Chapter 12
Beyond the Simple Cash Contribution:
Planned Giving
It is easier for a camel to go through the eye ofa needle, than for a rich
man to enter the kingdom ofGod.
- St. Matthew, Chapter 19, Verse 24
The growing number of nonprofits and NGOs around the world and the increasing need for their
services have created unprecedented interest in innovative revenue generation strategies. In the
United States alone, the growth of the nonprofit sector has been dramatic: in 1946, there were
100,000 nonprofits; in 1963, 500,000; and by 1996, there were more than 1,300,000.1
As a
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274 APPROACHING INDIVIDUALS FOR SUPPORT
result, organizations are charting new fundraising directions to underwrite their work; raising
money via the Internet and engaging in earned and venture income initiatives are just two
examples.
Nonprofits are also turning to a traditional form of fundraising-planned giving-for its
potential to generate substantial revenues, for the benefits it provides to both donors and the
organization, and for its ability to create support for the present and the future. "Planned giving"
is the broad term used to describe the integration of estate, tax, and overall financial planning
with philanthropic planning so as to maximize a gift's benefits to the donor, the donor's family,
and the recipient charity.
Nonprofits with the resources to launch, or intensify, planned giving programs can use
this powerful tool to foster their solvency and cover increased costs while building long-term
organizational viability, especially through establishing and increasing endowments, fulfilling
long-range plans, and providing a cushion for emergencies. In increasing numbers, donors are
now allocating their resources to benefit an organization during, or after, their lifetime through a
planned gift.
Pooled income funds; charitable remainder, lead, and income trusts; gift annuities; and gifts
of securities, real estate, works of art, and other property are some examples of planned gifts that
benefit an organization, and the donor, during a donor's lifetime. Vehicles that take effect after
a donor's death include naming an organization as the beneficiary of life insurance, and
bequests-the most popular planned giving vehicle. In the most mature planned giving programs
in Canada, bequests account for some 80 percent of all planned gifts.' The level of
bequest giving in the United States in 1999 ($15.61 billion") attests to the impact this one form of
planned giving can have on the work of nonprofits.
The Growth of Planned Giving
Although it is not as well known as other fundraising strategies, the number of nonprofits undertaking
planned giving programs has increased substantially over the last few decades. In the
United States, this increase has been driven by several factors, including the ongoing development
of planned giving financial instruments; an increase in the number of planned giving professionals,
lawyers, accountants, development officers, and other nonprofit staffers familiar
with these vehicles; and the increasing transfer of wealth from one generation to another as the
baby boomers gray. At the tum of the century, some $6 to $8 trillion was expected to have passed
from the baby boomers' parents to their children, doubling or tripling the number of millionaires
in the United States from approximately 1.5 million to as many as 4.5 million." From a strategic
point of view, planned giving is a powerful means for nonprofit organizations to tap into a significant
share of this transfer.
I. From an address by demographer Judith Nichols to the Ohio Prospect Research Group in 1997.
2. Malcolm Burrrows	 and Ann Roscnfiel, "Bequest-Based Programs: Basic, Boring, and Profitable," Canadian
Fundraiser (30 October 1996).
3.	 Ann E. Kaplan, ed., Giving USA: The Annual.Report on Philanthropyfor the Year 1999 (New York: American Association
of Fund-Raising Counsel).
4. Council on Foundations, Organized Philanthropy in the United States. (Washington, D.C.: Council on Foundations).
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275Beyond the Simple Cash Contribution: Planned Giving
Planned giving is, however, hardly a new idea. Plato made one of the earliest recorded
planned gifts when he left money for his Academy's maintenance after his death. In his will
Shakespeare earmarked ten pounds for the poor living in Stratford, England, and Giuseppe
Verdi's will specified that royallies from the performance of his operas be used to benefit a home
for retired singers and musicians in Milan, Italy. Alfred Nobel's estate endowed the Nobel
Prizes, and the provisions of James Smithson's will established The Smithsonian Institution in
Washington, D.C. The Kamehameha School for children of Hawaiian descent was established
by Princess Bernice Pauahi Bishop, who established a trust to support it. And the David and
Lucile Packard Foundation was established by the co-founder of the Hewlett-Packard Corporation,
David Packard.
Today, the potential for nonprofits and NGOs the world over to help secure their future
through planned giving programs is enormous-and largely untapped.In the United States (population:
285 million) alone, for example, about two million people die every year, and some
60,000 estate tax forms (required for estates in excess of $600,000) are filed with the U.S.federal
government. Only 17 percent of these forms list a charitable gift, and 83 percent of the country's
wealthiest individuals leave nothing at all to charity .
Further evidence for such optimism can be found in remarks made by Canadian fundraiser
Dr. Edward H. Pearce as reported in 1995.
Most of us now know that a growing proportion of the Canadian population is getting
older and living longer, that the smaller nuclear family has resulted in fewer potential
beneficiaries, that people 50 or older arc in control of75 percent of all assets, that they
hold an estimated $250 billion in real estate, and that an increasing number of people
have become cash poor but asset rich as the result of inflation.
However, many may not be privy to the finding s of the October 1994 Royal Trust
Wealth Management Poll, a survey of the top 25% of Canadians by income. According
to that research, 45% of respondents indicated that they expected to receive an inheritance.
Fully 81% describ ed themselves as middle class, and of those whose assets were
over $500,000, 35% still described themselves as middle class.
This perception will certainly impact the ways that planned gifts are approached
and marketed in the future . The priorities of those surveyed were as follows: 90%
would pass on their estate to their heirs; g8% wished to minimize taxes on their estate;
and 95% wanted to preserve the value of their assets after retirement. One final finding
of note: of the 45% who expected to receive an inheritance, a high percentage indicated
that they would consider making a charitable gift.
For organizations with sufficient resources and prospects to launch a planned giving program,
the time is right to take a closer look at planned giving for the potentially significant role it
can play in their funding mix. Even for nonprofits that are too new to have built the constituencies,
resources, and track record to launch such a program, the following discussion will help
them prepare for the future.
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APPROACHING INDIVIDUALS FOR SUPPORT276
What Are the Advantages of Raising Money by Planned
Giving? .
1. A planned giving program sends a strong message to its constituents: "We know that
the issues that we are addressing will not totally disappear in our lifetime, so we are
creating a planned giving program to make sure that our efforts can continu e."
Soliciting planned gifts is an important step organizations can take now to create
revenues that will secure their future.
2. Provided that expenses are limited to the cost ofprinted materials, legal counsel, and
mailings, an organization's planned giving campaign may be launched with only
modest up-front capital. Of course, there are the indirect costs of staff and volunteer
time, and the cost of any materials or seminars that you attend to further your own
understanding of this area of charitable giving.
3.	 Undertaking a planned giving program extends the scope of an organization 's plan ning
process from years to decades , and sharpens its financial managem ent by forcing
it to 'consider the fin ancial and human resources needed today to cre ate revenues
tomorrow.
4.	 Planned giving can increase an organi zation's revenues without asking its supporters
to give more. At the same time , planned giving provides current don ors with an
option for giving more without decreasing their income.
5.	 Planned gifts enable donors to leverage use of their assets and enjoy recognition
now for making a gift that, at the moment, need not reduce their assets or income.
6. Planned gifts frequently contribute to an organization's lifeline-funds for opera ting
expenses. As institutional funders increasingly restrict thei r giving to specific
programs, planned gift s-which frequently do not specify a purpose for the funds'
use---can provide the vital unre stricted support organizations need for operating
expenses.
7.	 Planned gifts can help ap org anization create an endowment. For nonp rofits that
normally cannot divert dollars fro m paying bills and salaries to build an end owment,
planned gifts can provide revenue that can be used for building up an endowment.
8. Knowing that	 significant funds are committed to an organization in the future
assures both indi vidual and institutional funders of its long-term viability.
What Are the Disadvantages of Raising Money by Planned
Giving?
1.	 An organization mu st commit time and money to raise funds that don't pay
next month's bills, or even next year's. Because planned giving usu ally provides
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277Beyond the Simple Cash Contribution: Planned Giving
deferred income to an organization, you are so liciting gifts that cannot be used for
your organization's present programs and needs. With wills, life insurance policies,
or most charitable remainder trusts, proceeds become available only when the donor
dies. You will want to think carefully about allocating time and money to planned
giving programs if your organization cannot meet its immediate cash needs.
2. Planned giving can involve large sums of money, substantial personal contributions,

lifetime commitments, and serious fiduciary res ponsibilities. Any nonprofit consid­

ering entering this area should, therefore, approach it carefully and methodically,

and consult with planned giving experts . ./

3.	 Executive directors without experience and training in this area can be justifiably

wary of such an undertaking, especially since it may involve an organization's mos t

