UWRA 1 Blueprint for Building Your TLC Donor Base and Lifetime Donor Value …thru Planned Giving and Endowment Development Techniques Great Rivers 2014.

UWRA 1

Blueprint for Building Your TLC Donor Base and Lifetime Donor

Value

…thru Planned Giving andEndowment Development Techniques

Great Rivers 2014United Way Retirees Association

Session Objectives

• Provide a quick overview of Planned Giving and Endowment

• Review Endowment and Planned Gift opportunities which increase lifetime donor value

• Resources and Contact Information

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Planned Giving Is…

A donor service…

A gift planning technique

that enables donors to

make gifts of assets to United Way.

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Planned Giving is …

•A technique/process for giving assets just as payroll deduction is a technique for giving income

•Three types of Planned Gifts:

–Outright Gifts of appreciated assets (stock gifts, real estate)

–Bequests (Wills, Retirement Plans, Life Insurance)

–Split Interest (Charitable Gift Annuity, Trusts)

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Split Interest

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Donor TRUST

to

Donor

to

United Way

AnnuityCharitable RemainderPooled Income Fund

Split Interest

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John Jones 65 Mary Jones 60

Property $200,000

Bypass of gain & Income tax deduction

Trust Principal $200,000

6% Unitrust

Two Lives

Increased income from trust $12,000.

Charity $321,687

Trust to charity.

What is Different?

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Planned Giving involves

• Donors choose the timing of the gift (now or later)

• Planning on the part of the donor…It is a “Stop and Think” gift

• A team effort (donor, financial or legal advisor, gift planner)

• Some gifts return an income

• Enhanced tax benefits, lower cost of giving

• Increases lifetime donor value!

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Are They the Same?

•Planned Giving

• Endowment

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What is an Endowment?

Principal United Way

Income

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Three Ways to Hold Endowment Funds

WithinUnitedWay

UnitedWay

FoundationCreated byUnited Way

UnitedWay

CommunityFoundation

1 2

3

Community Foundations and United WaysCompete or Collaborate?

One-time Grants

Broad Focus

Narrow and Affluent Donor Base

Small Number of Decision Makers

Endowment is an End

On-going Grants

Health/Human Service Focus

Broad and Diverse Donor Base

Broad and Diverse Decision Makers

Endowment is a Means to an End

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Planned Giving Purpose

While the purpose of a planned giving program is to

• Increase the donor’s giving capacity to give by

offering Planned Giving vehicles…

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The purpose of the Endowment Fund is to diversify and expand United Way’s resources by investing planned gifts such as bequests and trust gifts

• Increase resources beyond what is possible through the annual campaign

• Stabilize the community against fluctuations in the annual campaign

• Provide a flexible source of funding to respond to emergencies or emerging issues

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Endowment Fund Purpose

Outright Gifts to Endowment/Planned Gifts to Endowment

• Enables United Way to diversify and expand resources by investing planned gifts such as bequests ,trust gifts, Legacy gifts, life insurance, etc.

• Enhances and income stream to support the mission.

• Is an integrated resource strategy to better meet donor needs.

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Several Ways to Use Funds

• Endow special project or initiative

• Field of interest

• Unrestricted endowment fund

• Strategic operations endowment

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Why Is a Planned Giving Program and Endowment Development Relevant and Crucial to a United Way?????

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• Corporate downsizings

• Flat participation

• Corporate charitable interests closely aligned with strategic marketing

• Competition for the charitable dollar

• E-based fundraising

• On average 25% of UWW campaign was designated

External Influences

Virtually Untapped!

Alternative Market Opportunities

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Noncorporate Business Assets

4%

Cash12%

Bonds18%

Mortgages & Notes

3%

Life Insurance 3%

Real Estate19%

Stock31%

Other10%

What’s In Estates?

Giving USA 2011 Numbers

2010 contributions = $291 B

2011 contributions = $298 B

2012 contributions = $316 B (+3.5%, +1.5% inflation adjusted)

Corporation 12.2% for 2012

Bequest 12% for 2011, 8.8% for 2010, -7% for 2012

Major increases to arts, environmental, animals

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Will

33 UWRA

Bequest Potential

• 50% of population dies without a will

• Of those who have a will, 50% are out-of-date

• Only 8% of those who have a will include a charitable provision

• Only 20% of those who file estate taxes (<1% of the population), include a charitable provision

• Only 3% of Tocqueville givers made a planned giving commitment

• Over 60% of planned giving income is from bequests

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Ultimate Gift Ultimate Gift = =

