1. MAKING AN IMPACT… “Blended Giving!”
Christopher L. Kelly
Vice President – Planned Giving Specialist
PNC Institutional Asset Management

2. Total 2015 Contributions $373.25 Billion

3. $ Billions Gifts Were Made in 2015…
5% Corporations
$18.45
How those
$ Billions Gifts Were Made in 2015…
9% Bequests
$31.76
16% Foundations
$58.46
71% Individuals
$264.58
Increased by 3.8% or $9.8 billion
Individuals are having the BIGGEST Impact on Philanthropy today!
* From Giving U.S.A

4. While giving increased in every category, the
Individual Donor IS the driving force of Philanthropy!
Corporate giving increased by almost12% (2.1% of the GDP and growth in the corporate pre-tax profits) or $18.45 billion.
Individual Gifting increased by 3.8% over 2014; $ billion, or 71% of the total giving.
Bequest gifts increased by 2.1% or $31.8 billion, while Foundations gave $58.46 billion or an increase of 6.5%.
Consider that bequests and Family Foundation contributions are “individual gifts”, then nearly 80% of the total for 2015 came from the Individual.
* From Charity Navigator, 2016

5. Professional Advisors believe that High Net-Worth Clients
make Charitable Gifts:
They are passionate about a specific cause or need.
They have a strong desire to give back (to share their good fortune).
They have a strong desire to have a Positive Impact on Society and the World.
30% of the Professional Advisors assume that HNW want to create a family legacy.
46% of the Professional Advisors believe that Charitable Giving is motivated by tax burdens as a means of relief…
* From the U.S. Trust Study – October 9, 2013: conducted on a range of more than 300 professional advisors nationwide; Comprised of Legal, Financial
and Tax Advisors.

6. The High Net-Worth Client agrees… but not completely.
To encourage charitable giving by the next generations (30%).
Because of their religious or spiritual beliefs (23%).
Because they believe it is an obligation of wealth (22%).
Oddly, only 10% of these clients cited tax reductions as their motivations; but most frequently, because they were asked…
55% of them say that they have had discussions on Charitable Giving with their Advisors; 51% say they had to initiate the conversation.
ALL of them feel that no matter who brings up the topic, it should be a meaningful dialog and be discussed at least within the first few meetings!
* From the U.S. Trust Study – October 9, 2013: conducted on a range of more than 300 professional advisors nationwide; Comprised of Legal, Financial
and Tax Advisors.

7. “BLENDING” OPPORTUNITIES For Maximum Results!
MAKING AN IMPACT!
“BLENDING” OPPORTUNITIES
For Maximum Results!

8. Our Impact Strategies – The Planned Giving Infrastructure
The Bequest under the Will or Estate Plan
A Private Foundation -or- Donor Fund
The Charitable Trust (Lead -or- Remainder)
The Charitable Gift Annuity -or- Pooled Income Fund
Insurance as the Gift or Supplementing the Gift

9. * Making the Most of This Emerging Workhorse for Major and Planned Gift Officers: National Conference on Philanthropic Planning, October 2013.

10. Strategic Planning Blending…
CHARITABLE REMAINDER TRUST

11. Charitable Remainder Trust (CRT)33 D
DONOR(S)
Charitable Gift of Appreciated
Assets
Charitable Income Tax Deduction
and Income Stream
BUYER
of the Asset(s)
Charitable Remainder Trust (CRT)
Gifting Assumptions:
The CRT Portfolio earns 6% total return
The CRT Distributes 5% Distributions
Donors – Ages 68 & 69 (21.9 year expectancy)
Gift to CRT: $500,000.00
Cost Basis: $100,000.00
Capital Gain: $400,000.00
Charitable Income Tax Deduction: $194,075.00
First Year Distribution: $ 25,000.00
Pre-Tax to Donors over time: $580,980.00
Remainder Gift to Charity: $616,196.00
Ultimate Distribution to the
Named Charitable Remaindermen
CHARITY
or CHARITIES

12. BUYER Charitable Remainder Trust CHARITY HEIR(S)
Outside of Donor’s
Taxable Estate D
DONOR(S)
Charitable Gift of Appreciated
Assets
Charitable Income Tax Deduction
and Income Stream
BUYER
of the Asset(s)
Charitable Remainder Trust
Wealth Replacement
Trust (Irrevocable Life Insurance Trust or ILIT)
Ultimate Distribution to the
Named Charitable Remaindermen
CHARITY
or CHARITIES
HEIR(S)

13. D
Real Estate
IRA Assets
Charitable Remainder
Trust
Family Business
CHARITY or
CHARITIES
Corporate Assets
Legal/Medical
Practices

14. Strategic Planning Blending…
CHARITABLE LEAD TRUST

15. Charitable Lead Annuity Trust (CLAT)
DONOR(S)
Charitable Gift of Cash or
Assets (with low appreciation)
Charity
-or-
Charities
Charitable Lead Annuity Trust (CLAT)
Gifting Assumptions:
The CLAT Portfolio in a Growth & Income
Strategy to generate charitable distributions.
Gift to CLAT: $1,000,000.00
Distributions to Charity: $ 500,000.00
IRS View of Gift: $ 500,000.00
Potential Tax Liability Based on $ 500,000.00
Ultimate Distribution to the
Named Non Charitable Remaindermen
CHARITY
or CHARITIES
In reality, the trust corpus is still in the portfolio; it and any growth will be transfer to the Heir(s)

