1. Charitable giving as an estate planning tool
Presentation by
Michael vuocolo and Jennifer Wilson

2. Presentation Overview
About FCFP
Why Donors Give?
Ways to Give
Exploring Fund Types
Philanthropic Legacies at FCFP
Professional Advisor Partnerships

3. About FCFP
Creating powerful communities through passionate giving®

4. Community Foundations
According to the Council on Foundations, community foundations are grantmaking public charities that are dedicated to improving the lives of people in a defined local geographic area.
Assets range from less than $100,000 to more than $1.7 billion
Give an estimated $5 billion annually to a variety of nonprofit activities in fields that included the arts and education, health and human services, the environment, and disaster relief
More than 1,030 community foundations operate in urban and rural areas in every state in the United States
FCFP is the first to be founded among the 44 community foundations in Pennsylvania, the 9th oldest in the country.

5. Fcfp Governance National Standard Reaccreditation
FCFP Board of Directors
Southern Tier Regional Advisory Board
Williamsport Lycoming Regional Advisory Board
FCFPA Properties Board of Directors
Staff

6. Investment policy
The funds are pooled and invested together according to a strict asset allocation methodology. The pool must be re-balanced as often as necessary to maintain the required allocation among 16 different asset categories.
The investment objective of the Foundation’s Charitable Pool is to meet the payout percentage, plus inflation, plus 0.5% of underlying growth in the pool (net of investment management fees).
Our endowment is managed by SEI ( headquartered in Oaks, Pennsylvania.

7. Endowment Spending policy
Currently at 5% of a rolling 20 quarter average and determined annually.
Of this percentage, 4% is used for grants, scholarships and income distributions.
The remaining 1% is retained by the Community Foundation for the administration of the fund(s).

8. 2017 results $96M as of 12/31/17 Return on Endowment 15.9%
366 Funds under Management
$4.1M in Grants and Scholarships
$6.3M in Gifts
11 New Funds

9. Why Donors Give
“One person with passion is better than forty people merely interested.” E. M. Forster, novelist

10. National Statistics Total contributions exceeded $390 Billion in 2016.
72% from individuals
15% from foundations
8% from bequests
5% from corporations
Top recipient categories included
32% to religious affiliations
15% to education
12% to human services
10% as gifts to foundations (community and private)

11. National Statistics
Giving to education and societal issues increased for the seventh consecutive year.
Donations to environmental and animal care saw the largest increase year over year.
For the years between 2012 – 2016 arts/culture and human services were the second fastest growing sectors.
Overall giving to foundations and healthcare experienced stronger growth in 2016 when compared to prior years.
When compared to FCFP’s own regional grantmaking for the past year, health and human services was the largest segment (36%) followed by civic (24%), arts/culture (10%) and youth (9%).

12. National Statistics Individual adults reached $1,155 in annual giving
Average household giving reached $2,240.
High net worth charitable giving (philanthropy) reported an average dollar amount in excess of $25,000.
28% of high net worth households plan to increase their giving in the next three years.

13. Donor motivation Believes in the mission of the organization 97%
Believes their gift can make a difference 94%
Wants to support the same causes annually* 92%
Tax saving benefit
*this statistic represents one of the ways to identify a potential
planned giving client/prospect

14. Tax Benefits Donor Benefits with Planned Giving
Effective planned giving can provide income in a tax efficient manner
Planned gifts of appreciated property can help limit capital gains tax
A well designed estate plan can help support the transfer of wealth and limit tax payments
Required IRA distributions can avoid income tax if paid to a qualified charity

15. Planned giving prospects
Clients who have accumulated appreciated assets such as stock or real estate
Clients who are approaching or are over 70½
Clients who have supported an organization consistently for a period of several years
Clients who have recently or are planning to transfer/sell business
Clients who are single or married with no children
Grandparents who are focused on providing for their grandchildren (i.e. education)

16. Planned giving prospects
Key phrases to listen for when meeting with your clients –
I am concerned I will have cash flow problems
I am looking to transfer ownership of my business to my children
I am looking to sell or liquidate some of my assets
I have estate tax concerns
I am concerned about all the taxes I will have to pay