significant donors. Some may also be uncomfortable in discussing bequests with a

donor.
4. Members of your board must be among the first to participate: an organization will
find it difficult to secure the participation of others unless its top leaders have chosen
to participate.
The Different Kinds of Planned Giving
Laws governing planned giving vary greatly from country to country, and are frequently revised.
The discussion that follows describes planned giving vehicles in their generic form for nonprofit
organizations in the United States," Further, in the United States the laws of the various states
may affect planned giving. Readers are strongly advised to consult an attorney and an acco untant
who specialize in planned giving before making-or soliciting-a planned gift.
Immediate Funds for the Nonprofit: Outright Gifts of Property
Younger organizations undertaking planned giving programs usually need immediate support,
and would do well to solicit gifts of property-such as securities and real estate-that can be easily
converted into cash.
Individuals making gifts of appreciated securities to nonprofit organizations receive their full
value as a deduction and avoid any capital gains tax resulting from the securities' appreciation.
5. U.S. law qualifies every nonprofit tax-exempt organization whose activities have been designated as charitable by the
Internal Revenue Service under Section 50 I(c)(3) of the Internal Revenue Code (evidenced by receipt of a "determination"
letter of federal tux exemption from the IRS) as potential recipients of any planned gifts. TIle IRS lists all such
organizations in Publication 78, which is available for $35 by writing the Superintendent of Documents. U.S. Government
Printing Office , Washington, DC 20402, 0:ca~ be accessed on the World Wide Web (upda ted and corrected
quarterly). Of course, a donor may make a contribution to an organization or designate it in a will, regarcless of tax
status. However, unless the h'1'OUP is designated as charitable, the donor (or hi, estate) may not receive all tax
advantages.
278 APPROACHING INDIVIDUALS FOR SUPPORT
Donors can transfer securities by sending stock certificates or by instructing their broker to
transfer them electronically to the nonprofit's account.
Outright gifts of real estate generate benefits for both organization and donor: they are easily
converted into cash by the organization; they entitle the donor to a tax deduction in the amount of
the sale price; and they permit the donor to avoid paying capital gains tax on the amount the
property has appreciated since purchase. This may be especially interesting to a donor who has,
for example, lived in a house whose value has appreciated substantially over the long period the
owner has resided there. It is also possible to donate a portion of a property, to make the gift in
stages, or to make a gift ofreal estate known as the "part gift/part sale," or "bargain sale." In this
case, a donor sells property to an organization for a "bargain price" that is substantially below
market value and is credited with a gift in the amount of the difference between the property's
market value and the price for which it was sold. The donor can take a deduction for-and avoid
paying capital gains tax on-the amount of the transaction considered a gift. However, the portion
of the capital gains allocable to the "sale" is taxable. The transfer of real estate is done
through a simple deed containing text similar to the following:
I1we hereby give the property at (insert address or description of property being
donated) to (insert name of recipient organization).
Outright gifts can be made of other kinds of property, such as land, automobiles, clothing,
furniture, art collections, gas and oil rights, partnership rights-anything an individual might
own. The amount of income tax deduction is based on a number of variables, such as the current
value of the property, the nature of the property, whether the giver owned it for more than one
year ("long-term"), and whether the nonprofit can use the gift for its tax-exempt purposes. It is
advisable to conduct (or ask the donor to secure) a Phase One environmental study of any proposed
gift of real estate. Also, the charity should calculate the cost of holding real property in the
event that it is not readily salable. Gifts ofpartnership intere sts should be analyzed for unrelated
business income tax issues and potential "phantom income" problems.
Immediate Funds for the Nonprofit: Life-Income Gifts
Individuals wishing to make a significant gift without losing income from assets that are donated
can make a life income gift. Each type ofl ife income gift has its own special features, but they all
share one basic concept: the donor receives satisfaction and recognition for making the gift. yet
still receives income from the donated assets. Other benefits to donors of life income gifts
include avoiding capital gains tax on transfers of appreciated assets; receiving inunediate tax
deduction; and possibly enhancing retirement plans and reducing eventual estate taxes.
Annuities and Trusts
Life income gifts commonly take the form of specialized gift annuiti es and trusts . An annuity is a
form of investment on which a person receives fixed payments for a lifetime or a certain number
of years. A trust is a fiduciary arrangement in which property is held and managed by one party
for the benefit of another. Gift annuities and trusts are often referred to as "deferred" gifts, since
the recipient organization has to wait until the donor's death to use the gift.
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279Beyond the Simple Cash Contribution: Planned Giving
Inorder for the donor to obtain a charitable tax deduction at the time of the gift, whether it is
an annuity or a trust, that gift must be irrevocable; once the gift is made, the donor cannot cancel
the arrangement at a later date. For this reason, among others, individuals considering such gifts
should always be encouraged to consult their legal and finan cial advisors. Donors making gifts
through living trusts or bequests can specify whether the funds are to be used for restricted or
unrestricted purposes. Such gifts can be made in the donor's name, or in honor or memory of a
family member, friend, or associate. The donor's desires regarding the use and ongoing
acknowledgment of the gifts should be clearly spelled out in the establishing documents, and
reviewed by legal counsel. Let's review each major type of gift annuity and trust arrangement.
Gift Annuity. Perhaps the most straightforward kind of planned gift is the gift annuity. A donor
makes a gift to a nonprofit organi zation and periodically receives a fixed sum for life as well as a
charitable deduction on his or her federal income taxes for a portion of the gift at the time it is
made. The assets used to purchase a gift annuity may be in the form of cash, securities, or real or
personal property. In exchange, the charity promises to make fixed payments (annuities) to the
donor ancIJor another named person for the duration of his or her life. Usually a portion of the
annuity is excluded from the recipient's gross income and is thus tax-free.
The recipient nonprofit is able to use the donated fund s after the death of the donor or the last
beneficiary. In the meanwhile, it can plan, build, or borrow on the basis of the value of the gift
that will be available to it in the future . If the recipient nonprofit prefers not to assume the obligation
of making the annuity payments, it can still establish the gift annuity by reinsuring the annuity
through a commercial insurance carrier.
"Reinsuring" means that the nonprofit sells the annuity to a commercial insurance carrier,
which then takes responsibility for the annuity. The legal obligation is thus transferred. When
the nonprofit sells the annuity to an insurance company, the nonprofit then receives in cash a
portion of the gift annuity it would have received when the owne r died had it chosen not to sell.
That portion will, of course, be less than the amount the nonprofit would have ultimately
received, but it can be used immediately by the organi zation.
Charitable gift annuity programs typically are regulated by the state in which the charity is
based.
Charitabl e Remainder Trust. In this arrangement the donor makes a gift in trust to the recipient
organization in the form of cash, securities, or real estate . The gift entitles the donor ancIJor
another named person to income for life (or for a stated period of years) and the donor receives a
tax deduction for the present value of tile remainder portion in the year the gift is made. At the
end of the period , the nonprofit may usc what is left in the trust-the remainder. Depending on
how well the funds have been managed, the amount will be either larger or smaller than the original
gift. Contributions of real property are possible, but typically require more complicated
planning.
There are two types of charitable rema inder trusts: the unitrust and the annuity trust.
Unitrusts provide a fluctuating amount of annual income to the donor or someone else named.
The amount is based on annual valuation of the trust and the stated percentage that tile trust pays
out (at least 5 percent). Annuity trusts provide a fixed amount of yearly income to the donor or
280 APPROACHlNG INDMDUALS FOR SUPPORT
The Gift Annuity Serves Two Purposes: Giving and Receiving
Suppose you are age 75 and want to give $10.000 to the American Cancer Society and
recei ve annual paym ents of 8.2 percent for as long as you live, Here is a sununary of the
results:
I. You transfer $ 10,000 for a gift annuity agreement.
2. You are permitted 10 deduct over $4.770 as a charilable gin ill the year the gift is
made . (Not e: If this is more than you ean dedu ct in the year of the gift, you can
carry over any excess deduction into the five succeeding tax years.) Th e exact
deductible amount may vary from month to month.
3. You will receive $820 each year for as long as you live . When you file your federal
