Planned Giving: A Guide to Fundraising and Philanthropy (Wiley Nonprofit Law, Finance and Management Series)

Completely revised and updated, the Fourth Edition of this popular resource recognizes the emerging importance of planned giving and the changes that have taken place over the last few years. The new edition now includes a convenient, easy-to-use CD-ROM filled with exhibits, documents, and forms. With a new focus on user-friendly content and helpful insights, tips, warnings, and perspectives, the new edition empowers fundraising professionals with the ability to speak the same language as donors and their advisors, while still keeping their own organization's goals in mind. Note: CD-ROM/DVD and other supplementary materials are not included as part of eBook file. Planned Giving, Fourth Edition: A Guide to Fundraising and Philanthropy......Page 5 About the Authors......Page 7 Contents......Page 9 Preface......Page 29 Acknowledgments......Page 31 PART I: Planned Gifts......Page 35 1.1 Getting Started......Page 37 1.2 Introduction......Page 38 1.3 Planned Giving from the Donor’s Perspective......Page 39 1.5 Planned Giving from Management’s Perspective......Page 40 1.6 A Focus on the Future......Page 41 1.7 Cost Benefit Analysis......Page 42 1.9 Perspectives for Success: Leadership, Resources, and Staffing......Page 43 1.10 Planned Gifts Now and in the Future......Page 44 1.13 Planned Giving in a Development Office......Page 45 1.14 Conclusion......Page 47 2.2 Charitable Gift Annuities......Page 49 2.3 State Regulation of Gift Annuities......Page 54 2.4 Charitable Deferred Gift Annuities......Page 57 2.6 Administration......Page 60 3.1 Pooled Income Funds (PIFs)......Page 63 4.2 Parties to a Trust......Page 71 4.4 Trust Powers......Page 72 4.5 Revocable Inter Vivos Trust (Living Trust)......Page 73 4.6 Irrevocable Trusts......Page 75 4.7 Charitable Remainder Trusts......Page 76 Example 4.1......Page 81 Example 4.2......Page 83 4.8 Charitable Lead Trusts......Page 85 4.9 Tax Consequences......Page 87 5.2 Endowed Naming Opportunities......Page 89 5.3 Creating an Endowed Fund......Page 90 5.4 Umbrella Funds......Page 91 5.5 Scholarship Funds......Page 92 5.8 The Fund Description......Page 93 5.9 The Mechanics of a Fund Description......Page 96 5.10 Endowed Chairs......Page 97 5.12 Profile of a Donor Who Creates a Chair......Page 98 5.13 Cost to the Donor......Page 99 5.16 Types of Chairs......Page 100 5.19 The Internal Process......Page 101 5.20 Drafting the Terms of the Chair......Page 102 5.21 Recognition......Page 103 6.2 The Will......Page 105 6.3 Suggested Language......Page 106 6.4 Standard Bequest Forms......Page 108 6.6 Targeting Donors for Bequests......Page 109 6.7 Marketing Bequests......Page 110 6.8 Crediting Bequests......Page 111 6.9 Recognition Events......Page 112 6.10 Administering a Nonprofit Bequest Program......Page 115 6.11 Guide to the Probate Process......Page 116 6.12 The Planned Giving Office and Bequest Administration......Page 119 6.13 Typical Problems Encountered with Bequests......Page 125 6.14 Distribution within the Charity......Page 129 6.15 Facilitating Bequest Administration: Working with Donors Today......Page 130 6.16 Conclusion......Page 131 PART II: Assets Involved with Planned Giving......Page 135 7.1 Introduction......Page 137 7.2 Securities Held by the Donor’s Stockbroker or Banker......Page 138 7.4 The Value of the Gift......Page 139 7.5 The Date of the Gift......Page 140 7.6 The Donor’s Charitable Income Tax Deduction......Page 141 7.7 Gifts of Shares of a Mutual Fund......Page 142 7.8 Closely Held Stock......Page 144 8.1 Introduction......Page 147 8.2 Elements Affecting Gifts of Real Estate......Page 148 8.3 Factors Affecting Value and Marketability of Real Estate......Page 149 8.4 Tax Consequences of Gifts of Real Estate......Page 