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How, when and why to secure planned gifts that bring real returns.Components and relative benefits of bequests in wills, annuities, a variety of trusts, retirement accounts and other planned gifts to nonprofits are described.Why nonprofit board trustees, senior managers, advancement professionals, every staff member and stakeholders can help stimulate the easiest gifts to make – planned gifts that secure an institution’s future!Roles of planned giving newsletters, seminars, financial and legal advisors, board trustees and individual visits.
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Sponsored by: A Service Of:
Best Practices to Advance Planned Giving
Rod Miller
October 19, 2011
Sponsored by: A Service Of:
Advising nonprofits in: • Strategy • Planning • Organizational Development
www.synthesispartnership.com
(617) 969-1881 [email protected]
INTEGRATED PLANNING
Sponsored by: A Service Of:
Affordable collaborative data management in the cloud.
Sponsored by: A Service Of:
Today’s Speaker
Rod Miller CEO,
Executive Institutional Advancement Exchange
Hosting: Sam Frank, Synthesis
Partnership
Assisting with chat questions: April Hunt, Nonprofit Webinars
Best Practices to Advance Planned Giving Rod Miller, CEO
Executive Institutional Advancement Exchange
www.ExecIAE.com
What is a Planned Gift?
1. Made during an individual’s life
2. Benefits nonprofit (NPO) in future
3. After death of the individual and/or beneficiary
2 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Advancement Best Practices on LinkedIn
Why, when and how to plan and execute best practices for institutional advancement - share insights, ideas and creative
ways to transform advancement efforts.
For board trustees, CEOs and leaders with vision and commitment to best practices for growing revenue,
philanthropy and marketing impact.
http://www.linkedin.com/groups?gid=3874810
3 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
What are Best Practices?
A best practice is a method, process, activity, incentive,
or reward that is believed to be more effective at
delivering a particular outcome than any other
technique, method, process, etc. when applied to a
particular condition or circumstance…
... en.wikipedia.org/wiki/Best practices
4 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Advancement Best Practice Steps
1. Assess values, case, needs, goals and resources.
2. Review advancement strategy, process and behavior on-site.
3. Benchmark internally.
4. Engage new, key stakeholders.
5. Select and empower right leaders.
6. Sign-onto ROI performance: outputs, process and behaviors.
7. Establish pertinent, high-speed follow-through.
8. Reference benchmarks of world’s best practice.
9. Review trajectory and reward improvement.
10. Reassess stakeholder engagement.
5 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Best Practices to Propel Giving
1. Discover new key stakeholders.
2. Recruit right leaders (volunteer and staff).
3. Empower communications (pertinent and quick).
4. Grow the annual fund and mega-gifts (including
planned gifts).
5. Assure follow through (3600 collaboration).
6 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Common Planned Gifts
• Outright gift in future (even to annual fund)
– Stocks/bonds
– Real estate, antique or other property
– Retirement fund
• Trust instrument or bequest in Will
– Irrevocable
– Revocable
• Annuity or variable asset
• Life insurance
7 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Bequest in Will
• Make and review
– Seek % of estate
– Restricted/unrestricted
– Beware narrow terms of application
• Change with Codicil
– Have wording readily available
(obtain legal advice)
8 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Planned Giving Priorities
• Plan energetic engagement.
• Understand planned gift principles.
• Respect individual’s family/financial needs.
• Avoid specific advice or influence.
• Communicate creatively and frequently.
9 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
1. Discover Planned Gift Potential
“Easiest gift to make…”
• Engage planned gifts task force at board-level
• Gather information from members of institution
• Mine institution’s database
• Showcase benefits from planned gifts
• Frequent news items/newsletters/updates
• Information seminars on planned giving
• Inform financial/legal professionals
10 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
NPO Stakeholders
Board
•Network
Previously Involved
• Board
• Staff etc
• Clients
• Contacts
• Professions
Community Affiliates
• On/Near Site
• Any who value services
NPO Family
• Management
• Staff
• Clients
• Patients
• Students
• Parents
11 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Why Emphasize Planned Giving
Estimated 50% to 66% people die without a Will
USA (66% of African-American/75% of Hispanic populations)
Canada, Australia, Great Britain…
Rapidly growing assets of ageing baby boomers
12 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
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2. Recruit Right Leaders – Task Force
Purpose: identify and help engage new potential donors
– understood limited term > “thanks” > new blood
Good leadership – succession, mix board trustees and peers
– Diversity of background, sex, occupation, geography, etc (“right” people)
Action meetings/agenda/minutes
– Strong staff support
– Invited, informed, involved and thanked
– Interesting meetings (pre-planning with chair, solicitation materials)
14 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Build Relationship for Change
Discover who cares
Engage
CEO
Share interests & values
Listen
Suggest options
Partner for
remedy
15 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Empower Planned Giving Officer
• Make/coordinate minimum 5 visits per week, in year-1
• By year-3, some closures on planned gift instruments
• Within 5-7 years, planned gifts may provide income
• Some estimate planned gifts at 10 times what’s notified
16 © Executive Institutional Advancement Exchange LLC 2011
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Align Expectations and Efforts
• 100-day plan to execution
• Personal engagement
(board trustees, CEO, advancement)
• Initial 5 to 7 year commitment
© Executive Institutional Advancement Exchange LLC 2011
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3. Empower Communication
“Good advice for gift planners: stop talking about tax savings and the technical aspects of gifts.
Instead, combine the emotional appeal of your mission with the impact the donor’s gift can make, and you will have a winning formula.”
- Phyllis Freedman, “Planned Giving Blogger”
July 20, 2010
18 www.ExecIAE.com
Value of Planned Gift to Donors
• Opportunity to make a larger gift.