ineome tax each year, you report only $396 for approximately the next 12
years. During that time. $424 of each payment doe s not have to be reported as
income. Afterward, the entire payment is taxable. (Note: The length of time that
payments are parti ally tax-free depends upon your age when the gift annuity is
created.)
4. At death, the American	 Cancer Society' s obligation to mak e the payments ends,
yet your gift continues to be used in the work you wished to furth er."
6. From the American Cancer Society Web site: http://cancersoeiety.org
person named . The amount is determined at the time of the gift, and may be either a stated percentage
or a fixed amount (in either case, at least 5 percent of the original gift amount).
Charitable Lead or Charitable Income Trust. The chari table lead trust can be an important tool
in a don or's estate planning, as there are beneficial income. gift, and estate tax implications.
There are different kinds of lead trusts that meet the varying tax needs of different individuals.
Organizations may use income from charitable lead or charitable income trusts for a specified
period of time. What remains after that time re verts to the donor or other person named by the
donor; this is the reverse of the ~haritable rem ainder trust. In all cases, the remainder of the trust
goes to whomever the donor designates. There are various ways to structure charitable lead
trusts depending upon the grantor's tax needs and philanthropic and pers onal desires. It is very
important to consult with qualified legal counsel.
Pooled Income Fund. Similar to a mutual fund, a pooled income fund enables individuals to
inve st their funds with others. However, through a pooled income fund the ultimate beneficiary
isa designated nonprofit orga nization. It works as follows: a don or invests mone y or property in
a pooled inco me fund established by a nonprofit. The donor designates those indi viduals who
will receive regular interest payments; when all benefi ciaries have died, the designated nonprofit
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281Beyond the Simple Cash Contribution: Planned Giving
receives a charitable tax deduction equal to the calculated present value of what eventually will
pass to the nonprofit.
This type of gift creates additional benefits for the donor. Since a nonprofit will benefit from
any permanent improvement to the property it receives (such as a new roof), the donor who
makes the improvement can declare the portion of the cost allocable to the charity's remainder
interest as a charitable deduction.The donor/resident is, however, still responsible for any mortgage
on the property, as well as for paying real estate and other taxes on the property while living
in it. If the donor chooses to move and relinquish the right to live in that home, the donor can
claim an additional tax deduction based, as before, on the property's value and age. This gift also
helps a donor avoid the trouble and expense of disposing of the property later.
The nonprofit organization receiving this type of gift benefits not only from eventual possession
of the donated property; it is able to carry the present value of its remainder interest as an
asset on its balance sheet. A gift of a donor's personal residence, or a portion thereof, is an ideal
planned gift to an organization. It can be a simple deed, and there are minimal administrative
responsibilities for the nonprofit.
Providing Support Beyond the Donor's Lifetime
Bequests
Individuals may increase their support for an organization during their lifetime by providing for
gifts to be made after their death. This is usually done through a will, the legal ,document that
tells how to dispose of what a person owns upon death. The gift itself is known as a bequest. A
person may give all or part of what he or she owns to a nonprofit organization, a specific dollar
amount, a percentage of the entire estate, a gift in trust, or specific items, such as paintings or
antiques, a book or stamp collection, or one hundred shares of Company X. It is also possible to
give part ownership in an item, such as 50 percent "partial interest" in real estate or in a painting
(in which case the nonprofit would hold and use the property for six months of the year). In the
United States, charitable gifts made through a will are 100 percent deductible for estate tax purposes,
and, by reducing the taxable amount of the estate, reduce estate taxes.
Unlike gift annuities and trusts, which may be irrevocable, bequests are revocable: a donor
may change his or her will at any time, removing one organization or adding another. For this
reason, an organization must never count income from bequests until it is received. It also should
develop a simple stewardship program to continue cultivating donors who have already named
the organization in their will.
Gifts by will can be worded as follows: "I give, devise, and bequeath to (insert name ofrecipient
organization) for its general purposes (or [or a specific purpose) all (or a fraction or percentage)
of the rest, residue, and remainder of my estate, both real or personal."
Life Insurance
A nonprofit may benamed as beneficiary of a new or existing life insurance policy, subject to
restrictions in somestates, The nonprofit may be the first ("primary") beneficiary, or a second,
third, or later contingent beneficiary for all or part of the policy's proceeds. Individuals may also
282 APPROACHING INDIVIDUALS FOR SUPPORT
Profile:
Moderate Gifts-Life Estate
Even donors of moderate means can make a substantial and meaningful gift to non-profit
organizations using a life estate arran gement. The following is a profile of a donor who
came forward and expressed her interest in making a gift to a charitable organi zation in
Northeast Ohio.
Mrs. Smith? attended a gift-motivating seminar which was hosted by the nonprofit
organization. Although she did not consider herself a candidate for a planned gift, she
approached the organization with her strong desire to make a gift that would perpetuate
her concern for the organization and those it served.
Mrs. Smith 's Concerns: She was living on a fixed income and was concerned about her
investments keeping pace with inflation. She had limited options for her maturing Series E
and EE bonds, and she wanted to avoid tax consequences and be able to increase her income.
She was also concerned about the disposition of her home, both in life and after death.
Mrs. Smith's assets totaled $465,000. They included $250,000 in government bonds: a
home valued at $110,000; an Individual Retirement Account valued at $45 ,000 ; $25,000
worth of personal property; and stocks and bonds worth $35,000.
The Solution: Mrs. Smith gifted her home to the charity while retaining the right to live
in it for the remainder of her lifetime. Since disposition during life was a concern, the life
estate offered variou s options while she was alive. She could gift her remainder interest to
the charity and receive another charit able tax deduction. An alternative would be for the
house to be sold and her remainder interest paid in cash or given through a gift annuity. As
a result of the gift, she was entitled to a $50,000 charitable income tax deduction that
helped offset the gain from the sale of her bonds.
Although Mrs . Smith never believed she had the capacity to make a charitable gift to
this organization, she was able to make a gift that satisfied her charitable and philanthropic
goal s and was a significant and meaningful gift for the organization. In other words, a
charitable planning strategy helped solve her personal financial goals.'
*	 Name has been changed to ensure confidentiality
7. Peggy Wallace Bender, "Profile: Moderate Gift -	 Life Estate," TRENDS (Cleveland: Strategies for Planned
Giving, Fall (995).
transfer ownership of life insurance policies to nonprofit organizations and gain income tax
deductions. The donor deduct s the cost basis in the policy or the policy's repl acement
value- whichever is less-as charitable contributions for income tax purposes.
Life insurance can be a convenient vehicle for charitable giving simply because an individual
may find that the original reason for purchasing their life insurance policy is no longer as pressing.
For example, they may have wanted to make financial provision s for children in the event of
283Beyond the Simple Cash Contribution: Planned Giving
their premature death, but then decide to make a favorite charity the beneficiary of their life
insurance policy when those children are grown and self-supporting.
Deciding Whether To Launch a Planned Giving Program
If you have decided that the advantages of establishing a planned giving program (as they apply
specifically to your organization) significantly outweigh the disadvantages, you will still want to
answer several questions before embarking on your planned giving campaign.
1. Will your work be ongoing? Does your organization plan to be around for the next
generation? Do you anticipate that your vision and mission will be as vitally important
at the end of the twenty-first century as it is at the beginning? A planned giving
program makes sense only if your leadership agrees that the organization and the
need for its work are ongoing. If you think that your mission will be accomplished
and your vision a reality within ten years, and that you do not plan to develop new
ones, then launching a planned giving program is clearly not a wise use of resources.
For example, if you are a college or a hospital, your mission is unending, and
planned giving has a clear place in your fundraising. Ifyou're a public interest advocacy
group seeking to stop construction of a nuclear power plant or improve your
community's mass transit system, however, you may well fulfill your mission in a
matter of years; if you do not plan to address new issues on an ongoing basis, you
will probably choose not to undertake a planned giving campaign.
2. Is your organization solid ? You must be able to demonstrate to prospective donors

