Speaking With Your Contributors About Planned Giving
By Rita Fuerst Adams

Your organization has many loyal contributors you believe would like to give more if they knew how. Or, your organization is relatively new, but you know you have a few dedicated contributors who would like to do more.

In both cases, these contributors are giving as much as they can from current income. So, how do you speak with them about other ways they can make a gift to your organization?

Let’s start with what it means for contributors to plan their giving. Planned giving refers to any charitable gift that requires more thought and planning to execute than the average cash gift. You are suggesting other options for your contributors to consider. This includes gifts of stock, real estate, bequests, retirement plans and IRAs, and life insurance. It also may include charitable gift annuities, charitable lead or remainder trusts, and pooled income funds.

First build on your contributor’s deep passion for your organization and the work you are doing. Discuss with them how focusing their giving will make their giving more effective by working with a cause or a charity or two they truly care about. Of course, you want them to make your organization their most significant charity. Remind them that by planning their giving, they decide upon and then fulfill their philanthropic goals.

Follow with the ways planning their giving provides benefits to them and their families. They may:
  • Make a larger charitable gift than they thought possible.
  • Retain a stream of income for life for themselves and in some case for their beneficiaries.
  • Increase their current spendable income.
  • Reduce the costs and time in their estate settlement and reduce income tax through a deduction for their gift.
  • Avoid capital-gains tax on their gift of long-term appreciated property.
  • Eliminate federal estate tax on property passing to charity upon their death.
Now you are ready to speak with them about forms of gifts. Consider discussing the options that are easiest for them to execute and for your organization to receive and mange. These options follow.
  • Appreciated stock, publicly traded or closely held, are the most common type of non-cash gift. Your contributors save in income taxes through a charitable contribution deduction and may avoid capital gains tax.
  • Real estate is the second most common type of non-cash gift. Your contributors may receive a charitable income-tax deduction for the full fair-market value of their property and they may also avoid tax on the capital gains element of their gifted property.
  • Bequests are the most popular planned giving method. Your contributors simply include a written statement in their will directing specific assets, or a percentage of the estate, to be transferred to their charity.
  • Wills are integral to your contributors’ financial and legal planning. Planning can reduce the taxable amount of the estate and in some cases eliminate estate taxes that would otherwise be payable by your contributors’ heirs. Remind them, if they do not decide what to do with their assets, the government will.
  • Your contributors’ retirement plan assets may be the single largest asset in their portfolio. They simply obtain a beneficiary designation form from the retirement plan administrator and name your charity as the entire or partial beneficiary of the retirement plan. Your contributors also may avoid federal estate-tax liability.
  • Life insurance is similar to a retirement plan designation. Their gift to your organization is accomplished by naming it as a beneficiary of the policy. They retain ownership of the policy and have access to the policy’s cash value. Again, they may avoid federal estate-tax liability.
Remind your contributors when making non-cash or planned gifts to always work with their own attorney, tax professional, or investment professional to complete the gift. This is in their best interest and the best interest of your organization.

Now is the time to speak with your contributors about how they can give more to your organization.

Rita Fuerst Adams, CFRE, president of Charitable and Philanthropic Management Counsel, specializes in serving new and emerging not-for-profit organizations and in establishing fundraising programs. Contact her at rita@rita1st.com, or call 617-268-4960.