BASICS OF PLANNED GIVING NATIONAL CONFERENCE OF BAR FOUNDATIONS Payson S. Wild, Jr., CFRE President – Wild Associates, Inc. James Provenza, JD Provenza Law

WHAT IS PLANNED GIVING?  The engendering of philanthropic gifts through estate planning. Estate is defined as a person’s accumulated assets  $23.41 billion received in 2012 through PG - Giving USA 2013  Represents 7% of all giving  Individual giving, including PG, is 79% of all giving or $252.2 billion of $ billion given in 2012

WHY PLANNED GIVING  “Fire Prevention Program” - Builds “long-term” funds that complement year-to-year variations in government funding, annual giving and fees for service  “Painless giving” Encourages long-time donors to plan their estates and include Allendale without infringing upon personal cash flows  PG is complementary to annual giving: Asset giving vis- à-vis cash flow giving  Estimated 80% of Americans give to charity during lifetimes. Only about 8% give through estates. PG program helps begin to close the gap…Education  Fewer than 50% of Americans have written estate plan

COMPONENTS OF A PG PROGRAM  Communications: “Casting a wide net” Includes newsletters, website, other “formal” and “informal” communications  Major Gift Process: Identify, cultivate, develop strategies and solicit prospects  Stewardship: Honoring and recognizing PG donors through a heritage/legacy society. Regard stewardship as a means of cultivation of best PG prospects who are current PG donors.

BENEFITS TO DONORS  Making lasting gift to charity…”Gift in Perpetuity” has emotional appeal  Save taxes: Income, estate-both federal & state, capital gains  Either control gift assets for life or receive lifetime income from assets designated for Allendale

BEFORE PG IMPLEMENTATION…  Board approved policies & guidelines 1.Set ground rules for what personal assets your Foundation will accept and manage. What will be outsourced. 2.How will the Foundation rule on exceptions?  Case for PG support: Emotional & logical 1.To what long-term purposes will long-term gifts be applied? 2.Strategic planning  First year plan 1.Components 2.Measurable goals & objectives

GIFTS OF CASH  Made annually from person’s cash flow  Provides for immediate deduction of 50% of adjusted gross income  Multi-year pledge can be made in support of endowment

GIFT UNDER WILL OR TRUST  Made from individual's will or trust  Can be made as specific dollar amount or percentage of estate  Will reduce federal estate tax if estate exceeds the exemption

GIFT OF RETIREMENT PLAN  Name charity as beneficiary of IRA, etc.  No income tax payable on amount to charity  More income tax efficient than paying to individuals  Donor must change beneficiary designation

GIFT OF LIFE INSURANCE  Can transfer ownership or name charity as beneficiary  If transfer ownership, get deduction for cash surrender value.  Get additional deduction when pay premiums on policy

GIFT OF APPRECIATED PROPERTY  Must hold asset one year or more  Can deduct up to 30% of donor’s adjusted gross income  Eliminates capital gain tax

CHARITABLE REMAINDER TRUST  Unitrust-assets revalued annually  Annuity trust-valued once when assets transferred to trust  Pay income to one or two income beneficiaries  Income is 5% to 50% of value of assets  10% of value (at starting date) must go to charity

GIFT ANNUITY  Contract between charity and donor  Donor gets a guaranteed lifetime income  Donors like its simplicity

GIFT CONCEPTS - continued  Other gift plans, for example, include: 1.Remainder interest in personal residence 2.Real estate 3.Bargain sale: Sale to charity for less than market value 4.Tangible personal property 5.Donor Advised Funds  Each gift plan is individually tailored for each donor’s situation.

PLANNED GIVING: WHY NOT?  An organization has long-time donors with histories of interest and support.  Frankly, if death & taxes are inevitable, why not help donors to reduce the latter? …and why not charity?  PG is complementary to annual support. Often enhances interest with increased current support.  PG would also be complementary to any capital campaign, if initiated by charity.

WHY NOT? - 2  Emphasis on building endowment as an effective “firewall” sturdy enough to withstand any future “financial fire.”  Planned Giving needs to be consistent and initiated to continue ad infinitum. Your efforts this year will be appreciated by the future Boards and by the people served in the future by charity

THANK YOU  We are pleased to help if you have questions and ideas  Payson Wild Wild Associates, Inc.  James Provenza