of planned gifts-and their advisors-that your organization has the following char­

acteristics of a sound institution:

• An organizational vision sufficiently powerful to attract and justify financial
support in the future
• An active, responsible, publicly acknowledged governing body that supports
planned giving both in concept and in fact
• Sound finances as evidenced by audited financial statements
• Sufficient staff and access to experts to administer planned gifts
In short, an organization interested in receiving planned gifts-c-or any other
form of substantial contributions-must demonstrate that it is financially sound,
well-managed, and fully capable of administering those gifts, now and in the future.
Brand nf).w and recently established groups arc not the best candidates for planned
giving programs since they have just begun to reach out to the public for support.
Individuals are unlikely to respond to solicitations for planned gifts by these organizations.
More mature organizations with a strong network of regular donors are
likelier candidates.
284 APPROACHING INDIVIDUALS FOR SCPPORT
3. Do you have prospectsfor planned giving? Review your concentric circles exercise
(see the end of Chapter 7). Do you currently have donors with the financial ability
and loyalty to your organization to make such a commitment? Note that the commitment
need not be enormous.Everyone is going to die, and since no one can take very
much to whatever awaits, gifts of one's personal possessions usually can be put to
good use by a recipient organization.
Discussing planned gifts with board members and other key supporters is a good
way to learn if your organization has enough qualified prospects to launch a planned
giving program. In your conversations, remember that you are only raising a trial
balloon, and phrase your questions accordingly, e.g., "We are considering an outreach
effort to inform people how they could designate our organization as beneficiary
in their wills (or as a beneficiary of a life insurance policy). Since you are close
to our work and know us, we were hoping that you could tell us what you think about
the idea." You will not only obtain some pertinent data, but you will also be laying
the groundwork for actual solicitations further down the road.
4. What kind ofexperiences have comparable organizations had with planned giving ?
Check with nonprofits whose standing and donor base are similar to your own to
learn if their experiences with planned giving have netted positive results. Ask about
the pitfalls as well.
Organizing a Planned Giving Effort
Despite the legal and financial complexities of pla.nned giving vehicles and administration, the
process of soliciting planned gifts is based on the same principles that underlie any other kind of
solicitation. In fact, our frequently repeated maxims-"People give to people," and "The more
personal, the more effective"-are nowhere more applicable than in the area of soliciting
pIarmed gifts. Making a planned gift is a highly personal matter, and personal contact is needed
to establish the necessary level of trust.
More people than one would imagine make planned gifts. Older and larger nonprofit institutions
such as hospitals and universities have traditionally solicited bequests from major donors;
but now individuals from all walks of life arc solicited for a variety of planned gifts by organizations
both large and small. Nevertheless, for some nonprofit managers, creating a planned giving
program represents a real challenge, as it requires an ongoing commitment in an area that
demands extensive legal and financial expertise. Fortunately, organizations can be assured that
prospective donors will consult their own legal and financial advisors, and planned giving
experts can be retained.
Solicitors of planned gifts should not feel uncomfortable in discussing such gifts , as the focus
is life-the life of the organization, and the improved lives of those who have been or will be
helped by planned gifts. Moreover, the literature and planned giving software libraries are extensive,
and the many professional associations of planned givers offer conferences and seminars at
285Beyond the Simple Cash Contribution: Planned Giving
The Royal Ontario Museum Foundation Planned Giving Advisors
It's virtuall y impossible for even the large st nonprofit organizations to have the specialized
expertise they need in-house. But most organizations can enlist the help of attorneys
and accountants who specialize in trusts and estates, as well as bank trust officers and
financial planners, by convening a planned giving advi sors committee. Here is the
Description of Responsibilities and the Mandate for the Planned Giving Advisors created
by the Royal Ontario Museum (ROM) Found ation:
Planned Giving Adv isors to the Major Gifts and Planned Giving Com mittee
of the ROM Foundation will bring professional expertise to the
planned givers, accountants, finan cial planners, insurance execut ives,
investment counselors, trust and estate officers, and brokers. They will
bring invaluable knowledge to the marketin g and prom otion of planned
gifts in support of the Museum. It is anticipated that there will be about
ten advisors who will serve the Foundation in this capacity.
Specifically, Adv isors will:
• participate in presentations at seminars on estate and financial planning
for Museum members;
• suggest and/or contribute articl es to Museum publications about the tax
aspects of giving and about planned giving;
• prom ote the Museum and may, at times, have opportunity to refer a
potential donor to the professional staff of the Foundation;
• from time to time be called upon to advise on marketin g strategies, to
vet articles, marketing materials and prototype planned gift agreements;
• be called upon to brief Foundation staff on legal, techni cal or regulatory
changes and developments;
• meet from time to time as a gro up to discuss issues of common concern
and to learn about the programs and activities of the Museum.
Professional staff at the Foundation may refer a potential donor to an
Advisor to obtain professional advice, Referrals will be provided at the
request of the donor only. Unless at the request of the potential donor,
Advisors will not be involved directly in the solicitation of planned
gifts.
286 APPROACHING INDIVIDUALS FOR SUPPORT
many levels for nonprofit managers (see the Additional Resources section at the end of this
chapter).
Soliciting an organization's first few planned gifts can be simpler than it might seem. Since
the vast majority of planned gifts involve bequests (as mentioned earlier, 80 percent of all
planned gifts made in Canada are bequests), encouraging donors to include your organization in
their will covers at least 80 percent of your market. Bequests can, in fact, be the beginning of a
donor's involvement with an organization. If a donor includes an organization in his or her will,
it is possible that, with proper stewardship and cuiLivation, the donor's confidence and commitment
will grow and a planned giving plan may develop; the donor may even make cash contributions
in addition to the bequest.
The growth of an organization's planned giving program can be compared to building a highway
in an area where there is currently little traffic. Almost invariably, the highway attracts traffic;
once the stmcture is in place, activity increases. The same can be tnJe for a planned giving
program; once it is announced and a basic structure has been created, activity will increa se, and
the structure will expand to handle all situations.
A Step-by-Step Guide To Launching a Planned Giving Program
Step 1. Prepare Materials
Many specialized planned giving consultants will readily provide samples of brochures and
newsletters that can be personalized with your organization's name or logo. Publishers of these
newsletters have access to resources that many nonprofits cannot readily afford . To find the right
specialist for your institution, ask for recommendations from fundrai sers at institutions similar
to yours, or check profes sional magazines, books, or journals to identify planned giving experts.
Respond to direct mail invitations to obtain further information about planned giving publications
and seminars.
Additionally, hospitals, colleges, large social service agencies such as the Salvation Army,
and religi ous societies often have planned giving materials available upon request that can guide
you in preparing your own promotional material. Finally, the books listed in the Additional
Resources section at the end of this chapter provide excellent, in-depth information.
A few words of caution: You are dealing in legal matters, intricate gifts, and large sums of
money. If you choose to prepare your own materials, seek the counsel of a tax lawyer and a
financial advisor, such as an accountant.
Step 2. Solicit Your Board Members
Just as the general financi al support of your board sends an important message to your constituents,
so too does the board's participation in your planned giving program. The board's own gifts
demonstrate each member's commitment to the concept, thereby setting an example to others;
such gifts also make board members' solicitations more effective.
Step 3. Market the Program
Marketing your planned giving program will be most effective if it encompasses two thrusts: a
broad outreach to your general constituency, and a more focused effort directed toward a
287Beyond the Simple Cash Contribution: Planned Giving
n'

[\ Planned Parenthood Federation of America

Planned Parenthood distributes six-paneled, color informational brochures on "Giving
Through Your Will," "Charitable Remainder Trusts," and the "Planned Parenthood
Pooled Income Fund." Each is accompanied by a response form . The organization also
periodically publishes an 8Yl-by-ll-inch, four-sided newsletter highlighting individuals
and families who have made planned gifts to them .The newsletter also includes a message
from the organization's president, some factual information, and a response form, Finally,
the newsletter introduces their donors and others to the Heritage Club, which honors individuals
who made a commitment to support the Planned Parenthood Federation of America
through a bequest or other planned gift.
smaller, more targeted group. Creating a "Legacy Society"-a variation on the gift club concept-
givcs structure and visibility to your planned giving program.
Nonprofits should include a notice about their planned giving programs in every piece ofliterature
that reaches their members. You might, for example, begin your campaign by simply using
your newsletter or annual report to outline the ways in which individuals can earmark planned or
deferred gifts to your organization, and invite them to designate your organization in their wills.
For selected individuals, you might consider positioning your organization as a source of
planned giving information. Creating and sending out "tax-update newsletters" and brochures
addressing such topics as the importance of having a will and how to go about estate planning,
for example, may well prompt some of your prospects to explore planned giving. Include a
response card with these mailings so that readers can ask for more information and, in the process,
change their status from suspect to prospect. You might also hold a series of seminars
where planned giving experts discu ss such general topics as planned giving, tax law changes,
wills, and estate planning. If you do, make sure that the seminars are not thinly disguised group
solicitations; people will sense this and attendance is likely to be minimal.
As in a face-to-face solicitation campaign, create a schedule for your planned giving cam paign.
Decide the specific time of the year to announce the program in your newsletter,
annual report, and other promotional materials. Events such as a group's tenth or twenty-fifth
anniversary can serve as ideal occa sions to launch a planned giving effort. Also decide when you
might actually make targeted approaches to prospective participants.
Finally, consider creating a planned giving committee at the board level. Properly constituted,
such a committee can give immediate credibility to your program; additionally, committee
members can identify, cultivate, and solicit prospective donors among their peers and
associates. Members should be expected to make their own planned gifts as a condition of
participation.
288
v
APPROACHING INDIVIDUALS FOR SUPPORT
The Royal Ontario Museum Foundation Planned Giving
and Major Gifts Committee
Here is a description of the composition and activities of the Planned Giving and Maj or
Gifts Committee of the Royal Ontario Mu seum (ROM) Foundation:
The Planned Giving and Maj or Gifts Committee is to be chaired by a
member of the Board of Directors and to be composed of not less than
thre e members. Its membership will not be limited to directors of the
ROM Foundation.
The Planned Giving and Major Gifts Committee will recommend to
the Board of Directors policies to facilitate maj or gift fundraising from
charitable foundations and through planned gifts. The Planned Giving
and Major Gifts Committee will be involved closely in the dev elopment
of recognition vehicles for major gift s.
Activities
• to receive information from the Executive Director to formulate policie
s and strategies in the area of planned giving and major gift fundraising
for recommendation to the Board; to monitor the ROM' s progress
in secur ing m ajor gifts including planned gifts;
• to develop fundraising targ ets and financial objectives for the planned
giving programme and special appea ls to charitable foundations;
• to develop plans for the cultivation of prospecti ve donors:
• to participate in the evaluation of prospecti ve donors to be reserved for
solicitation of major gifts including planned gifts;
• to participate in solicitations of major gifts and planned gifts from individuals
and charitable foundations for the ROM and its affiliates;
• to plan and recommend policies to the Board in regard to comprehensive
campaign efforts for capital and/or endowment purposes.
Step 4. Identify Prospective Donors
The same process of identifying prospects, creating a committee, recruiting solicitors, and
undertaking the personal solic itations descri bed in Chapter 11 (Face- to- Face Solicitation) can be
applied directly to soliciting pl anned gifts.
While your donor records and research will surely identify your best pro spects, some surprises
may come your way. E xamp les abound of ind ividuals and co uples who hav e led outwardly
fru gal lives but astonish the world by willing millions to institutions from resources that
no one knew existed.
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289Beyond the Simple Cash Contribution: Planned Giving
Finally, review your first two inner circles to identify individuals with the financial ability
and potential willingness to purchase life insurance policies naming your organization as the
beneficiary, or to participate in a pooled fund or any other form of deferred giving.
Step 5. Approach Your Prospects for a Planned Gift

