

Give Some Save Some Pay Some Use Some Church Gift Plan Give Some Save Some Pay Some Use Some Will we accept? Why or why not? Who will manage? Do we need Legal Advice? Is this Ethical? Have we used ‘Undue Influence’? When/How is the Charitable Receipt issued? What (if any) are the conditions? How do we acknowledge the gift?

What can you do now? Start a plan to be generous Steward all your resources to make the most of what God gives you – both now and after you’re gone Get the right advisor (s) (financial, tax, accounting) Get the right legal advice Get/Update will Live Generously now

There is one way, and there is no other under heaven. John Wesley “We ought not to forbid people to be diligent and frugal: we must exhort all Christians, to gain all they can, and to save all they can... What way then (I ask again) can we take that our money may not sink us to the nethermost hell? There is one way, and there is no other under heaven. If those who gain all they can, and save all they can, will likewise give all they can, then the more they gain, the more they will grow in grace, and the more treasure they will lay up in heaven." C Cited from The Works of the Rev. John Wesley, vol. XV (London: Thomas Cordeux, 1786).

Generous Stewardship Ministry The Free Methodist Church in Canada