Basics of Planned Giving: Insights from National Conference of Bar Foundations

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

2. WHAT IS PLANNED GIVING? WHAT IS PLANNED GIVING? The engendering of philanthropic gifts through estate planning. Estate is defined as a persons accumulated assets The engendering of philanthropic gifts through estate planning. Estate is defined as a persons accumulated assets $23.41 billion received in 2012 through PG - Giving USA 2013 $23.41 billion received in 2012 through PG - Giving USA 2013 Represents 7% of all giving Represents 7% of all giving Individual giving, including PG, is 79% of all giving or $252.2 billion of $316.23 billion given in 2012 Individual giving, including PG, is 79% of all giving or $252.2 billion of $316.23 billion given in 2012

3. WHY PLANNED GIVING 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 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 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- -vis cash flow giving PG is complementary to annual giving: Asset giving vis- -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 gapEducation Estimated 80% of Americans give to charity during lifetimes. Only about 8% give through estates. PG program helps begin to close the gapEducation Fewer than 50% of Americans have written estate plan Fewer than 50% of Americans have written estate plan

4. COMPONENTS OF A PG PROGRAM COMPONENTS OF A PG PROGRAM Communications: Casting a wide net Includes newsletters, website, other formal and informal communications Communications: Casting a wide net Includes newsletters, website, other formal and informal communications Major Gift Process: Identify, cultivate, develop strategies and solicit prospects 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. 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.

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

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

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

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

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

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

11. GIFT OF APPRECIATED PROPERTY GIFT OF APPRECIATED PROPERTY Must hold asset one year or more Must hold asset one year or more Can deduct up to 30% of donors adjusted gross income Can deduct up to 30% of donors adjusted gross income Eliminates capital gain tax Eliminates capital gain tax

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

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

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

15. PLANNED GIVING: WHY NOT? PLANNED GIVING: WHY NOT? An organization has long-time donors with histories of interest and support. 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? 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 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. PG would also be complementary to any capital campaign, if initiated by charity.

16. WHY NOT? - 2 WHY NOT? - 2 Emphasis on building endowment as an effective firewall sturdy enough to withstand any future financial fire. 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 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

17. THANK YOU THANK YOU We are pleased to help if you have questions and ideas We are pleased to help if you have questions and ideas Payson Wild Payson Wild Wild Associates, Inc. Wild Associates, Inc. www.wildassociatesinc.net www.wildassociatesinc.net paysonwild@comcast.net paysonwild@comcast.net James Provenza James Provenza jprovenza@provenzalaw.com jprovenza@provenzalaw.com