Once your organization is ready to launch a planned giving effort, recruit and train your solici­

tors, assign prospects, and follow the same procedures outlined in Chapter 11,

While the mention in a newsletter or the enclosure of a brochure ina general mailing may lead
people to call your office for more information on planned giving. face-to-face contact is usually
vital to persuade donors to sign up.After thanking a caller for making an inquiry, suggest a meeting
(at a place and time convenient to the prospect) so that you can explain planned giving and
answer any questions.
When you meet, remember to impress upon your prospect your capability as the steward of
his or her contribution. To do so, you might mention the name of your legal counselor the bank
that manages your deferred gifts. Additionally, although you want to present the different
options thoroughly, it's important not to present yourself as a donor 's legal or financial counsel.
Suggest that the donor consult a lawyer or accountant if he or she asks such questions as, "Do
you think that a contribution of X dollars is more desirable than Y dollars now for tax purposes?"
or, "Do you think that I should give 100 shares of X Corporation or 150 shares of Y Company?"
Better yet, suggest that you and the donor visit the advisor together. Be careful to avoid implying
that you are an attorney, accountant, or financial planner unless you are certified as such.
Remember that your goal is to present the opportunity and the details of how a planned gift to
your organization might work. Deferred gifts of various kinds have been lost to organizations
when disgruntled relatives accused the organization of "undue influence" over the now deceased
donor.
Step 6. Follow Up the Gift and Continue Cultivation
Acknowledge appropriately the gifts received . In addition to sending the immediate thank-you
note, consider what type of public acknowledgment donors might appreciate (if this has not
already been discussed). Whereas some donors may be gratified to receive some form of public
acknowledgment for their support, such as mention in a newsletter, bulletin, or annual report,
others will wish to remain anonymous. Speak to other groups active in planned giving to learn
how they handle public acknowledgment.
Be sure that donors receive regular updates on your programs, and treat them as specially as
you do your major donors . Even though the benefits of their gifts may not be reaped immediately,
their support is highly significant Those who have designated your organization as the
beneficiary of a will or some other planned gift have clearly indicated that they support your
work in a substantial way, and that your ongoing success is personally important. As a result,
you want to keep the door open for those donors to support you in other ways as well, unless they
indicate that their support is limited to a one-time gift The more frankly you talk to your donors,
the easier it will be to assess the possibility of future gifts. Your donors will probably appreciate
your candor and attention, too.
290 APPROACHING INDIVIDUALS FOR SUPPORT
Profile:
Greenpeace Canada
Like man y non-profit organizations. Greenpeacc Canada had to start small when it first
beg an seeking planned gi Its in 1990. Natasha van Bcntum, the director of major gifts at the
time, was asked to spend just 25 percent of her time promoting bequests, the least complicated
of planned gifts. Th e program, van Bentum says, "was the very first of its kind for an
environmental group in Canada." While a few bequests had come in with no effort by
Greenpeace, the organization had been almost completely dependent on direct mail. It had
not actively tried to get bequ ests or even large cash gifts from its donors, mo st of whom
gave in the $25 range. "No one had any experience with planned giving , so I had complete
liberty in shaping the program," she recall s.
The first thin g van Bentum did was to complete a rou gh draft of a brochure about
bequest s. Then she used it to conduct so me sim ple research. She wrote letters , made telephone
calls, and visited with people to share the brochure and get their reaction to
Greenpeaces plan to promote bequest s. She asked for feedback and conducted interview.
with two groups: some 20 Grecnpeace donors who were giving at a higher-than-average
level, $250 or more per year, and about the same number of estate-planning lawyers who
help people with thei r will s.
"In the early years of a pro gram like this. visits to law yers are ju st as important as visits
to donors," says van Bentum. "If the donor' s own lawyer does not understand char itable
bequests or who we are, it can put a big damper on any effort we make with the donor."
She was relieved to learn that mo st of the donors and lawyers she interviewed thought that
bequests made sen se for Greenpeace.
More important, van Bentum says, the interview s convinced her that the thought process
of people who make a will is similar to that of environmental donors. People who care
about the environment ca re about the future; thcy don't want to leave a mes s for future
generations and they are willing to do something about it, she says. Th e same thing is true
of people who make wills: Th ey carc about what happens after they're gone and they have
taken steps to put their affairs in orde r, so as not to leave a mes s. "After I realized that, " van
Bentum says, '''I didn't have to do any more research. I knew that our donors would be
attrac ted to the idea of making a bequest."
After putting the finishing tou ches on the brochure, whi ch spelled out Greenpeacc's
accomplishments. some basic facts about the benefits of having a will, and how a will ca n
be used to make a gift to help protect the environment, van Bentum was ready to start promoting
bequests. For the first several years, she simply advertised the brochure in the
organization's newsletter, which is mail ed to 160.000 donors three to four times each year.
The ad, which contained a photograph of animals protected by the environmental group,
told donors how to get a frce copy. Donors who requested the brochure co uld fill out a
tear-off page and mail it back to Gre enpeace . That response device allowed the m to
reques t more information about bequests, and to specify wh ether they'd already named
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Beyond the Simple Cash Contribution: Planned Giving 291
Greenp eace in their will or intended to do so. When donors returned the information, van
Benturn followed up accordingly, calling donors to provide more information, for example,
or thanking those whose plans already includ ed a bequest to Greenpeace.
Even those modest efforts paid off, says van Bentum. Betwe en 1990 and 1994, she
says, the organization saw a lOll-percent increase in the number of bequests it received.
Gradually, van Bentum began to do more. Two years ago, she abandoned major gifts to
work full time on bequests. She created a new brochure, a more educational pamphlet
designed to enable people to write a will. "Seven out of 10 Canadians do not have a will,"
she says . "The numb er one challenge in planned giving is peopl e not facing the issue of
making a will."
Instead of ju st advertising the pamphlet in the newsletter. van Bentum has now mailed
it to 15,000 Greenpeace donors in three groups: those who give $250 or more annually,
donors who make monthly gifts to the organi zation, and those who give less frequently in
response to direct-m ail appeals. Along with the pamphl et, those donors got a low-key letter
fro m van Bentum and were asked to fill out a short questionnaire, similar to the tear-off
page in the first brochure. Those mailings have generated a response from 4 percent of the
recipients; van Bentum is now busy working with that set of donors to increase bequests to
Greenpeace.
To that end, she has also continued her meetings with both lawyers and donors in Vancouver,
where Greenpeace is based, to make them aware of the bequest program . And she
travels two or three times each year to other Canadian cities; the trips last a week to 10
days.
During the trips, van Bentu m sometimes invites lawyers and donors to previously
scheduled Greenpeace events, such as "Ship Visits" in which supporters are invited
aboard one of the organization's two ships. There they are treated to refreshments and a
presentation about how the ships further Greenpeaces efforts to monitor environme ntal
threats like toxic dumping in ocea n waters,off-shore nuclear testin g, and illegal whaling.
Van Bentum's efforts have paid offhandsomcly. Betwe en 1984, when Grcenpeace first
began keeping records on bequests, and 1992, bequest income totaled $365,000. That 's an
average of $45,000 per year. But from 1993 to 1998, bequests grew to an average of
$525,000 annually and totaled $3,135,000.
To take the bequest program even further, van Bentum added a section on bequests to
the Greenpeace Web site (www.greenpeace.org), which enables people to request the two
brochure s while they are on-line.The page on wills contains a humorous message: "When
you come back as a whale," it says, "yo u' ll be glad you put Greenpeace in your will."
About 75,000 people have visited the page in its first two years of existence, and van
Bentum gets about five or six on-line requests for the materials on wills each week.
Van Bentum says that she hopes to soon be able to seek other types of planned gifts for
Greenpeace. She says she will pursue them in the following order, according to their
increasing complexity: gifts of life insurance, outright gifts of appreciated stock, annuities,
and then charitable remainder trusts. Despite her bequest program's steady growth
292 APPROACHING INDIVIDUALS FOR SUPPORT
and impressive returns, however, van Bentum says that there have been several challenges
along the way . Perhaps the biggest, she says, is an expectation by the board of directors
that a certain amount of bequest income will come in during any giv en year. In reality, she
notes, bequest income is highly unpredictable in its first seven years or so, and can t1uctuate
dramatically from one year to the next.
"It is important to caution one's board when large bequests come in, so they do not
become conditioned to this," say s van Bentum. "I now have a situation where my board is
used to seeing unusually large gifts once every 18 months. Now they 're sitting back and
waiting for the next one. But you can't bank on it, and you should never base the budget on
it."
- Holly Hall
Planned Giving Forever
Mentioned earlier, planned giving serves donors by enabling them to extend their charitable support
beyond their lifetimes; for an organization, it ensures a future sou rce of inco me during its
own mature years . The benefits can be subs tantial for both donors and nonprofits.
Tips
• Many people feel that planned giving is mysterious, or only fo r wealthy people,
o~:slightly distasteful to discuss. However, everyone is go ing to die and most
people will leave assets to someone. Wh ile some planned giving strategies for
wealthy indi vidu als are complicated and best left to professionals, everyone can
understand the concept of co ntributing assets for charitable purposes; this is the
basis of planned giving.
• Start your planned giving initiative with a bequest program. Tell people how to
lea ve your organization money in their wills. This is sim ple and easy, and the
results may surprise you.
• Before you begin a planned giving program, think about whether your group
needs to exist in perpetuity and what kind of endowment or reserv e fund you
want to set up for gifts you receive. Otherwise, you may be tempted to spend
gifts from a bequ est on your annu al need s. Because bequests are one-time gifts ,
this is unwise.
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293Beyond the Simple Cash Contribution: Planned Giving
summary Worksheet
for _-- -- - - -- - - - - - -- - - -- - - - -­
(name of your organiza tion)
Approaching Individuals for Support: Bequests, Life Insurance
Premiums, and Other Forms of Planned Giving
Building on Efforts to Date
1. Have you received any bequ ests or other plann ed gifts in the past?
_ _ yes no
2. If Yes, from whom ?
) ­
3.	 What characteristics do these individuals share :
Comments:
4. What is your sense of what they valued in your organ ization's work?
Comments:
Assessing your Organization's Planned Giving Readiness Checklist
YES NO
1. Is your organiza tion five years old or more?
2. Is your organization financially sound?
3. Do you expec t your organization to exist and be operating thirty

