1. Kathryn W. Miree & Associates, Inc.

2. 1. Gift planning focuses you on donor relationships 2. Gift planning allows you to engage with donors 3. Gift planning increases donor gift capacity – it expands gift options 4. Making a planned gift commitment increases annual giving 5. Knowing about the planned gift (and stewarding) should increase the estate commitment

3.  The role of planned giving  The benefits of gift planning to your development program  Looking at planning from the donor’s perspective  Elements for success in gift planning  Not a lot of grueling detail on gift forms – gift options are simply tools to facilitate donor conversations (not products!)

5.  You can’t do it alone  The internal case is for staff and board  Why should you engage in planned giving?  Where are the opportunities?  What do you expect to achieve?

6.  Gift planning that considers ◦ Donor’s personal goals ◦ Donor’s charitable goals ◦ Most effective gifts  Effective planning enhances all gifts ◦ Expands opportunities for major gifts  No longer narrow definition ◦ Not deferred alone ◦ Involves donors, advisor, and charity

7.  Annual fund  Major gifts  Planned gifts  Capital campaigns  A single donor – think of the maturity of the program and the maturity of the donor

8. ANNUAL GIVING MAJOR GIVING PLANNED GIVING Donor Commitment Donor Involvement

10. StateNumber of Returns Number of Itemizers Number of Charitable Deductions Dollar Value of Charitable Deductions U.S.139,230,75 2 49,597,995 (35.62% of all filers) 41,366,929 (83.4% of all who itemized) $182.14 Billion

11. Individuals $229.03 Corporations $15.69 Foundations $38.52 Bequests $23.15 Total: $306.39 Billion

12. RecipientAmount (billions)% of Total Religion$102.3233.4% Education$43.3214.1% Human services$29.649.7% Foundations$27.739.1% Public society/benefit$22.657.4% Unallocated giving$23.737.1% Health$23.157.6% Arts, culture humanities $13.674.5% International affairs$13.224.3% Environment, animals$6.962.3%

13.  Intergenerational transfer of wealth from 1998-2052  $41-$136 trillion in total dollars  $6-$25 trillion in gifts to charity  Interesting observations on giving attitudes and practices of wealthy

15.  2006 Study  Focused on philanthropic profile, motivations and goals of high net worth individuals (income >$200,000, assets >$1 million)  3.1% of all U. S. households  98% of group made gift to charity in 2005

16. Type of Gift% Who Have Created Capital campaign64.6% Bequest41.2% Stocks/mutual funds31.8% Created foundation19.5% Created donor advised fund15.9%

17. Motivation% of Respondents Citing Meet critical needs86.3% Giving back to society82.6% Reciprocity81.5% Bring about a desired impact68.5% Nonprofits should do what government cannot do 64.4%

18. Factor% of Respondents Citing Spent less money on administration 74.8% Donor can determine impact of gift 58.3% Donor felt more financial secure 52.0% Donor received better return on investments 46.6% Donor not already financially committed 40.2%

19.  Three top reasons donors stopped giving: ◦ “No longer feel connected” ◦ Wanted to support other causes ◦ Solicited too often  Sources of advice: ◦ 2006: Peers and nonprofits ◦ 2008: Professional advisors  Donors cite the desire to “give back to the community” as the primary motivation for giving; public recognition was of little interest.

20.  Setting an example for children is an important motivation in giving.  Parents are the leading source of philanthropic education.  Donors expect transparency, accountability, and protection of privacy from the charities they support.

