The Legacy Property Fund Growing Conservation Philanthropy

The Legacy Property FundGrowing Conservation Philanthropy

Keystone Conservation TrustMay, 2010

Funding Conservation using the Legacy Property Fund

What: • New pipeline of private sector capital

Why: • Diversify and expand funding • New major gifts tool for you• Tax-advantaged opportunity for your supporters

How:• Tap in to a new asset base for conservation

philanthropy – real estate transactions

The Unrealized Potential of Gifts from Real Estate

Millions of dollars in gifts are achievable

Unlocking the Value in Homes at the Time of Sale

At the time a home is sold, there is an opportunity to create a gift Gifts can be created at no expense to the

seller, or gifts can be enhanced Reduced income taxes and savings on

capital gains taxes produce the gifts Basic transactions yield 3-5% of sales price

Flexibility of the Approach, Some Real Cases

Board member / major donor created single large gift from sale of summer home (second

home) Charitable couple created gifts to multiple conservation organizations from sale of primary residence Individual created multiple gifts from sale of summer residence

How the Program Works IRS sanctioned bargain sale technique

• Donation to KCT at appraised value with a promissory note from KCT at reduced value, creating the charitable gift

• Income tax benefit on gift amount• Reduced capital gains tax

No charge to organization nor donor• KCT retains 2% of sale price when property is sold to

a third party

Two tracks: Examples• Basic transaction (‘no cost’)• Philanthropic transaction (donative intent)

Sharing The Donation Donation split among KCT and other

charities of the donor’s choice Basic (No cost) Gift:

• 50-50 split NGO & KCT (KCT retains minimum 2% of sales price)

Larger gift: • 2% to KCT• Balance to your organization and other

charities of the donor’s choosing

Working Together Proactively communicate the

opportunity Identify potential prospects Test for interest, then, hand it off to KCT KCT handles logistics

Your role is critical to the fundraising outcome

Working with Your Supporters and You

Run customized scenarios• Four inputs: fair market value, basis,

mortgage amount and income tax bracket

Review by supporter and their advisors

Donation agreement• Before signing with buyer!

Donation, resale, and gifts

Who to talk to Piggyback on your existing

development activities Profile of best prospects

• Transition• Downsizing (less need for all

cash from transaction)• High tax bracket• Small or no mortgage on home (equity build

up)• Higher value properties or properties other

than primary residence (second homes)

What’s Next Drawing attention to the opportunity: “Drip” marketing

• Goal: build awareness, acceptance (and funds!)

• On-line on KCT and NGO websites• Print media – brochure, newsletter, targeted

letter to owners of conservation easements• Discussions with your Board, staff, donors,

realtors, financial advisors, attorneys Follow up with more information, as

needed

For additional informationKeystone Conservation Trust336 King of Prussia RoadRadnor, PA 19087

John [email protected]

www.keystoneconservation.org