years from now?

4. Does your organization have a strong constituency that can be

readily identified?

5. Does that constituency have property or discretionary income?
- - APPROACHING
INDIVIDUALS FOR SUPPORT294
6. Will your board of directors support a planned giving effort?
7. Will your organization allot staff and professional time for a

planned giving effort?

8. Will your organization allot the finan cial resources needed for

publications, materials, travel, training, etc. ?

9. Is your staff committed to planned giving?
Finding Assistance and Counsel
Name several individuals who might advise you on how to launch a planned givin g campaign
effectively:
a. __'----- _
b. _
c. _
Rating Your Planned Giving Potential
On the basis of what you have learned, how would you rank your chances of securing bequests.
life insurance premiums, and other planned gifts?
_ Very Good _ Pos sible _ Unlikely _ Still Unknown
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295Beyond the Simple Cash Contribution: Planned Giving
Additional Resources
publications
Barrett, Richard D., and Molly E. Ware. Planned Giving Essentials: A Step by Step Guide to
Success. Frederick, MD: Aspen Publishers (Aspen 's Fund Raising Series for the 21st
entury), 1997, xiii, 166 p.
Divided into two parts. The first part introduces basic planned giving princ iples and
practices, and the second part provide s a guide to implementing a planned giving program.
Includes glossary, bibliographic references, and index.
n
Behan, Donald F. "Planned Giving with Gift Annuities." Nonprofit World 14
(March- April 1996): 11-15.
Describes what gift annuities are, what types exist, and their benefits and risks.
Billitteri, Thomas J. "All in the Family." Chronicle ofPhilanthropy 11 (15 July 1999) 33-35.
The Internal Revenue Service has established an internal task force to investigate
"charitable family limited partnerships," a tax-avoidance strategy that uses charities as
s, partners in business ventures. It is estimated that hundreds of wealth y individuals are
currently taking advantage of the "char-flip," as the strategy is known. Industry insiders
estimate that at least $3 billion worth of such transactions have been completed in the past
two years. The strategy, which was first prom oted by a Dallas tax consulting firm in early
1997 and is now being pushed by a number of financial planning firms, allows donors to
take a tax deduction for contributing a sizable portion of their family business or other
assets, such as real estate, to charity while maintaining complete control over those assets.
Blum, Debra E. "Looking To Get Out of the Pool." Chronicle ofPhilanthropy 12
(24 February 2000): 31-32.
Discusses the drop in popularity of pooled-income funds as a planned giving option, and
the way that many nonprofit organizations are attempting to reorganize or close them.
Canter, MacKenzie, Ill. "Charitable Contributions of Real Estate." Philanthropy Monthly 32
(July-August 1999): 5-21.
Discusses sources of real estate gifts; tax and non-tax risks and risk reduction strategies;
and donation formats, including charitable remainder trusts. In addition, includes a
discussion of the "TFR Technique." T.FR is the acronym for Thornburg Foundation Realty,
Inc. (previously known as American Foundation Realty, Inc.), an "all equity" real estate
investment trust. The TFR Technique was developed by Garret Thornburg and John Grab,
and is intended to solve many of the problems associated with real estate giving that are
experien ced by donors and charities. Sidebars provid e illustrative examples of ways to
fund charitable remainder trusts, and the benefits of the TFR Technique. Al so included is a
copy of a letter from the Internal Revenue Service to Thornburg Foundation Realty, Inc.
providing rulings concerning transactions involving charitable trusts.
.'
296 APPROACHING INDIVID UALS FOR SUPPORT
Caswell , G.M. "A Life and Death Issue." Fund Raising Management 26 (February 1996):
28-29.
Discusses mortality and the role it plays in assistin g donors with planned or testamentary
gifts.
Chouinard, Carole. "Comparison of the Tax Treatment of Charitable Rema inder Trusts in
Canada and the United States." Philanthropist/Le Philanthrope 14 (September 1998): 3-16.
Article compares the Canadian model to the American model in term s of tax rules and
consequences, costs, and other issues.
Clough, Leon ard G., David G. Clough, Ellen G. Estes, and Ednalou C. Ballard. Practical
Guide to Planned Giving, 1998. Detroit: The Taft Group, 1997, xxvi, 930 p.
Provides marketing and technical information to help development officers establish
perm anent planned giving programs. The book is divided into five main secti ons. The first
section contains operational definitions of major form s of planned giving programs, a
step-by-step guide to prep aring and setting up a planned giving prog ram , and advice on
marketing the program. The second section deals with managing and evaluating the
program. The third section expl ains federal tax aspects of planned giving , including
considerations invol ved with donating different kinds of assets to charitable organizations.
The fourth secti on describes the roles of the gift planning team: the financial planne r, the
insurance profession al, the attorney, and the accountant. The fifth section pro vides a
glossary, sample form s, resource lists, a summary of charitable gift annuity state
regulations, codes of ethics, maximum gift rate s, sample disclo sure statements, and IRS
forms and publications.
Connell, James E. "Funding Gift Annuities with Real Estate." Planned Giving Today
(July 1997): 1,7-9.
Copilevitz, Errol. "Potential Dilemma of Contingent Gifts." Fund Raising Management 26
(February 1996): 34-38.
Advises fundraisers how to deal with donor-imposed restricti ons.
Coppes, Michael L. "A Big Plan for Sm all-Office Planned Giving." Currents 25
(March 1999): 41-47.
Fifteen steps to a successful planned giving program.
Englebrecht, Ted D., and Mon ica E. Selmonosky. "Contingent Bequests and Estate Tax
Charitable Deductions." Trusts & Estates 136 (September 1997): 40,42-47.
Exami nes tax planning strategie s that will ensure the tax deductibility of contingent
bequests.
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297Beyond the Simple Cash Contribution: Planned Giving
Fuerst, Rita A. "Dilemma of Contingent Gifts." New Directions for Philanthropic
Fundraising 13 (Fall 1996): 73-84.
Defines the Internal Revenue Service's qualifications of gifts, then addresses the issue of
donor-imposed restrictions, and how these restrictions must be consistent with the intent to
make the gift.
Giese, James O. "Tax Issues Regarding Planned Giving and Recent Legislative
Developments." New Directions for Philanthropic Fundraising 14 (Winter 1996): 47-62.
Offers an overview of IRS regulations conceming philanthropy and the nonprofit sector.
Grant Thomton, LLP. Planned Giving: A Board Member's Perspective. Washington, DC:
National Center for Nonprofit Boards, 1999.27 p.
Greene, Karen L. "Hidden Treasures: Three Varied Examples of How the Right Planned
Giving Setting Can Turn Rough Prospects into True Gems." Currents 22 (October 1996):
40-43 .
Describes three different planned giving approaches: charitable award programs (CAPs),
employee stock ownership programs (ESOPs), and deferred gift annuities.
Gregg, Keith E. Do Well by Doing Good: The Complete Guide to Charitable Remainder
Trusts. Chicago: Bonus Books, 1996.
Chapters cover different types and popular uses of charitable remainder trusts, and explain
how to set them up and market them.
