Best Practices to Advance Planned Giving

Sponsored by: A Service Of:

Best Practices to Advance Planned Giving

Rod Miller

July 25, 2012


Advising nonprofits in: •  Strategy •  Planning •  Organizational Development

www.synthesispartnership.com

(617) 969-1881 [email protected]

INTEGRATED PLANNING



Today’s Speaker

Rod Miller Founder

Executive Institutional Advancement Exchange

Hosting: Sam Frank, Synthesis

Partnership

Assisting with chat questions: Jamie Maloney, Nonprofit Webinars

Best Practices to Advance Planned Giving Rod Miller, Founder

Executive Institutional Advancement Exchange

www.ExecIAE.com

http://www.execiae.com/


What is a Planned Gift?

1. Made during an individual’s life

2. Benefits nonprofit (NPO) in future

3. After death of the individual and/or beneficiary

2 © Executive Institutional Advancement Exchange LLC 2012

www.ExecIAE.com


Advancement Best Practices on LinkedIn

Why, when and how to plan and execute best practices for institutional advancement - share insights, ideas and creative

ways to transform advancement efforts.

For board trustees, CEOs and leaders with vision and commitment to best practices for growing revenue,

philanthropy and marketing impact.

http://www.linkedin.com/groups?gid=3874810


www.ExecIAE.com

http://www.linkedin.com/groups?gid=3874810


What are Best Practices?

A best practice is a method, process, activity, incentive,

or reward that is believed to be more effective at

delivering a particular outcome than any other

technique, method, process, etc. when applied to a

particular condition or circumstance…

... en.wikipedia.org/wiki/Best practices


www.ExecIAE.com


Advancement Best Practice Steps

1. Assess values, case, needs, goals and resources.

2. Review advancement strategy, process and behavior on-site.

3. Benchmark internally.

4. Engage new, key stakeholders.

5. Select and empower right leaders.

6. Sign-onto ROI performance: outputs, process and behaviors.

7. Establish pertinent, high-speed follow-through.

8. Reference benchmarks of world’s best practice.

9. Review trajectory and reward improvement.

10. Reassess stakeholder engagement.


www.ExecIAE.com


Best Practices to Propel Giving

1. Discover new key stakeholders.

2. Recruit right leaders (volunteer and staff).

3. Empower communications (pertinent and quick).

4. Grow the annual fund and mega-gifts (including

planned gifts).

5. Assure follow through (3600 collaboration).


www.ExecIAE.com


Common Planned Gifts

• Outright gift in future (even to annual fund)

– Stocks/bonds

– Real estate, antique or other property

– Retirement fund

• Trust instrument or bequest in Will

– Irrevocable

– Revocable

• Annuity or variable asset

• Life insurance


www.ExecIAE.com


Bequest in Will

• Make and review

– Seek % of estate

– Restricted/unrestricted

– Beware narrow terms of application

• Change with Codicil

– Have wording readily available

(obtain legal advice)


www.ExecIAE.com


Planned Giving Priorities

• Plan energetic engagement.

• Understand planned gift principles.

• Respect individual’s family/financial needs.

• Avoid specific advice or influence.

• Communicate creatively and frequently.


www.ExecIAE.com


1. Discover Planned Gift Potential

“Easiest gift to make…”

• Engage planned gifts task force at board-level

• Gather information from members of institution

• Mine institution’s database

• Showcase benefits from planned gifts

• Frequent news items/newsletters/updates

• Information seminars on planned giving

• Inform financial/legal professionals


www.ExecIAE.com


NPO Stakeholders

Board

•Network

Previously Involved

• Board

• Staff etc

• Clients

• Contacts

• Professions

Community Affiliates

• On/Near Site

• Any who value services

NPO Family

• Management

• Staff

• Clients

• Patients

• Students

• Parents


www.ExecIAE.com


Why Emphasize Planned Giving

Estimated 50% to 66% people die without a Will

USA (66% of African-American/75% of Hispanic populations)

Canada, Australia, Great Britain…

Rapidly growing assets of ageing baby boomers


www.ExecIAE.com


www.ExecIAE.com 13


2. Recruit Right Leaders – Task Force

Purpose: identify and help engage new potential donors

– understood limited term > “thanks” > new blood

Good leadership – succession, mix board trustees and peers

– Diversity of background, sex, occupation, geography, etc (“right” people)

