ALADN 2003 Conference Michele Fletcher, Director of Library Development June Steel, Director of Planned and Regional Gifts Office of University Development

Why Planned Giving works for Libraries Type of donor is “millionaire next door” Pattern of small gifts Donors typically self identify Donors typically offer clues Larger payoff

“To the rich, the very rich, and the super rich! Have I left anybody out?”

$250 a year donor “Fill-in” appointment Highly appreciated stock with low income Interest in planned giving

Why Planned Giving is Vital for your Library Aging population Trillions to be transferred Millions without wills Enormous potential Enormous competition

Planned Giving – Value Added Know your donors and prospects Know your collections Know about assets Know about methods OutrightLife IncomeBequest

Investment Cycle Special Ultimate Annual Gift

“Would everyone check to see they have an attorney? I seem to have ended up with two.” copyright The New Yorker Collection from cartoonbank.com

Planned Gifts Current Gifts –Stocks –Tangible Personal Property –Real Property Deferred Gifts –Bequests –Life Income Gifts

Tangible Personal Property Charitable deduction for FMV Related use Avoids capital gain tax Self-created works IRS Form 8283 –Gifts over $500 –Gifts over $5,000 IRS Form 8282

Real Property Life Estate Bronze in newly renovated library

Real Property Full or undivided fractional interest Environmental issues Marketability/Carrying costs Buyer in the wings Bargain sale Retained life estate

“After 18 years of cultivating Patrick Daniels, III, may I present his planned gift to us: Twinkles.”

Wills/Bequests Easy to do - often largest gifts Types – Specific – Residuary – Contingent – Testamentary trust Removes assets from estate

"To whom much is given, of him much is expected. I have been given much: an inquiring mind, a sense of ethics, a lifelong search for religion and truth (defined as knowledge in agreement with reality), good health, more than my share of earth's physical treasures, a reasonable balance in seeing relationships, and finally the blessing of a nagging inner voice to preach, even demand, in strident tones and at the most inopportune times, duty, that draconian self-law which binds one to his principles." -excerpt from Jack Lynch's will

Life Income Gifts Charitable Remainder Trusts –Unitrust –Annuity Trust Pooled Income Fund Charitable Gift Annuities – Current – Deferred

Charitable Remainder Trusts

Benefits: Immediate income tax deduction Avoids capital gain tax on transfer Income for life or term of years Removes assets from estate Several different types

Charitable Remainder Trusts Unitrust Variable income Assets valued annually Additional gifts allowed 4 types Straight Net income Net Income + makeup FLIP Annuity Trust Fixed income Assets valued one time No additional gifts 1 type

Pooled Income Fund

Agreement between donor and University Additional gifts can be made - units revalued Variable income Managed by University UNC-Chapel Hill policy: –cash or securities -- no municipals or real property –one or two income beneficiaries, minimum age 50 –minimum initial contribution -- $5,000

Charitable Gift Annuities

Current Gift Annuities Benefits: Immediate income tax deduction Preferential capital gain treatment Attractive rates of return Fixed income Removes assets from estate State regulations vary

Deferred Gift Annuities Benefits: Same benefits of current gift annuity plus… Payments start when contract stipulates Higher payout and deduction since payments deferred – based on original gift amount Used for retirement income

Retirement Plan Assets Currently – Lifetime giving has income tax consequences for the donor – Asset best given to library at death Future? –Care Act of 2003

Gifts of Life Insurance Donate a paid up policy Donate a partially paid up policy and continue to pay premiums Use insurance to replace asset given to your library For gift credit the charity must be both the owner and beneficiary of the policy.

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