151 8.5 Working Out the Arrangements......Page 152 8.7 Denial of Charitable Income Tax Deduction for a Gift of a Use of Property......Page 153 8.8 Gifts of Real Estate with a Retained Life Estate......Page 154 Example 8.1......Page 155 Example 8.3......Page 157 8.9 Gifts of Real Estate to Charitable Remainder Trusts......Page 158 8.10 Gifts of Real Estate to Fund Charitable Gift Annuities......Page 159 Example 8.5......Page 160 8.12 Gifts of Mortgaged Property......Page 161 8.13 Gifts of Conservation Easements......Page 163 8.16 Qualified Donee Organizations......Page 165 8.17 Conservation Purposes......Page 166 8.18 Qualified Real Property Interests......Page 167 8.19 Tax Consequences......Page 168 8.20 Valuation......Page 169 8.21 Conclusion......Page 171 9.2 Overview......Page 173 9.3 Gifts of Tangible Personal Property to Planned Giving Vehicles......Page 177 9.4 Substantiation Requirements......Page 178 9.6 The Gift Review Committee......Page 179 9.7 Gifts of Major Collections......Page 181 9.8 Identifying Prospects......Page 182 9.9 Donor Concerns......Page 183 9.10 Nonprofit Issues......Page 184 9.12 Deaccessioning......Page 185 9.14 Unacceptable Collections......Page 186 9.15 The Curation Agreement......Page 187 9.18 Conclusion......Page 190 10.2 Definitions......Page 191 10.3 Life Insurance Agents and Planned Giving......Page 192 10.4 Ways to Use Life Insurance to Promote Major Gifts......Page 193 10.6 Short-Term Endowment Policies......Page 194 10.8 Insurance Used in Asset Replacement Trusts......Page 195 10.9 Funding a Charitable Remainder Net Income Unitrust/Flip Trust with Life Insurance......Page 196 10.10 Guidelines for the Planned Giving Officer......Page 197 10.11 Conclusion......Page 198 11.2 Gifts of Retirement Plan Assets: IRA Charitable Rollovers Extended......Page 199 11.3 Tax Consequences of Charitable Gifts of Retirement Accounts at Death......Page 200 11.5 Ways to Transfer Retirement Assets to a Nonprofit......Page 201 11.6 Summary......Page 203 PART III: Planned Giving’s Financial Impact......Page 205 12.1 Introduction......Page 207 12.2 Income Taxes......Page 208 12.5 Deductibility of Gifts of Tangible Personal Property......Page 210 12.7 Deduction Reduction Provision......Page 213 12.10 The Ordinary Income Reduction Rule......Page 214 12.11 Income in Respect of a Decedent......Page 215 12.12 Deductibility of Charitable Contributions for Business Organizations......Page 216 12.14 Capital Gains Taxes......Page 217 12.15 Federal Estate and Gift Taxes......Page 218 12.18 Gifts by Husband and Wife—the Unlimited Marital Deduction......Page 219 12.19 Streams of Income and Gift Tax Consequences......Page 220 12.22 Tax Implications of a Bargain Sale......Page 221 12.23 Partial Interests......Page 222 12.24 Conclusion......Page 223 13.2 Related Disciplines......Page 225 13.4 The Will: A Road Map......Page 227 13.5 Parts of a Will......Page 229 13.6 Coordinating Title to Property with the Estate Plan......Page 231 13.8 Probate......Page 232 13.9 Power of Attorney and Durable Power of Attorney......Page 234 13.11 Talking with a Prospect about Estate Planning and Wealth......Page 235 13.12 Conclusion......Page 236 14.1 Introduction......Page 237 14.2 Achieving Financial Objectives through Charitable Giving......Page 238 14.3 Risk-and-Reward Theory......Page 239 14.4 Evaluation of Investment Alternatives......Page 241 14.5 Cash Investments......Page 242 14.6 Stocks......Page 243 14.7 Income Investments......Page 245 14.8 Mutual Funds......Page 246 14.9 Real Estate......Page 247 14.10 Portfolio Management and Planning......Page 248 14.11 Conclusion......Page 250 PART IV: Planned Giving Programs on Location......Page 251 15.1 Introduction......Page 253 15.2 Faith-Based and Religious Organizations......Page 254 15.3 Hospitals and Healthcare