Action meetings/agenda/minutes

– Strong staff support

– Invited, informed, involved and thanked

– Interesting meetings (pre-planning with chair, solicitation materials)


www.ExecIAE.com


Build Relationship for Change

Discover who cares

Engage

CEO

Share interests & values

Listen

Suggest options

Partner for

remedy


www.ExecIAE.com


Empower Planned Giving Officer

• Make/coordinate minimum 5 visits per week, in year-1

• By year-3, some closures on planned gift instruments

• Within 5-7 years, planned gifts may provide income

• Some estimate planned gifts at 10 times what’s notified


www.ExecIAE.com


Align Expectations and Efforts

• 100-day plan to execution

• Personal engagement

(board trustees, CEO, advancement)

• Initial 5 to 7 year commitment

© Executive Institutional Advancement Exchange LLC 2012

www.ExecIAE.com 17


3. Empower Communication

“Good advice for gift planners: stop talking about tax savings and the technical aspects of gifts.

Instead, combine the emotional appeal of your mission with the impact the donor’s gift can make, and you will have a winning formula.”

- Phyllis Freedman, “Planned Giving Blogger”

July 20, 2010

18 www.ExecIAE.com


Focus Future

www.ExecIAE.com 19


Focus Future

www.ExecIAE.com 20


Focus Future

www.ExecIAE.com

21


Focus Future

www.ExecIAE.com

22


Value of Planned Gift to Donors

• Opportunity to make a larger gift.

• Avoid capital-gains tax.

• Retain individual income.

• Convert a highly appreciated asset.

• Set value of assets for tax purposes.

• Cut taxes on transfer of owned business.

• Pass assets to heirs and/or NPO.


www.ExecIAE.com


Types of Givers

• Impulsive

• Habitual

• Careful

• Thoughtful


www.ExecIAE.com 24


Most Effective Communication

Personal visits by

1. board-level peer

2. CEO

3. advancement professional

Additional visits by board member/CEO/professional

Each followed by a personal

1. letter (with visit/telephone follow-up)

2. phone call, with brief follow-up letter


www.ExecIAE.com


Integrate Marketing Support

1. Brochure/web – How to make planned gift to NPO

2. Word-of-mouth, viral – Launch and repetition: “NPO accepts planned gifts/how”

3. NPO web/publications/mailings – Advertise: “Photo + 50-150 word stories on who benefits”

4. Community affiliates/community news – For information: “Photo + 250 word story on who benefits”

5. Estate, wealth management sessions – Specialist information offered by NPO

6. NPO planned giving newsletter

7. Media-worthy stories


www.ExecIAE.com


Overview Planned Gift Vehicles*

Planned Gift

Elements

Charitable

Gift

Annuity

Deferred Charitable

Gift Annuity

Charitable Remainder

Trust

Grantor Lead Annuity

Trust

Retained Life Estate

Income Beneficiary

No more than 2 individuals

No more than 2 individuals

One or more individuals

NPO None

Holds Remainder NPO NPO NPO Donor NPO

Rate of Return Funct. Age/# beneficiaries

Funct. Age/# beneficiaries

Min. of 5% market value

Variable Not Applicable

Payments to Beneficiary

Fixed amount Fixed, deferred payment

Fixed percentage

Fixed amount None

Term Life income Life income Life inc. ben… Life/spec. term Life of spouses

Federal Taxation Portion Portion Inc. tax-free… May be... Appraise value

State/City Tax Varies Varies Varies Varies Varies

Rec. Min. Gift $10,000 $10,000 $100,000 Open Personal Res…

Accepted Assets Cash/stock Cash/stock Cash/stock… Cash/other… Real Estate

Rec. Min. Age of Beneficiary

65 35 60 No minimum To set

27 • For Example Only: obtain advice from qualified

lawyers on all details

Comparison of Options

Computer simulations available

to project examples, based on

variables of age, asset base,

percentage returns (where applicable)…etc.


www.ExecIAE.com


Inform Legal/Finance Professionals

Keep interaction based on “information-only”

• Lunch/breakfast briefing about NPO (on-site)

– Tour examples of how bring benefit

– NPO planned giving materials

Presented by CEO

• Visits/mailings: NPO planned giving materials


www.ExecIAE.com


Estate/Tax Planning Update

• Seminar on ways to

– Reduce taxes on income, capital gains and estates

– Use a trust to control assets and pass assets to heirs

– Plan a financially secure retirement

– Bypass capital gains taxes on stocks, real estate etc.