17. Ways to give
“Life's persistent and most urgent question is 'What are you doing for others?” Martin Luther King, Jr.

18. Outright gifts Cash Appreciated Securities
Gifts of Property (Real Estate and Personal Property)
Gifts in Kind
Charitable IRA Rollover

19. Planned Gifts Estate Bequests Life Insurance Retirement Accounts
Life Income
Charitable Gift Annuities
Charitable Remainder Trusts

20. Things to Consider with your client
Unrestricted versus Restricted Gift
Budget Relieving versus Budget Enhancing
Nonprofit Viability
By-laws
Gift Acceptance Policies
Good Governance
How FCFP Can Help

21. Available FCFP fund types for planned giving

22. Support Operations of a Donor’s Favorite Charity
Designated Funds
79 Funds
Total Assets - $14.3 million

23. Support a Geographic Area or Category of Nonprofits
Field of Interest Funds
23 Funds
Total Assets - $12.4 million

24. Pass Philanthropic Legacy to the next generation
Donor Advised Funds
26 Funds
Total Assets - $5.2 million

25. Meet Everchanging Community Needs
Administrative Endowments
14 Funds
Total Assets - $6.6 million
Unrestricted Funds
80 Funds
Total Assets - $40.6 million

26. Support students above their financial aid packages
Scholarship Funds
74 Funds
Total Assets - $6.1 million

27. community foundation and private foundation comparison
Private Foundation vs Donor Advised Fund (DAF)
- Separate legal entity Housed at a non-profit organization
- Excise tax of up to 2% of net investment income - No tax on investment income
- Expensive to establish Minimal administrative fees
- Requires large dollar investment - Minimum fund requirement of $25,000
- Files Does not file separate 990
- Board of Directors No separate Board of Directors
- Paid staff No paid staff
- Makes decisions on grants/investments - Donor makes recommendations
- Minimum required payout of 5% of - No payout is required
fair market value.

28. Philanthropic legacies
“All good men and women must take responsibility to create legacies that will take the next generation to a level we could only imagine.” Jim Rohn

29. Mattie e. clark Fund 1925 $350,000 Estate Gift Unrestricted
Current Market Value - $1.1M
Grants over time – $418,579 (since 2007)

30. Ralph and Josephine smith fund
1995 anonymous founding gift of $500,000
$1M estate gift
Field of Interest supporting residents of Northumberland County
Scholarship
Preference to specific nonprofits
Established a committee
Current Market Value $4.7M
Grants over time $2.2M (since 2007)

31. Legacy of Tom Rider Last Will and Testatment – 1975
Estate Gift of 867 acres and $200,000 – 1988
Nondevelopmental Lease – 2012
Royalty Income – 2015

32. Fund Values as of December 31, 2017
Thomas J. Rider Fund - $265,000
$73,095 in grants
Rider Park Endowment Fund - $3M
$628,925 in grants
Thomas Rider Royalty Fund for Lycoming County - $1M
$31,800 in grants
Thomas Rider Royalty fund for Susquehanna Health - $261,000
$3,975 in grants

33. Professional Advisor Partnerships
“Coming together is a beginning, staying together is progress, and working together is success” Henry Ford

34. How Fcfp works with Professional advisors
Donor team of advisors
Legal
Tax
Financial
Charitable
Door Opener Society and annual meeting with advisors
Local advisors in the FCFP endowment
$500,000 threshold
19% of long-term pool is held by four local institutions
Estate bequest language and preparing the fund document

35. Tools to start the conversation
Professional Advisor section of FCFP website:
Marketing material
Some suggestions to encourage discussion with your clients –
45% of Americans do not have a will
$21 Billion in bequests came from estates greater than $1 million
$6 Billion came from estates less than $1 million
It is reported that 37% of wealthier donors have a will with a specific charitable provision
It is estimated that 13% of potential donors have a planned giving vehicle with a charitable beneficiary

36. questions