Organizations......Page 255 15.4 Educational Institutions......Page 256 15.5 Political Fundraising......Page 257 15.6 Community and Civic Organizations......Page 258 15.7 Arts and Cultural Organizations/Aquariums and Zoos......Page 259 15.9 Social Service/Humanitarian Organizations......Page 260 15.10 Conclusion......Page 261 16.1 Introduction......Page 263 16.2 Education......Page 264 16.4 Legal Issues......Page 265 16.6 Management Plan......Page 266 16.8 Marketing......Page 267 16.10 Stewardship......Page 270 16.12 Software......Page 271 16.14 Conclusion......Page 272 17.1 Introduction......Page 273 17.2 Types of Educational Institutions......Page 274 17.3 Centralized and Decentralized Programs......Page 275 17.5 The Planned Giving Officer: Fundraiser or Consultant?......Page 276 17.6 Preventing Conflicts: Working with Development Staff......Page 277 17.7 Developing Internal Relationships......Page 278 17.8 Constituents......Page 279 17.9 Managing Constituents......Page 280 17.10 Planned Giving Program Activities......Page 281 17.11 Gift Opportunities......Page 282 17.12 Conclusion......Page 283 18.2 The Hospital Environment......Page 285 18.3 The Players......Page 288 18.4 The Patients......Page 290 18.5 Staffing the Development Office......Page 294 18.6 Priorities and Expectations......Page 295 18.7 Grateful Patients......Page 297 18.10 Soliciting Patients Who Are Donors......Page 299 18.11 Working with the Donor’s Physician......Page 300 18.12 From the Donor’s Perspective......Page 302 18.13 Working with a Patient’s Outside Advisor to Complete the Gift......Page 303 18.15 Patients with Terminal Illnesses, Including AIDS......Page 304 18.17 Conclusion......Page 306 19.2 Donor Profile......Page 309 19.3 Relationship Building......Page 311 19.7 Use of Planned Giving Vehicles......Page 314 19.8 Marketing......Page 315 19.10 Special Challenges Unique to Arts Organizations......Page 316 19.11 Conclusion......Page 318 PART V: Managing Donors and Prospects......Page 319 20.2 Motivations......Page 321 20.3 Profile of a Planned Giving Prospect......Page 325 20.4 Finding the Planned Giving Prospect......Page 326 20.5 Working with the Planned Giving Prospect......Page 328 20.6 Conclusion......Page 330 21.1 Introduction......Page 331 21.2 Fundraising from the Nonprofit’s Perspective: Development, Advancement, or Philanthropy?......Page 332 21.3 Changing the Focus to Philanthropy......Page 333 21.5 Getting Started......Page 334 21.6 Strategies to Promote Philanthropy......Page 335 21.7 Opportunities for All Types of Charities......Page 338 21.8 Conclusion......Page 340 22.2 A Planned Giving Office as a Service Center......Page 341 22.3 Management......Page 342 22.4 Educating Donors......Page 344 23.2 Gender-Based Differences in Giving......Page 349 23.4 Financial Challenges for Women......Page 350 23.5 Types of Donors......Page 351 23.6 Motivations for Giving......Page 352 23.7 Gift Planning Implications......Page 353 23.8 Types of Planned Gifts to Consider for the Female Donor......Page 355 23.11 Conclusion......Page 356 24.1 Introduction......Page 357 24.3 Before Meeting with the Donor......Page 358 24.4 Families in Sync/Harmony......Page 359 24.5 Families Out of Sync/Harmony......Page 360 24.6 Donors without Children......Page 362 24.8 Tools for Continuing and Maintaining Family Philanthropy......Page 363 24.9 Gift Options for Family Philanthropy......Page 364 24.10 Conclusion......Page 365 25.2 The Planned Giving Officer’s Mindset......Page 367 25.3 Preparation......Page 368 25.4 The Planned Giving Participants......Page 371 25.5 The Donor......Page 372 25.6 Types of Solicitations......Page 373 25.7 The Solicitation Process......Page 376 25.8 The Size of the Gift......Page 380 25.9 Negotiations......Page 381 25.10 Follow-up......Page 383 26.1 Introduction......Page 385 26.2 Types of