– Plan gift arrangements to maximize your estate and family inheritance

Presented by qualified (institutional) lawyer… free

… no solicitation


www.ExecIAE.com


4. Grow Mega-planned Gifts

Older people

Assets

% of estate


www.ExecIAE.com


Family Wealth Management

• (Live-in) Workshop(s) on ways to

– Sustain philanthropic intent of parents/grandparents

– Use various trusts to save income, gift and estate taxes

– Provide for children’s or grandchildren’s education/future

– Obtain valuable tax and other financial benefits from gifts

– Plan for IRA distributions and beneficiary arrangements

– Establish or maintain family foundation

Conducted by NPOs professionals, with qualified (institutional) lawyers/financial planners… free

… no solicitation


www.ExecIAE.com


5. Ensure Follow-through

One well-briefed

NPO point-of-contact

for

Planned Giving inquiries


www.ExecIAE.com


100-day Plan to Execution

1. Expect R.O.I.

2. Planned gift task force

3. Gift acceptance policy

4. Agree team actions

5. Identify high potential

6. Schedule visits

7. Follow-through benchmarked

to best practice

…Secure initial results


www.ExecIAE.com 34


Measure R.O.I. Benchmarks

1. Strategy

How well matched: stakeholder

values/mission

2. Operations

What pace: discovery, engagement, asking

3. Behavior

What priority: on big opportunities Goal Build capacity of each Planned Giving Officer

© Executive Institutional Advancement Exchange LLC 2012 www.ExecIAE.com

35


Suggested Resources

Gerard M. Condon, Esq and Jeffrey L. Condon, Esq, Beyond the Grave: the right way and the wrong way of leaving money to your children (and others), New York, Harper, 2001 Rod Miller, “Beyond Benchmarking Institutional Advancement” in Excellence in Communicating Organizational Strategy, Albany, NY: State University of New York Press, 2001 (sample@ GOOGLE)

……………... Best Practices for Fundraising, The CEO Hour, WSRadio.com, 3 interview segments http://tunein.com/program/?SegmentId=35465519&ProgramId=268692 ……………... Major Gift Strategies that Work http://www.slideshare.net/NonprofitWebinars/major-gift-strategies-that-work-7616568 ……………... Why When and How the Big Gift Campaigns Work http://www.slideshare.net/NonprofitWebinars/why-when-and-how-the-big-gift-campaigns-work-7285907 ……………... Advancement Best Practices that Work http://www.slideshare.net/NonprofitWebinars/advancement-best-practices

36

© Executive Institutional Advancement Exchange LLC 2012 www.ExecIAE.com

http://books.google.com/books?id=oQQoVwJRF1EC&pg=PA139&lpg=PA139&dq=rod+miller+fund+raising&source=bl&ots=YOKHAykdO3&sig=-AOfIWVRZCSqUVyPSoBniG7kl5Q&hl=en&ei=gJogTPfnJMG88gam_JGTAQ&sa=X&oi=book_result&ct=result&resnum=8&ved=0CDYQ6AEwBw

http://tunein.com/program/?SegmentId=35465519&ProgramId=268692

http://www.slideshare.net/NonprofitWebinars/major-gift-strategies-that-work-7616568











http://www.slideshare.net/NonprofitWebinars/why-when-and-how-the-big-gift-campaigns-work-7285907



















http://www.slideshare.net/NonprofitWebinars/advancement-best-practices







Find listings for our current season of webinars and register at:

NonprofitWebinars.com

Best Practices to Advance Planned Giving

Business

advancement best practices

advancement efforts

review advancement strategy

planned givingrod millerjuly

review trajectory

right leaders volunteer

new key stakeholders

estate restrictedunrestricted