Introduction to Planned Giving Generous Stewardship Ministry The Free Methodist Church in Canada
Jan 12, 2016
Introduction to Planned Giving
Generous Stewardship Ministry
The Free Methodist Church in Canada
Planning Giving?
70% of Canadians do not understand what “Planned Giving” is Annual Gift Plan (giving while you are living) Planned/Estate Giving (giving after you are gone)
90% of Planned Giving is through bequests (wills)Most lawyers do not know/understand ‘Planned
Giving’ or the effect it may have on estate taxes
People do not know what they do not know….
PLANNED GIVING
Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)
You need a Current Estate Plan if you…
Have DependantsOwn a Home/Property Have RRSP/RRIFHave Insurance PoliciesHave SavingsOwe Debt
Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)
Without an Estate Plan…
You have no say in how your property is distributed
Church/Charities get nothing Your dependants may not receive
enough Your children may receive too much too
soon No opportunity to select a guardian Your estate may pay more taxes Your funds/property may be frozen
(probate) You family may/will fight over it
Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)
Simplest Estate Plan...
Give away all your possessions before you die “Go sell all your possessions and give the money to the
poor, then come and follow me…” (Matt. 19:21)
Owe nothing to no one Let no debt remain outstanding, except for the debt of
love (Romans 13:8)
Download Biblical Principles on Stewardship VERSES
But Remember…
Look after your family… Parents ought to save up for their children (2 Cor. 12:14) If anyone does not provide for his relatives, and especially
for his immediate family, he has denied the faith and is worse than an unbeliever (1 Tim. 5:8)
Look after your neighbour… Love your neighbour as yourself (Luke 10:25-37) All the believers were together… selling their possessions
and giving to anyone as they had need (Acts 2:44-45)Seek first the Kingdom…
Do not store up for yourselves treasures on earth… but store up treasures in heaven (Matt. 6:19-20)
Download Biblical Principles on Stewardship VERSES
Cultural Messages…
• He who dies with the most – wins• You must protect your future &
family (someone else will look after the rest)
• You can always have/use/need more
• You Deserve it, because You earned it!
• Give only after you are gone if there is anything left (spend it before you go)
• What I do with my money is my business (it is not your money!)
Biblical Principles…
• Don’t worry – seek His Kingdom first and build a treasure that will last in heaven (Matt. 6:28-34)
• Don’t put your trust in wealth – but be rich in good deeds & willing to share (1 Tim 6)
• Enough is never enough (So stop trying to get enough) (Eccl. 5:11 )
• You’ve been blessed – so that you can bless others (2 Cor. 8:14 & 1 Tim. 6:17-18)
Download Biblical Principles on Stewardship VERSES
Be Prepared to Give an Account…
“What did you do with what I gave you ?” (whether you thought it was a little or a lot)
Download Biblical Principles on Stewardship VERSES
Plan to be Generous…
GAIN all you can
SAVE all you can
GIVE all you can
~ John Wesley ~
Common Planned Giving Options
GIFTS OF CASH & PROPERTY INTEREST FREE LOANS
BEQUESTS – GIFTS UNDER WILL LIFE INSURANCE
(OUTRIGHT/BENEFICIARY)
PUBLICALLY TRADED APPRECIATED SECURITIES
RRSP / RRIF (PORTFOLIOS & PARTIAL DRAW-DOWNS)
ENDOWMENT FUND (FMCIC FOUNDATION/LORNE PARK FOUNDATION)
Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)
Start by Asking the Right Questions…
How little do I need to keep?How much does my family
really need (vs. want)?What is GOD saying to do
with the rest?Heart Check –
“Am I giving only to get something?” Tax Benefit, Recognition/Control/Legacy
Ask the Right Questions….
Does the plan need to be revocable / reversible?
Bequests (Wills) Insurance Policies RRSP/RRSP
Ask the Right Questions….
Is it better to get the tax credit now? Outright Gift of cash, property, RRSP Portfolio Appreciated Securities Insurance Policy owned by Charity Interest Free Loans (interest portion) Charitable Gift Annuity Endowment Fund (unless a bequest) *
Or have my estate benefit from a tax credit? Bequest under a Will RRSP / RRIF Insurance Policy with Charity as beneficiary Endowment Fund through Bequest*
* Contact FMC Foundation or Lorne Park Foundation
Ask the Right Questions….
Will my choice be subject to PROBATE? Bequests under a Will (usually)
Obtain advise from qualified planner/lawyer
Ask the Right Questions….
Does I need to generate income during my lifetime?
Charitable Gift Annuity Charitable Remainder Trust Gift of Residual Interest/Property
Obtain advise from qualified planner/lawyer
Ask the Right Questions….
Do I want the ministry to use my gift immediately?
Outright Gift of Property/Cash Outright Gift of Appreciated Securities Outright Gift of RRSP/RRIF * Interest Free Loans Portion of RRSP/RRIF given now Endowment Fund
* CAUTION – ensure you have enough to handle life without RRSP/RRIF
Ask the Right Questions….
Do I need a Lawyer? Financial Advisor? Tax Accountant? All of the Above?
Who are you going to call?