Problematic Gift Situations......Page 386 26.3 Warning Signs......Page 389 26.5 Knowing When to Walk Away......Page 390 26.6 Keeping the Door Open......Page 391 26.7 Conclusion......Page 392 27.1 Introduction......Page 393 27.2 Working a Room......Page 394 27.4 Telephone Etiquette......Page 395 27.5 E-Mail Etiquette......Page 396 27.7 The Difficult Donor......Page 397 27.8 Donor Visits......Page 398 27.9 Restaurant Protocol......Page 399 27.10 Overnight Stays at Donor’s Home......Page 400 27.12 Visiting a Donor in the Hospital......Page 401 27.15 In Summary......Page 402 27.16 Conclusion......Page 403 28.1 Introduction......Page 405 28.4 Preparation......Page 406 28.5 Capacity......Page 407 28.6 Qualifying Prospects......Page 408 28.9 Working the Gift Through the Nonprofit Organization......Page 409 28.10 Dealing with the Donor......Page 411 28.12 Dealing with a Donor’s Advisors and Family......Page 413 28.14 Terms of the Gift......Page 415 28.15 Conclusion......Page 416 29.1 Introduction......Page 417 29.2 What Is Donor’s Remorse?......Page 418 29.3 Causes of Donor’s Remorse......Page 419 29.4 Preventing Donor’s Remorse......Page 421 29.5 The Charity’s Response......Page 424 29.7 Conclusion......Page 425 30.1 Introduction......Page 427 30.3 Donor Disconnects......Page 428 30.4 Fixing the Problem......Page 429 30.5 Treating the Symptoms......Page 431 30.6 Make the Charity Stand Out/Distinguish the Charity from Others......Page 432 30.7 The Role of Planned Giving......Page 433 30.8 Conclusion......Page 434 PART VI: MANAGING A PLANNED GIVING PROGRAM......Page 437 31.2 Annual Giving......Page 439 31.4 Foundations and Corporations......Page 443 31.6 Prospect Management......Page 444 31.10 Communications and Public Affairs......Page 445 31.12 Conclusion......Page 446 32.2 Perspective......Page 447 32.5 Donor Contact......Page 448 32.7 Establish a Strong Marketing Communications Effort to Promote Planned Gifts......Page 449 32.8 Raise the Visibility of the Planned Giving Program Internally and Externally......Page 451 32.10 Inventory Existing Planned Giving Totals......Page 452 32.12 Planned Giving Budget......Page 453 32.13 Conclusion......Page 456 33.2 Types of Roles for the Planned Giving Officer......Page 457 33.3 Attributes of a Successful Planned Giving Officer......Page 458 33.4 Top-10 List for Closing Large Planned Gifts: How to Work with Planned Giving Donors......Page 459 33.5 Conclusion......Page 462 34.1 Introduction......Page 463 34.2 Definition......Page 464 34.3 Planned Giving and Major Gift Profiles......Page 466 34.4 Identifying Major Gift and Planned Giving Prospects......Page 471 34.5 Mobilizing the Nonprofit Organization to Produce Planned and Major Gifts......Page 472 35.2 The Changing Marketplace......Page 479 35.3 Attributes of Successful Planned Giving Professionals......Page 482 35.4 The Process of Hiring a Planned Giving Officer......Page 485 35.5 The Planned Giving Assistant......Page 488 36.2 New Skills, Abilities, and Thought Processes......Page 491 36.4 Advance Preparation......Page 492 36.5 Transferable Skills: Motivation, Team Building, and Stewardship......Page 493 36.7 Establish Mutual Expectations with the Consultant......Page 495 36.8 Conclusion......Page 496 37.2 Getting Organized......Page 497 37.3 Control the Office Environment......Page 499 37.4 Meetings......Page 501 37.6 Working at Home......Page 502 37.8 General Tips for Saving Time......Page 504 37.9 Conclusion......Page 505 38.1 Introduction......Page 507 38.2 Characteristics of Successful Leaders and Managers......Page 508 38.3 Leadership in a Development Office......Page 509 38.4 Leadership Rules to Live By......Page 510 38.5 Tools to Help Manage......Page 513 38.6 Educational Methods for Becoming a Better Manager......Page 515 38.7 Conclusion......Page 516 PART VII: MANAGING