GUlbrandsen, James S., and Dan B. Roberts. "CRATS, CRUTS and NIMCRUTS:
Philanthropy or Prosperity?" Trusts & Estates 135 (June 1996): 53-57. _
Explains that properly structured charitable plans not only provide significant benefits to
Charity, but also financially reward the donor. Particular focus is given to the relationship
between tax issues, trust accounting rules, and investment strategies.
Hall, Holly. "Forging Ties to the Money Pros ." Chronicle ofPhilanthropy 9 (7 August 1997):
1, 12, 14.
To offset government cuts and to tap into the $10 trillion that baby boomers are expected
to inherit, charities are experimenting with various means of enabling financial
professionals to actively encourage their clients to consider philanthropy. Whereas some
charities have already achieved impressive results using such techniques, among the many
barriers to their widespread use are: the reluctance of most financial professionals to brine
b
up the issue for fear of losing business, their lack of proficiency in the complexities of
planned giving, and their discomfort in discussing value-laden matters with their clients.
298 APPROACHING INDIVIDUALS FOR SUPPORT
Hall, Holly. "Rich Donors Cite Displeasure with Financial Advisers." Chronicle of
Philanthropy 9 (7 August 1997): 12.
A poll conducted for the Chronicle has revealed that a majority of donors are dissatisfied
with the help received from financial advisers or charity officers. As a consequence, only 1
to 2 percent of dissatisfied donors expect to make further planned gifts or to recorrunend
planned giving to others. This displeasure appears to be due to an inadequate level of
preparation on the part of charity officers and financial planners, most of whom failed a
quiz designed to test their expertise in the planned giving field.
Hall, Holly. ''Turning Baby Boomers into Big Givers." Chronicle of Philanthropy 8
(16 May 1996): 25-27.
Charities are experimenting with a variety of new approaches to attract planned gifts from
young and middle-aged donors. Methods described include adjusting the pitch for young
donors, developing appeals to unmarried couples, seeking gifts by telephone, and asking
donors to return income from planned gifts.
Hartsook, Robert F. "Gifts that Go Out of the Box." Fund Raising Management 28 (April
1997): 16-17.
Suggests offering every gift option to a prospective donor of $100,000 or more.
Hartsook, Robert F. "Nurturing Deferred Gifts: Shaping Your Donor's Vision." FRJ Monthly
Portfolio 38 (February 1999): 1-2.
Recorrunends seven steps to take to acquire deferred gifts.
Heise, Suzanne. "Act Now. Give Forever." Fund Raising Management 30 (March 2000):
24-25,42.
Describes Leave a Legacy, a corrununity awareness program that encourages people to
include nonprofits in their wills. Established in Connecticut, nearly 500 nonprofits in the
state participated in the public awareness campaign.
Hixson, Anne. "Tapping a Rich Resource." Fund Raising Management 30 (November 1999):
20-23.
Profiles the Institute for Family Wealth Counseling, an organization of financial
counseling professionals that provides advising services on estate planning to wealthy
clients.
Jackman, Lee. "Charitable Organizations Have a Moral Obligation to Wealthy Donors Who
Leave Them Their Entire Estate." Fund Raising Management, 30 (February 2000): 32-33.
Expresses the opinion that if a wealthy donor arranges to leave their entire estate to a
nonprofit organization, then the organization is obligated to establish and maintain a strong
bond with the donor and make sure that they are well cared for during the rest of their life,
and ensure that the donor's wishes for the use of his or her gift are honored.
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Beyond the Simple Cash Contribution: Plann ed Giving 299
Jensen, John W. "A Check List: Audit Your Planned Giving Program. " NonProfit Times 11
(October 1997): 46-47.
Jensen, John W. "When There' s a Will: What To Do When a Bequest Comes In.'' Nonl'rofit
Times 12 (March 1998): 39, 40, 46.
Jordan, Ronald R. "Expertise on Call." Currents 22 (March 1996): 14, 16, 18.
Emphasizes the importance of having a committee of allied professionals as a vital link to
donors and a resource for a planned giving program.
Jordan, Ronald R., Katelyn L. Quynn, and Carolyn M. Osteen. Planned Giving: Management,
Marketin g, and Law. New York: John Wiley & Sons, 1995. xx, 372 p.
Divided into six parts: building a development program, marketing planned giving,
planned giving assets, deferred gifts, related disciplines, and planned giving in context.
Accompanied by a computer disk with documents for use when creating and administering
a planned giving program.
Kabaker, Thomas. "The Shape of Gifts to Come." Advancing Philanthropy 4 (Fall 1996):
24-27.
Gives a brief overview of planned giving: finding prospects, structuring gifts, and
advantages for donors and recipient organizations.
Kling, Paul F. "A Sea Change in Planned Giving." Advancing Philanthropy 6 (Fall- Winter
1998): 14-1 9. ,
Author asserts that today's donors are more inclined to support local grassroots nonprofits
than more established organizations, to seek more control over the uses of their gifts, and
demand greater accountability.
Lewis, Nicole. "Gaining Donors' Trusts: Charities Step Up Their Efforts To Attract Sizable
Planned Gifts." Chronicle ofPhilanthropy 12 (21 September 2000): 31- 33.
Article describes efforts by charities to increase planned gifts to their institutions.
Strategies include using direct mail, offering planned giving seminars, advertising in
national publications, and hiring a full-time staff member to promote planned gifts.
Additional strategies include making information about planned giving available on the
Internet and educating young adults about planned gifts.
Mann, Barlow T. "Are Your Donors in the Market for Planned Gifts?" Fund Raising
Management 26 (February 1996): 30-33.
Argues that today's economic environment provides powerful incentives for donors to plan
their current and deferred gifts.
300 APPROACHING INDIVIDUALS FOR SUPPORT
McAllister, Pamela. The Charity 's Guide to Charitable Contributions. Seattle: Conlee-Gibbs
Publishing, 1998. vii, 138 p.
Focuses on common situations that most fundra isers encounter, and answers questions that
may be asked by potenti al donors. Several chapters explain IRS rules; addition al chapters
deal with particular types of contributions and fundraising meth ods; one chapter is devoted
to planned giving; the final chapter discusses state laws. Appendices include reprints of
IRS Publication 526 (Charitable Contributions); Publ ication 561 (Determining the Value
of Donated Property); FOIm8283 (Noncash Charitable Contributions); and Form 8282
(Donee Information Return). Indexed.
McCoy, Jerry J. "Charitable Remainder Trust Regs Present Planning Opportunities." Trusts &
Estates 138 (March 1999): 16, 18,20,22,24,26, 28.
Geared toward estate planners, article reviews the new charitable remainder trust
regulations item by item, and then examines the plannin g implications of the regulations.
Moerschbaecher, Lynda S. Start at Square One: Starting and Managing the Planned Gift
Program. Chicago: Precept Press, 1998. xiv, 223 p.
Moran, William J. "Raising Planned Gifts Through a Campaign Framework: It Works But Be
Careful." Fund Raising Management 29 (May 1998): 23-25.
National Conference on Planned Giving. All That Jazz: Tenth Anniversary National
Confe rence on Planned Giving Proceedings. Indianapolis: National Committee on Planned
Giving, 1997.
Proceedings, including thirty-eight audio cassettes, of the conference that took place