$250,00$250,0000

$600,60$600,6000

Lifetime Donor Lifetime Donor Value = Value =

Annual Gift is $700 for 8 Annual Gift is $700 for 8 years = years =

$5,600$5,600

Annual Gift is $5,000 for 7 years Annual Gift is $5,000 for 7 years = =

$35,00$35,0000

Annual Gift is $10,000 for 6 years Annual Gift is $10,000 for 6 years = =

$60,00$60,0000

25 years of endowment 25 years of endowment revenue = revenue =

$250,00$250,0000

Lifetime Donor Value: Lifetime Donor Value: Tocqueville CoupleTocqueville Couple

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Tocqueville Legacy Circle Description and Recognition

Criteria

A minimum gift of $200,000 to United Way’s endowment. It is recommended donors consider a gift that is 20 times their annual gift level. Gift may be current or deferred Gift may be revocable or irrevocable, but not contingent

Notification in writing of the donor’s intent to endow a Tocqueville-level gift.

Approved by the National Planned Giving Council 12/14/10

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In the Years Ahead There Will Be Two Types of United Ways

• Extinct

• Endowed

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Why Planned Giving and Endowment

• Billions More For Services

• Two largest donors to endowment funds

– Dow Jones

– Compound Interest

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Starting Your Planned Giving and Endowment Development Program

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When You Come To A Fork In The Road . . .

Take it. Yogi Berra

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1. The Case or Vision (Feasibility Study)

Building Your Planned Giving Program

Questions Answered by Study

•Why do you need it?

•Will the donors support the program?

•Will it compete with the annual campaign, partner agencies, the community foundation?

•How will funds be used?

•Where will they be invested?

•How much will it cost?

•What obstacles do we anticipate?

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If there is a trap out there … we find it!

United Way EPG Barriers

• No Case - - -

• Measured On Annual Results

• No Volunteer Champions

• Perceived Competition With:

–Annual Campaign

–Agencies

–Community Foundations

• Inadequate Attention Or Resources

• Unrealistic Short-term Expectations

• Fear (too technical)

• Stakeholders not involved or included (including internal staff)

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Elements of a Successful EPG Program

Well Developed Business Case

Implementation of programs such as:

Community Impact Model

Loyal Contributor Program

Relationship development vs. transactional giving

Leadership/Major Gift programs

Transformation Gifts ( i.e., funding operational and strategic expenses)

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Resource for Case DevelopmentUnited Way Retirees Association

• United Way Retirees Association (UWRA) Consulting Illustrates a Case Development Process

o Process – Feasibility Study

o Outcome

–Compelling Business Case developed by core team

–Case embraced by staff, volunteers, financial professional, and partner agencies

–Measurable Goals and Action Plan

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Major Gift

Annual Giving

Ultimate Gift

Gift Planning

What we want to have…

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ResourcesUWW and UWRA

Help From United Way Worldwide

• EPG Toolkit – information, resources, sample letters, etc https://online.unitedway.org/site/soe/cafe/File.cfm?PPFID=606

• Planned Giving Webpage www.uwgift.org (put a link on your website)

• United Way online Planned Giving Webpage http://online.unitedway.org/site/uwaservices/teampage.cfm?AID=26

• EPG Listserv

• Major & Planned Giving Institute

• Training, telephone, and E-Mail Consultation

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Help From United Way of America (cont)

• United Way Retirees Association Interim Staff and Mentorship program

• United Way Planned Giving Message Guide

• “Turn Key” Pooled Income Fund http://online.unitedway.org/site/uwaservices/teampage.cfm?AID=610

• “Turn Key” Charitable Gift Annuity Program” http://online.unitedway.org/site/uwaservices/teampage.cfm?AID=1957

• Discount Rates on Direct Mail Newsletter and Planned Giving Software (Strategies Newsletter http://online.unitedway.org/site/vopenfile.cfm?fid=2971543

• Best Practice Materials

• Planned Giving Statistics for all UWs

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Resource for Case DevelopmentUnited Way Retirees Association

• United Way Retirees Association (UWRA) Consulting Illustrates a Case Development Process

o Process – Feasibility Study

o Outcome

–Compelling Business Case developed by core team

–Case embraced by staff, volunteers, financial professional, and partner agencies

–Measurable Goals and Action Plan

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Contacts

Evelyn Morgner

United Way Worldwide

Tel: 703-836-7100, ext. 341

Email: [email protected]

Tricia Smith

United Way Retirees Association

Tel:

Email: [email protected]

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Thank you/Questions

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