OUTSIDE THE OFFICE......Page 517 39.2 Vice President for Development......Page 519 39.3 President or Chief Executive Officer of the Organization......Page 520 39.4 Role of the Board of Trustees......Page 522 39.6 Volunteers......Page 524 39.7 Volunteer Fundraisers: Doctors and Deans......Page 525 39.8 Supporting Offices within the Organization......Page 526 39.9 Planned Giving Training Program......Page 528 39.10 Conclusion......Page 529 40.1 Introduction......Page 531 40.2 Rationale for Creation of a President’s Society......Page 532 40.3 Defining the President’s Society......Page 533 40.4 Benefits of Creating a Volunteer Society......Page 534 40.5 Goals......Page 535 40.6 Modeling the Organization......Page 536 40.7 The Chairperson......Page 537 40.9 The Recruitment Process......Page 539 40.10 Subcommittees......Page 540 40.11 Creating a President’s Society Fund......Page 541 40.12 Role of the Chief Development Officer......Page 542 40.14 Challenges......Page 543 40.15 Conclusion......Page 545 41.2 Putting Development into Context for Nondevelopment Staff......Page 547 41.3 Collaborative Efforts......Page 548 41.4 Development Communications......Page 549 41.6 Identification of Development Constituents......Page 550 41.7 Cultivation of Constituents......Page 553 41.8 The Solicitation......Page 556 41.9 Raising Funds from Individuals......Page 557 41.12 Dealing with the Downside......Page 560 41.13 Conclusion......Page 561 PART VIII: Evaluating Performance......Page 563 42.1 Introduction......Page 565 42.3 Take Inventory......Page 566 42.4 Establishing Programmatic Goals......Page 567 42.5 Identifying Planned Giving Donors and Prospects......Page 568 42.7 Evaluation of Staff Functions......Page 569 42.8 Marketing......Page 570 42.9 Staffing......Page 575 42.11 Budget/Education......Page 576 42.14 Outside Support......Page 577 43.1 Introduction......Page 581 43.2 Reaching Goals and Objectives......Page 583 43.3 Moves Management......Page 584 43.5 Additional Ways to Reach Goals and Objectives Exclusively for Planned Giving Officers......Page 586 43.6 Team Consideration......Page 587 43.7 Frequency of Accountability and Tracking Prospects......Page 588 PART IX: Marketing......Page 589 44.1 Introduction......Page 591 44.2 Types of Documents......Page 592 44.4 Know the Audience and Be Responsive to It......Page 593 44.5 Use Outlining......Page 594 44.6 Develop a First Draft......Page 595 44.7 Bring Others into the Process......Page 596 44.8 Manage Documents to Meet Deadlines......Page 597 44.9 Design an Effective Document......Page 598 44.10 Take Advantage of Desktop Publishing......Page 599 44.11 Use Language Correctly and Effectively......Page 600 44.12 Recipe for a Document......Page 603 44.13 Conclusion......Page 604 45.1 Introduction......Page 605 45.3 The Case Statement......Page 606 45.4 Guide to Charitable Gift Planning......Page 607 45.5 Response Form......Page 608 45.7 Columns in Nonprofit Publications......Page 609 45.9 Buckslips......Page 610 45.10 Testimonial Advertisements......Page 611 45.11 Letters......Page 612 45.13 Conclusion......Page 613 46.1 Introduction......Page 615 46.3 Noneconomic Benefits......Page 616 46.5 Enrichment Brochure......Page 619 46.6 Enrichment Programs......Page 620 46.8 Disseminating Enrichment Brochures......Page 622 46.9 Conclusion......Page 626 47.1 Presentations......Page 627 48.2 Ways to Begin......Page 635 48.4 Mailings to Professional Advisors......Page 637 48.7 Nontechnical Outreach Program......Page 638 48.9 Planned Giving Manual......Page 639 48.11 Establishing a Professional Advisory Committee......Page 640 48.12 Purpose of the Committee......Page 642 48.14 Conclusion......Page 644 PART X: Policies and Procedures......Page 647 49.1 Introduction......Page 649 49.3 Securities......Page 651 49.4 Life Income Gifts......Page 653 