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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

ALADN 2003 Conference

Michele Fletcher, Director of Library Development

June Steel, Director of Planned and Regional GiftsOffice of University Development

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

•$250 a year donor

•“Fill-in” appointment

•Highly appreciated stock with low income

•Interest in planned giving

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Why Planned Giving is Vital for your Library

• Aging population

• Trillions to be transferred

• Millions without wills

• Enormous potential

• Enormous competition

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Planned Giving – Value Added• Know your donors and prospects

• Know your collections

• Know about assets

• Know about methods

Outright Life Income Bequest

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Investment Cycle

Special

Ultimate

Annual Gift

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

“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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Planned Gifts • Current Gifts

– Stocks– Tangible Personal Property– Real Property

• Deferred Gifts– Bequests– Life Income Gifts

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

•Real Property

•Life Estate

•Bronze in newly renovated library

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Real Property

• Full or undivided fractional interest

• Environmental issues

• Marketability/Carrying costs

• Buyer in the wings

• Bargain sale

• Retained life estate

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Wills/Bequests

• Easy to do - often largest gifts• Types

– Specific– Residuary– Contingent– Testamentary trust

• Removes assets from estate

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

"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   

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Life Income Gifts

• Charitable Remainder Trusts– Unitrust– Annuity Trust

• Pooled Income Fund

• Charitable Gift Annuities– Current

– Deferred

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Charitable Remainder Trusts

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Charitable Remainder TrustsUnitrustUnitrust

VariableVariable income income

Assets valued Assets valued annuallyannually

Additional Additional gifts allowedgifts allowed

4 types4 typesStraightStraight

Net incomeNet incomeNet Income + Net Income +

makeupmakeupFLIPFLIP

Annuity TrustAnnuity Trust

FixedFixed income income

Assets valued Assets valued one timeone time

No additional No additional giftsgifts

1 type1 type

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Pooled Income Fund

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Charitable Gift Annuities

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Deferred Gift AnnuitiesBenefits:

• 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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

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.

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

Valentine’s Day Cookies

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

The Campaign for the UNIVERSITY of NORTH CAROLINA at CHAPEL HILL

www.lib.unc.edu

www.carolinafirst.unc.edu/giftplanning