September 21- 24, 1997.

Nicklin, Julie L. "Tact, Strategy, and Delayed Gratification Fill the Days of a Planned Giving
Officer: His Delic ate Job Is To Seek Gifts That His College Will Receive After the Donors
Demise." Chronicle of Higher Education 43 (10 January 1997): A45-46.
Describes a typical day in the life of Paul F. Kling, director of planned giving at the

University of Richmond.

Peebles, Jane . The Handbook of International Philanthropy: Policies and Procedures for
Planned Giving Beyond Our Borders. Chicago: Bonu s Books, 1998. x, 125 p.
A guide to the current IRS tax regulations on charitable giving by individuals to foreign
charities, or to U.S. charities for use in other countries . Presents taxation issues for
residents and nonresident aliens.
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Beyond the Simple Cash Contribution: Planned Giving 301
Polisher, Edward N., and Teresa M. Peeler. "A Collector's Guide to Art, Taxes and Charitable
Deductions." Trusts & Estates 136 (September 1997): 26,28, 30, 32-34, 36, 38.
The federal government encourages the advancement of the arts by providing deductions
from the income, estate, and gift taxes of philanthropists who donate works of art from
their collections to charitable organizations. Discusses various estate planning solutions.
Prince, Russ Alan, Gary L. Rathbun, and Chris E. Steiner. The Charitable Giving Handbook.
Cincinnati: The National Underwriter Company, 1997. ix, 310 p.
Analyzes the charitable impulse, outlines the estate planning process, discusses what
donors look for in a charitable adviser, and describes the various types of charitable gifts.
Reis, George R. "Building Bridges." Fund Raising Management 30 (August 1999): 19-23.
Profiles the Planned Giving Design Center, which uses the Internet to assist charities in
establishing and cultivating relationships with professional advisors in their communities,
and ensuring that advisors have access to gift planning information.
Ryan, Ellen. "Shades of Gray." Currents 26 (February 2000) : 36-40.
Interview with Charles Collier, senior philanthropic adviser at Harvard University; Pamela
Davidson, head of Davidson Gift Design and president of the National Committee on
Planned Giving; and Doug White, president of the Boston-based Web site Charities Today,
and author of "The Art of Planned Giving." The discussion includes planned giving issues
such as: charitable intent, donor control, professional behavior, certification and incentive
pay for planned giving officers, and collaboration with financial planners.
Scluneling, David G. "The 'Why' of Planned Giving." Grassroots Fundraising Journal 17
(December 1998): 3-5.
Part I in a series on the topic of planned giving. The author begins by defining the
meaning of planned giving, and the skills necessary for a planned giving fundraiser.
Schmeling, David G. "Marketing Planned Giving." Grassroots Fundraising Joumal18
(February 1999): 7-8.
Part 2 in a series on the topic of planned giving. Explores the first steps in determining an
organization's planned giving rationale and how to market it.
Schmeling, David G. "Budgeting for Planned Giving." Grassroots Fundraising Journal 18
(June 1999): 7-9.
Part 3 in a series on the topic of planned giving. Discusses key items to consider in
preparing a planned giving budget. Includes a planned giving resource list.
Schmeling; David G. Planned Giving: For the One Person Development Office. 2nd ed.
Wheaton, lL: Deferred Giving Services, 1998.217 looseleaf pages .
This manual provides practical advice on establishing a donor-sensitive and
market-oriented planned giving program. Schmeling begins with eight steps to take in
s
302 APPROACHING lNDIVIDUALS FOR SUPPORT
laying the foundation for such a program: (1) making the decision (includes a
self-assessment checklist); (2) adopting a market plan (with a discussion of the four basic
markets for a planned giving program); (3) recruiting a key board member; (4) compiling
the mailing list; (5) preparing the budget (includes a sample); (6) presenting planned giving
to the board of directors (includes a worksheet for assessing the organization's readiness
for a planned giving program); (7) integrating planned giving into the overall development
program; (8) and marketing the program. The following chapters cover quarterly and
organizational newsletters, direct mail appeals, tax-update newsletters, a
memorial/recognition program, basic follow-up procedures, a planned giving advisory
committee, financial and estate planning seminars, endowment funds, the integration of
planned giving with corporate solicitations and capital campaigns, ways to handle noncash
gifts, various gifting arrangements (describing main characteristics, target market, and
marketing strategy), policy and procedure guidelines, and substantiation. Includes sample
forms and checklists and a bibliography.
Schneiter, Paul H., ed. PracticaLGuide to PLannedGiving , 2000. Farmington Hills, MI: The
Taft Group, 1999. xxiii, 997 p.
Provides marketing and technical information to help development officers establish
permanent planned giving programs. The book is divided into five main sections; the first
section contains operational definitions of major forms of planned giving programs, a
step-by-step guide to preparing and setting up a planned giving program, and how to
market the program. The second section deals with managing and evaluating the program.
The third section explains federal tax aspects of planned giving, including considerations
involved with donating different kinds of assets to charitable organizations. The fourth
section describes the roles of the gift planning team: the financial planner, insurance
professional, the attorney, and the accountant. The fifth section provides a glossary, sample
. forms, resource lists, summary of charitable gift annuity state regulations, codes of ethics,
maximum gift rates, sample disclosure statements, and IRS forms and publications.
Schoenhals, G. Roger, ed. Getting Going in PLanned Giving: Launch. Your Program with
Powerful Ideas from the Pages of "PLanned Giving Today." Seattle: Planned Giving Today,
1997.60 p.
Schoenhals, G. Roger, ed. First Steps in PLanned Giving: Practical Ideas from the Pages of
"PLanned Giving Today." Edmonds, \VA: Planned Giving Today, 1999.60 p.
Sciscoe, Lisa Stone, and Dan L. O'Kom. "Planned Gifts: Deferred Enjoyment."
New Directions for PhiLanthropic Fundraising 13 (Fall 1996): 59-72.
Depending on the type of planned gift used, contributors of planned gifts may not receive
immediate tax deductions, which are often deferred due to state and federal tax regulations .
303Beyond the Simple Cash Contribution: Planned Giving
Sharpe, Robert F., Sr. Planned Giving Simplified: The Gift, the Giver, and the Gift Planner.
New York: John Wiley & Sons, 1999. xxx, 210 p.
Divided into major sections: "The Planned Gift" describes the types of planned gift
instruments available to today's donors, types of property that may be donated, deferred
gifts, and other options, such as giving-for-income plans (charitable remainder un.itrusts,
It	 annuity trusts, for example). "The Planned Giver" describes "typical" donors, motivations
for giving, and fears of prospective planned givers. "The Gift Planner" details the types of
individual gift planners as well as corporate entities that provide similar services, and
describes how each operates. Concluding chapters deal with the roles of the nonprofit
agency's board of trustees and the chief executive officer in building an effective planned
giving program. Includes glossary and index.
Shenkman, Martin M. The Complete Book ofTrusts . 2nd ed. New York: John Wiley & Sons,
1998. xxii, 409 p.
Explains what a trust is, lists and describes the numerous types of trusts, explains tax

consequences, and provides sample forms .

Sinclair, Matthew. "Planned Giving: Starting a Program from Scratch ." Nonl'rofit Times 12
(August 1998): 39,40.
Strapp, Nancy Herrold. "The Psychology of Irrevocable Gifts." New Directions for
Philanthropic Fundraising 14 (Winter 1996): 37--46.
Presents an analysis of psychological factors that donors may encounter when
contemplating an irrevocable charitable gift. Gives strategies gift planners can use to assist
donors in coming to resolution.
Taylor, Robert R. ''Transitional Development: Repositioning for Major and Planned Gifts."
New Directions for Philanthropic Fundraising 14 (Winter 1996): 19-35.
Discusses repositioning a nonprofit from a basic fundraising operation to a major gift
enterprise through a large investment of resources, planning, patience, and hard work.
Teitell, Conrad. "Charitable Remainder Trusts-Final Regulations." Trusts & Estates 138
(August 1999): 36--47,
Teitell, Conrad. "IRS Keeps Things Interesting for Charitable Givers." Trusts & Estates 136
(February 1997): 65-66.
Summarizes recent regulatory developments that address gifts of publicly traded stock and
deductions for bequests to religious charities.
Teitell, Conrad. Portable Planned Giving Manual. 6th ed. Old Greenwich, CT: Taxwise
GiVing, 1998. xxvi, 735 p.
Describes deductibility of gifts, valuation of gifts, substantiating charitable deductions, will
and estate plann.ing basics, charitable remainder trusts, and other planned giving options.
304 APPROACHING INDIVIDUALS FOR SUPPORT
Thomas, Susan Decker. "Do You Hear What I Hear?: Prospects Will Indicate When They're
Open to the Idea of Planned Gifts. Here's How To Recognize Their Cues and Respond
Appropriately." Currents 14 (March 1998): 36--40.
Thompson, Todd S. "Attract Major Gifts with a CRT. " Nonprofit World 18
(January-February 2000): 9-12.
Discusses how charitable remainder trusts work and explains the two types of charitable
remainder trusts: annuity trusts and unitrusts. An explanation of how an in-evocable life
insurance trust works and the benefits of a charitable remainder trust with an irrevocable
life insurance trust is also provided. In addition, describes the type of donors for which
CRTs work best.
Treacy, Gerald B. Jr. "So Much Better?" Currents 26 (February 2000): 43-46.
Discusses the emergence of the supporting organization as a trend in planned giving.
Includes a discussion of the origins of the supporting organization as a legal entity,
organizational structures for supporting organizations, and benefits to donors and
campuses of supporting organi zations.
Weber, Gerald A, Thomas A Korman, Steven C. Gust afson , and John R. Silverman,
"Preserving Family Assets: The Use of Planned Charitable Giving." New Directions for
Philanthropic Fundraising 14 (Winter 1996): 89- 104.
Suggests using the family attorney as a bridge linking people's personal and philanthropic
interests with a nonprofit institution's mission and servi ces.
I
F
White, Douglas E. The Art ofPlanned Giving: Understanding Donors and the Culture of
Giving. New York: John Wiley & Sons, 1998. xix, 362 p.
Internet Resources
American Philanthropy Review: Model Gift Policy Manual (www .charitychannel.com)
Developed by the American Philanthropy Review, a company that reviews and sells books
on fundraising and nonprofit mana gement, this site provides a sample policy manual for
planned giving programs. The manual outlines deferred giving options, gift acceptance
procedures, and apprai sal and reporting requirements. It also describes the advantages and
disadvantages of different planned giving appro aches, including annuities, unitrusts,
pooled income funds, and charitable gift annuities. Includes a glossary .
National Committee on Planned Giving (www.ncpg.org )
Run by the Committee, an organization for planned giving officers and others who advise
donors on deferred giving, this Web site provides links to sites that provide information on
planned giving.
305Beyond the Simple Cash Contribution: Planned Giving
Planned Giving Design Center (www.pgdc.netl)
Web site created to provide professional advisors and planned giving specialists with
comprehensive research and planning resources.
Planned Giving Today (Newsletter; www.pgtoday.com)
A monthly newsletter serving the planned giving community as a practical resource for
education, information, and professional linkage.
Electronic Mailing Lists
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