49.5 Bequests......Page 658 49.6 Gifts of Tangible Personal Property......Page 659 49.7 Gifts of Real Estate......Page 660 49.10 Administrative Issues......Page 662 49.11 Ethics......Page 668 50.2 Symptoms of Disinterest......Page 669 50.3 Incident Report......Page 670 50.4 Acknowledgments......Page 671 50.6 Inclusion in Charity Events......Page 672 50.8 Gift Agreements......Page 674 50.10 Stewardship......Page 675 50.12 Conclusion......Page 676 51.2 Polices and Procedures......Page 679 51.4 Pricing Naming Opportunities......Page 680 51.5 Background Check......Page 681 51.6 Conclusion......Page 685 52.1 Introduction: Nonprofit Investment in Context for Planned Giving Officers......Page 687 52.2 Nonprofit Investment Issues......Page 689 52.3 Endowment Management......Page 692 52.4 Investment Strategies......Page 696 52.5 Portfolios for Planned Giving Options......Page 703 52.6 Donor Relations......Page 709 52.7 Investment Guidelines......Page 714 52.8 Conclusion......Page 715 53.1 Introduction......Page 717 53.3 Pegging the Minimum Based on a Good or Service/Formulaic Approaches......Page 719 53.4 Setting Realistic Minimums......Page 720 53.5 Escalator Provisions......Page 722 53.7 Political Fallout—Impact on Prior Gift Agreements and Prior Relationships......Page 723 53.8 Conclusion......Page 724 PART XI: Planned Giving in Context......Page 727 54.2 Donor Rights and Nonprofit Responsibilities......Page 729 54.4 Donor Rights......Page 730 54.5 Nonprofit Responsibilities......Page 734 54.6 Donor’s Representatives......Page 736 54.7 Payment of Professional Advisors’ and Lawyers’ Fees......Page 737 54.9 Fiduciary Role of the Nonprofit......Page 738 54.11 Planned Giving Officer as Salesperson......Page 739 54.13 Model Standards of Practice for the Charitable Gift Planner......Page 740 54.14 Conclusion......Page 742 55.1 Introduction......Page 743 55.2 Campaign Counsel......Page 744 55.3 Advantages of Entering a Major Campaign......Page 745 55.4 Disadvantages of Entering a Campaign......Page 749 55.5 Types of Capital Campaigns......Page 750 55.6 The Nucleus Fund......Page 752 55.7 Types of Campaign Gifts......Page 753 55.8 Planned Giving Training......Page 754 55.11 Conclusion......Page 755 56.1 Introduction......Page 757 56.3 Gift Acknowledgment......Page 758 56.4 Gift Administration......Page 760 56.5 Donor Recognition......Page 763 56.6 Continued Cultivation and Solicitation for Additional Gifts......Page 766 56.7 Endowed Funds......Page 767 56.8 Conclusion......Page 768 57.2 Benefits of Institutionally Related Foundations......Page 769 57.3 Considerations in Establishing a Foundation......Page 770 57.4 The Charity and the Foundation......Page 771 57.5 The Foundation’s Organizational Framework......Page 772 57.6 Committees and Their Functions......Page 774 57.7 Fundraising......Page 777 57.8 Managing and Investing Assets......Page 778 57.9 Conclusion......Page 780 58.2 When to Hire an Outside Asset Manager......Page 781 58.4 Selecting the Asset Manager......Page 782 58.5 From the Asset Manager: What the Planned Giving Program Wants and Needs......Page 784 58.6 Responsibilities of the Outside Asset Manager......Page 785 58.7 Conversion from In-House to Outside Manager......Page 786 58.8 The Nonprofit and Outside Manager Relationship......Page 787 58.9 Recurring Issues......Page 788 58.11 Conclusion......Page 790 59.1 Introduction......Page 791 59.2 Impact on the Charity......Page 792 59.4 Impact on the Donor Base......Page 793 59.7 Increasing the Management Fee on Endowed Funds......Page 794 59.10 Restricted Gifts, Planned Gifts, and Life Income Gifts......Page 795 59.12 Implications on Planned Gift Options......Page 796 59.15 Making the Case......Page 797 59.16 Conclusion......Page 798 Using the Files......Page 799 SUMMARY CD-ROM CONTENTS......Page 800 Index......Page 803