21.  Report in March 2007  Combined high net worth with surveys in Indiana, St. Louis, Memphis  Goal to identify potential bequest donors, and donor motivation  48.4% had a will ◦ FindLaw 44.4% (2002) ◦ NCPG 42% (2000)

22. AgeBequest StudyHNW Philanthropy Study 30-408.9%1.4% 40-5028.1%9.4% 50-6-21.9%19.3% 60-7020.6%27.5% 70-8011.0%25.1% 80+8.9%17.3%

23. AgeBequest Study% of Sample 30-4018%18.2% 40-5028%28.8% 50-6024%18.3% 60-705%10.9% 70-803%7.8% 80+1%3.7%

24. >$25,000$25,000 to $49,999 $50,000 to $74,999 $75,000 to $99,999 $100,000 + Bequest currently in place 6.6%7%7.6%6.5%10% Would consider putting a bequest in place 28.4%34.6%28.8%25.99%35.63%

26.  Assumption One: The individual wants to leave his or her entire estate to family.  Assumption Two: The individual is driven by tax avoidance.  Assumption Three: The individual has fully thought through the issues that impact estate planning.

27.  A checklist for goal setting ◦ Providing for spouse ◦ Providing for family (children, grandchildren, extended family) ◦ Addressing special needs – educational, rehabilitation, medical, remedial ◦ Desire to maintain control ◦ Desire to allow flexibility ◦ Establishing (meeting) family values ◦ Support specific charities

29.  Accelerate gifts destined for charity that generate no income  Accelerate a gift of a home or farm by making a retained life interest gift. What if the client needs to leave? ◦ Bargain sale ◦ Bargain sale of the remainder interest ◦ Bargain sale of the remainder interest for a gift annuity ◦ Sale, splitting the proceeds

30.  Make deferred gifts with tax burdened assets  Context for an IRA Rollover Gift  Use a gift to care for a disabled child

31. $100,000 6.1% Charitable Gift Annuity Couple Ages 78, 82 Principal amount$100,000.00 Charitable deduction$40,373.00 Annual income to parents$6,100.00 Tax-free portion$4,623.80 Ordinary income portion$1,476.20

32. Current Pay Annuity Couple Ages 70, 71 Contributed amount$25,000 Charitable deduction$6,741.75 Annuity (5.2%)$1,300.00 Tax-free amount$908.70 Ordinary income$391.30

33. $250,000 Bequest of Retirement Plan to Family $250,000 Bequest of Retirement Plan to 5% 20-Year CRUT Total Estate$5,000,000 Total Taxes on $250,000 IRA $160,625$71,490 Effective Tax Rate64.25%28.6% Net Bequest$89,375$250,000 Net Tax Savings$89,135

35.  Your role ◦ Engage the donor ◦ Develop a vision for the gift structure and impact ◦ Provide options to achieving the goal (optional)  The donor’s role ◦ Brings charitable intent ◦ The assets ◦ Determines the gift form

36.  The donor’s advisors ◦ Attorney ◦ CPA ◦ Insurance professional ◦ Financial planner ◦ Trust officer ◦ Stock broker ◦ Real estate agent/broker

37.  Do you have charitable organizations that you currently support on an annual basis?  Would you be interested in including any of these charities in your will or estate plan?  If there were a way to shift dollars from taxes to charity, would you be interested in exploring those options?

38.  What are your values?  What charitable interests have you pursued as a result of your values?  What have you learned from your giving?  What is the most satisfying gift you have made?  What do you want to pass to your children?

40.  Publicly Traded Securities  Mutual Funds  Privately Traded Securities  Real Estate Tangible Personal Property Intellectual Property E-Bonds

41.  Charitable Gift Annuities  Charitable Remainder Trusts  Pooled Income Funds

42.  Benefits to the donor ◦ Allows the donor to plan the disposition of estate and to assign priorities to meet goals ◦ Allows donor to make a larger gift than with an outright gift ◦ Allows the donor to “invest” in the future of the nonprofit  Benefits to the nonprofit ◦ Simple ◦ Easy ask ◦ Builds commitment ◦ Builds future income stream

43. Form A specific dollar amount A percentage of the total estate A percentage of the residue A specific class of property A specific asset All of the remainder A contingent bequest A formula distribution

44.  Beneficiary designation differs from gift of policy because decedent owns policy, and it’s in his estate. However, full amount passing to charity is deductible.  Life insurance policies have often extended beyond the need for which they were purchased. They’re easy to give up.  The “ask” is easy. Donors may not have considered this alternative.