“A WISE MAN LISTENS TO ADVISE” (PROVERBS 12:15)
“WITHOUT GOOD DIRECTION, PEOPLE LOSE THEIR WAY;
THE MORE WISE COUNSEL YOU FOLLOW,
THE BETTER YOUR CHANCES” (PROVERBS 11:14)
“BLESSED IS THE ONE WHO DOES NOT WALK
IN STEP WITH THE WICKED…” (PSALM 1:1)
Getting the Right Professional Advice
EACH GIFT PLAN IS UNIQUE; FIND SOMEONE THAT CAN
EXPLAIN IT SO THAT YOU CAN UNDERSTAND IT
WITH THE RIGHT CREDENTIALS: Certified Financial Planner (CFP)
Chartered Accountant (CA) – specializing in financial planning
Personal Financial Specialist (PFS)
WITH THE RIGHT VALUES:Advisors with Purpose: advisorswithpurpose.caChristian Stewardship Services: csservices.ca
Responsible/Ethical Investing
Obtain advise from qualified planner/lawyer
Bequests made to the Church
Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)
Be both generous & specific in your will, but remember to keep it simple.
The more complicated you make conditions, the harder (and costlier) it is for the ministry to use your gift.
Remember that churches sometimes change their names and some close their doors; Word your bequest in such a way that if this happens, your executor can still honour your wishes.
Don’t forget to keep on giving while you are living.
Planned Giving Options
Obtain advise from qualified planner/lawyer
Make church/charity beneficiary (after spouse) on RRSP / Insurance
Add clause in Will – “bring Estate Taxes to Zero” through giving to named charities
Consider “Child called Charity” Consider “Legacy Fund” where
Church/Charity receives funds over 20 years
Legacy Gifts
Richard Radcliffe – Legacy Fundraising Consultant, UK
Legacies are not about death – they’re about the future life of ministries and charities / people / the world.
Legacies are life driven – death activatedLegacies cost nothing nowLegacies are an investment, not a gift – can
you be trusted with it?
Bequests made to the Church
Download the FMCiC Will Planning Guide from fmcic.ca (stewardship ministry section)
Recommended statement (or similar wording):
“For the (name of ministry/ongoing ministry) of (Local Church Name)
Currently situated at (address of local church/Ministry). If, through the passage of time, this bequest becomes obsolete,
permission is given to alter the terms adhering as closely as possible to my original wishes.
Should the (Local church/ministry name) no longer exist, the funds should default to The Free Methodist Church in Canada, currently situated at 4315 Village Centre Court,
Mississauga, ON L4Z 1S2, to be used for ongoing ministry.
Gifts of Publically
Traded Securities
Contact FMCiC Director of
Administrative Services
Gifts of Publically Traded Securities
Assumes top tax bracket (46%)
Sell Shares and Donate Proceeds
Donate Sharesto the Church
1. Value of the Shares $50,000 $50,000
2. Original Purchase Price $20,000 $20,000
3. Capital Gain $30,000 $30,000
4. Taxable Gain (Line 3 x 50%)
$15,000 $0
5. Donation Tax Credit (Calculated at 46%)
$23,000 $23,000
6. Tax on Capital Gain (Line 4 x 46%) $6,900 $0
7. Net Tax Savings (Line 5 - Line 6)
$16,100 $23,000
8 Donation Receipt $50,000 $50,000
$6,900 in tax savings by donating the shares to the churchinstead of selling them and donating the proceeds.
(NOTE: The actual tax savings depends on your specific situation)
Modified from "Planned Giving , The United Church of Canada, Gifts of Publically Traded Securities. Actual tax savings
depends on your specific individual tax situation. Seek independent tax advice for your specific situation.
http://www.united-church.ca/files/getinvolved/donate/howto/planned/resources_09.pdf
What does the Church Need to Do?
Celebrate Generosity Encourage Generosity
Plan Generosity Thank Generosity
Church Gift Acceptance Policy
“SPENDING OF FUNDS IS CONFINED TO PROGRAMS AND PROJECTS APPROVED BY THE
CHURCH BOARD. EACH CONTRIBUTION RESTRICTED FOR USE IN SUCH AN APPROVED
PROGRAM OR PROJECT WILL BE SO USED WITH THE UNDERSTANDING THAT WHEN THE
NEEDS FOR SUCH A PROGRAM OR PROJECT HAS BEEN MET, OR CANNOT BE COMPLETED FOR ANY REASON AS DETERMINED BY THE
CHURCH BOARD, THE REMAINING RESTRICTED CONTRIBUTIONS WILL BE USED
WHERE NEEDED MOST.”
NOTES: EVERY EFFORT MUST BE MADE TO USE FUNDS FOR
THEIR ORIGINAL DESIGNATED USEBUILDING FUND DESIGNATION IS SOMETHING
THAT WOULD REMAIN RESTRICTED (BECAUSE THERE IS ALWAYS A BUILDING)
Planned Giving Policies & Guidelines
REAL ESTATE & GIFTS IN KIND LEGAL ISSUES
ETHICAL ISSUES PRACTICAL CONSIDERATIONS
CONFIDENTIALITY
Church Gift Plan
GIVE SOMESAVE SOMEPAY SOMEUSE SOME
What can you do now?
Start a plan to be generousSteward all your resources to make
the most of what God gives you – both now and after you’re gone
Get the right advisor (s)(financial, tax, accounting)
Get the right legal adviceGet/Update willLive Generously now
“We ought not to forbid people to be diligent and frugal: we must exhort all Christians, to gain all they can,
and to save all they can... What way then (I ask again) can we take that our money
may not sink us to the nethermost hell? There is one way, and there is no other under heaven. If those who gain all they can, and save all they can,
will likewise give all they can, then the more they gain, the more they will grow in grace,
and the more treasure they will lay up in heaven."
John Wesley
Cited from The Works of the Rev. John Wesley, vol. XV (London: Thomas Cordeux, 1786).
Generous Stewardship Ministry
THE FREE METHODIST CHURCH IN CANADA