• Avoid capital-gains tax.
• Retain individual income.
• Convert a highly appreciated asset.
• Set value of assets for tax purposes.
• Cut taxes on transfer of owned business.
• Pass assets to heirs and/or NPO.
23 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Types of Givers
• Impulsive
• Habitual
• Careful
• Thoughtful
© Executive Institutional Advancement Exchange LLC 2011
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Most Effective Communication
Personal visits by
1. board-level peer
2. CEO
3. advancement professional
Additional visits by board member/CEO/professional
Each followed by a personal
1. letter (with visit/telephone follow-up)
2. phone call, with brief follow-up letter
25 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Integrate Marketing Support
1. Brochure/web – How to make planned gift to NPO
2. Word-of-mouth, viral – Launch and repetition: “NPO accepts planned gifts/how”
3. NPO web/publications/mailings – Advertise: “Photo + 50-150 word stories on who benefits”
4. Community affiliates/community news – For information: “Photo + 250 word story on who benefits”
5. Estate, wealth management sessions – Specialist information offered by NPO
6. NPO planned giving newsletter
7. Media-worthy stories
26 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Overview Planned Gift Vehicles*
Planned Gift
Elements
Charitable
Gift
Annuity
Deferred Charitable
Gift Annuity
Charitable Remainder
Trust
Grantor Lead Annuity
Trust
Retained Life Estate
Income Beneficiary
No more than 2 individuals
No more than 2 individuals
One or more individuals
NPO None
Holds Remainder NPO NPO NPO Donor NPO
Rate of Return Funct. Age/# beneficiaries
Funct. Age/# beneficiaries
Min. of 5% market value
Variable Not Applicable
Payments to Beneficiary
Fixed amount Fixed, deferred payment
Fixed percentage
Fixed amount None
Term Life income Life income Life inc. ben… Life/spec. term Life of spouses
Federal Taxation Portion Portion Inc. tax-free… May be... Appraise value
State/City Tax Varies Varies Varies Varies Varies
Rec. Min. Gift $10,000 $10,000 $100,000 Open Personal Res…
Accepted Assets Cash/stock Cash/stock Cash/stock… Cash/other… Real Estate
Rec. Min. Age of Beneficiary
65 35 60 No minimum To set
27 • For Example Only: obtain advice from qualified
lawyers on all details
Comparison of Options
Computer simulations available
to project examples, based on
variables of age, asset base,
percentage returns (where applicable)…etc.
28 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Inform Legal/Finance Professionals
Keep interaction based on “information-only”
• Lunch/breakfast briefing about NPO (on-site)
– Tour examples of how bring benefit
– NPO planned giving materials
Presented by CEO
• Visits/mailings: NPO planned giving materials
29 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
Estate/Tax Planning Update
• Seminar on ways to
– Reduce taxes on income, capital gains and estates
– Use a trust to control assets and pass assets to heirs
– Plan a financially secure retirement
– Bypass capital gains taxes on stocks, real estate etc.
– Plan gift arrangements to maximize your estate and family inheritance
Presented by qualified (institutional) lawyer… free
… no solicitation
30 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
4. Grow Mega-planned Gifts
Older people
Assets
% of estate
31 © Executive Institutional Advancement Exchange LLC 2011
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Family Wealth Management
• (Live-in) Workshop(s) on ways to
– Sustain philanthropic intent of parents/grandparents
– Use various trusts to save income, gift and estate taxes
– Provide for children’s or grandchildren’s education/future
– Obtain valuable tax and other financial benefits from gifts
– Plan for IRA distributions and beneficiary arrangements
– Establish or maintain family foundation
Conducted by NPOs professionals, with qualified (institutional) lawyers/financial planners… free
… no solicitation
32 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
5. Ensure Follow-through
One well-briefed
NPO point-of-contact
for
Planned Giving inquiries
33 © Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com
100-day Plan to Execution
1. Expect R.O.I.
2. Planned gift task force
3. Gift acceptance policy
4. Agree team actions
5. Identify high potential
6. Schedule visits
7. Follow-through benchmarked
to best practice
…Secure initial results
© Executive Institutional Advancement Exchange LLC 2011
www.ExecIAE.com 34
Measure R.O.I. Benchmarks
1. Strategy
How well matched: stakeholder
values/mission
2. Operations
What pace: discovery, engagement, asking
3. Behavior
What priority: on big opportunities Goal Build capacity of each Planned Giving Officer
© Executive Institutional Advancement Exchange LLC 2011 www.ExecIAE.com
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Suggested Resources
Gerard M. Condon, Esq and Jeffrey L. Condon, Esq, Beyond the Grave: the right way and the wrong way of leaving money to your children (and others), New York, Harper, 2001 Rod Miller, “Beyond Benchmarking Institutional Advancement” in Excellence in Communicating Organizational Strategy, Albany, NY: State University of New York Press, 2001 (sample@ GOOGLE)
……………... Best Practices for Fundraising, The CEO Hour, WSRadio.com, 3 interview segments http://tunein.com/program/?SegmentId=35465519&ProgramId=268692 ……………... Major Gift Strategies that Work http://www.slideshare.net/NonprofitWebinars/major-gift-strategies-that-work-7616568 ……………... Why When and How the Big Gift Campaigns Work http://www.slideshare.net/NonprofitWebinars/why-when-and-how-the-big-gift-campaigns-work-7285907 ……………... Advancement Best Practices that Work http://www.slideshare.net/NonprofitWebinars/advancement-best-practices
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© Executive Institutional Advancement Exchange LLC 2011 www.ExecIAE.com
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