45.  Retirement accounts include pension plans, profit sharing plans, stock bonus plans, Keogh Plans, 401(k) plans and IRAs.  These assets have income tax consequences at death of owner in addition to estate tax consequences  Many individuals now have substantial assets in these plans  These plans are not disposed of through will (generally)

47.  You’ve got a relationship with the donor  Simply take it to the next level  How did you first get involved with Boys & Girls Clubs?  What is the most important thing we do?  Look out ten to twenty years – what is your greatest concern?  What can you do to help us address that concern?

48.  Information is critical to all gift officers, now and in the future  Record it in the system, where others have access  Always check before making a call, so the info is fresh

49.  Use the information you get to develop your relationship with that donor  Invite them to events in their area of interest  Tell them about advances in the field – by letter, e-mail, or phone  Continue to develop your knowledge  Share ways to meet their objectives

51.  Ask your 5+ year donors and major gift donors to become a member of the legacy society  Listen carefully to identify personal needs that may be met through planned gifts  Be sensitive (and ears and eyes open) for substantive financial transactions

53.  Governing documents and state law ◦ Articles of incorporation and by-laws ◦ Trust document ◦ Tax determination letter ◦ Board resolutions ◦ Other legal document ◦ Licensing ◦ UMIFA/trust investment standards ◦ Trustee laws ◦ Probate laws

54.  Mission and purpose  Case for long-term support ◦ Compelling ◦ Urgent ◦ Outcome oriented ◦ Short  Strategic plan

55.  Board structure ◦ Assess your needs ◦ Assess your structure (strengths/weaknesses) ◦ Fill in the gaps  Fiscal policies and procedures  Gift acceptance policies  Stewardship policies  Investment management policies

56.  Endowment structure ◦ What happens to planned gifts? ◦ Is long-term funding a priority? ◦ Is long-term funding in strategic plan? ◦ How does board feel about endowment? How about staff?  Database and database management ◦ What records are maintained? ◦ How are those records maintained?

57.  Reporting and measurement  Planned giving recognition society  Staff evaluation ◦ Staff structure ◦ Job description/evaluation ◦ Allocation of time

58.  Staff ◦ Goals ◦ Annual Evaluation

59. Time Spent on PGPercentage 0%1.7% 1-24%39% 24-49%15.6% 50-74%11.8% 75-99%14.8% 100%17%

60.  Donor potential ◦ Donor data ◦ Donor data collection ◦ Donor depth ◦ Segmentation of donors ◦ Top 100/200/300

61.  Marketing ◦ Marketing strategy ◦ Marketing activities ◦ Marketing materials  Branding  Brochures  Newsletters  Other communications

62.  Marketing ◦ Website  Easy to find?  Identify and mission clear?  Updated often?  Useful data for browsers?  Can you collect information?  Is staff on the site?  Does charity check regularly?  Calendar?  Monitoring traffic?  Information for advisors?

63.  Marketing ◦ Professional advisor outreach  Database of top advisors in market  One page information sheet  Sample bequest language  Professional advisory council  Newsletters  Seminars

64.  Marketing ◦ The marketing plan  Is there a plan?  When adopted and reviewed?  What are the key activities?  Do the activities  address key donor segments  reflect reality of geography  properly staffed  Measurable goals and objectives?  Staff responsible?  Timeline?

65.  Marketing ◦ Annual evaluation  Objective review  Number of donor calls  Number of gifts or commitments  Dead end calls  Gift proposals  Seminars/attendees/follow up calls  Follow ups from mailings  Subjective review  Donors qualified before call?  Purpose of call clear?  Could you follow up?

66.  Marketing ◦ Annual evaluation  Seminars  Collateral materials  Recognition society  Professional advisory board  Board training

67.  Understand the importance of building relationships – long-term relationships – with donors  Think of gift planning as an extension of your current relationship.  No magic beans.  Steward your donors  Measure your results