16. Strategic Planning Blending…
CHARITABLE GIFT ANNUITY

17. Charitable Gift AnnuityD
DONOR(S)
Now Annuitant(s)
Immediate Charitable Income Tax Deduction and Distribution Amount Based Upon the Actuarial Life Expectancy of the Donor/Annuitant(s)
Charitable Gift of Cash
Charitable Gift Annuity
Gifting Assumptions:
The Donors Contribute $25,000 to the CGA.
ACGA Rates Offer a 4.5% Distribution: $1,125.00
Charitable Income Tax Deduction: $7,241.50
With a Gift of Cash Tax Free Income: $
Subject to Ordinary Income Tax: $
CHARITY
The CGA Program should always follow ACGA Rates & focus on Donor/Annuitant Education!

18. Strategic Planning Blending…
PRIVATE FOUNDATION
-or-
DONOR FUND

19. Private Foundation
How involved does the Donor want to be… Making the impact with the Private Foundation.
The 5 Primary Areas in Managing the Private Foundation:
Custody of the Assets: Safekeeping of Assets, Collecting Income, Cash Management, Reporting, Sales/Purchase of securities upon instruction.
Investment Management: Define desired impact on the charitable purpose, Determine the spending policy to meet the impact objectives, Identify the policies and guidelines (Asset Allocation/classes within allocation - UPMIFA Compliant). Avoid jeopardy investment/Excess Business Holdings/Self-dealing.
Organizational Management: Operating guidelines and procedures; Scheduled Meetings, notices, minutes (locations, per diem, expenses); Officer & Director Liability Insurance; Board Compensation Issues; Succession Planning.

20. Private Foundation
How involved does the Donor want to be… Making the impact with the Private Foundation.
The 5 Primary Areas in Managing the Private Foundation:
Grant Management: Grant Guidelines and Policies (Competitive -vs- Noncompetitive); Minimum Distribution Requirement; Exercise Expenditure Responsibilities (Grants to QUALIFIED 501(c)(3)- Individuals in need of indigent care, food, shelter, etc; NOT payment of personal pledges; Scholarships to students who meet established criteria (with approval of the Commissioner of the IRS); no “personal recognition”, oversight of grants award letters, checks and grant agreements. Minimum Grant Distribution over the current taxable year… Sometimes not as easy as it sounds.
Tax and Compliance: The area that least interests most “Donor/Grant- makers, and the most important!

21. Donor Fund(s)
How involved does the Donor want to be… Making the impact by utilizing a “Parent Organization”.
The Donor Advised Fund: Utilizes the Policies and Procedures of the Parent Organization, preapproved by the Internal Revenue Service.
Grant Making: The ability to lean on the Parent Organization for the actual distribution, as well as the due diligence connected to “Compliant Grant Making”. No minimum distribution requirement per se…
Ease in Contributions to the DAF: Many donors “procrastinate” all year, then try to “generate” charitable gifts before “Midnight 12/31 of any year….

22. Donor Fund(s)
How involved does the Donor want to be… Making the impact by utilizing a “Parent Organization”.
Public or Private Grants: The Donor can elect to allow distributions to be publicly recognized, or shielded by the Parent Organization for confidentiality.
Ease in establishing: The Parent Organization will provide a customized document; although it should still be reviewed by the Donor’s own legal advisor.

23. SUMMARY
Today’s Donor wants options in achieving their goals; The Philanthropic Industry research indicates that 71% of wealthy Donors make contributions strategically and have a plan for their charitable giving; particularly with larger “major gift” goals.
The result is that more HNW Donors utilize structured gifting vehicles; i.e., the Donor Advised Fund, Private or Family Foundation, Charitable Trusts or Charitable Gift Annuity to accomplish their goals.
If a donor does not feel comfortable, or does not feel they will achieve their objectives… they will seek out another alternatives (Charity and Advisors).

24. ACTION STEPS
Utilize the “Team” Approach, (Legal, Tax, Financial & Philanthropic).
Determine the Point Person: It’s a Team, one liaison can keep things simple and moving forward; the ease of communication can be the key to success.
Determine if ALL the goals have been disclosed, understood and the donor can confidently reiterate their intentions!
Document(s) should be reviewed – no matter where they have been generated.
Remind the Donor(s) to ENJOY their philanthropy; It’s a celebration of their achievements & their Message!

25. “We make a living by what we get… But we make a Life by what we give”
Winston Churchill

26. References & Resources
Buderus, Ashley & Smith, Gordon; Blended Gift, Eh? Making the Most of This Emerging Workhorse for Major and Planned Gift Officers. National Conference on Philanthropic Planning, October 2013.
Giving USA; 2016 Edition. This is the annual report on philanthropy, covering Download the Giving USA 2015 free report Highlights and purchase other Giving USA products at
The 2014 U.S. Trust Study of High Net Worth Philanthropy. This research is based on respondents throughout the U.S. with net worth of $1 million or more (excluding value of residence).
The 2013 U.S. Trust/The Philanthropic Initiative Study of Disconnects in Philanthropic Conversations between HNW Individuals and Professional Advisors.
The Chronicle of Philanthropy; monthly professional magazine,
Planned Giving Today; a quarterly professional periodical on strategy and charitable motivation,
Charity Navigator, 2016 Giving Statistics, .org

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