Wednesday, October 15, 2008

Remainderman of the Day


Friends,

Amidst the roller-coaster ride of the stock market, along with great skepticism and uncertainty about the federal government's bailout of Fannie Mae, Freddie Mac, banks, homeowners--you name it--philanthropy seems to be holding its own for the time being. On the MajorGiving.com listserv this past week we've been discussing the fact that many nonprofits are leaving money on the table by not having in place at least a rudimentary planned giving program in place.

I find this not only shocking, but reckless.

In a recent posting on the Planned Giving Design Center website, Robert F. Sharpe, Jr. discusses the economic impact on giving and advises us that right now donors--particularly older people--might be looking for gifts that provide income to themselves or to loved ones in the present or near future (charitable remainder trusts, charitable gift annuities) or that provide future income benefits and security to a loved one (charitable lead trusts, charitable remainder trusts with wealth replacement). Sharpe further tells us that "all roads now seem to lead to gift plans [that] ... should be structured so as to possess as many of the following attributes as possible:
  • enables a client to make a large gift in relation to his means in a way that addresses a personal financial or economic challenge that would otherwise preclude the gift;
  • provides maximum benefits to the charitable recipient within a reasonable period of time;
  • places no undue investment risk on either the donor or the charitable recipient; and
  • affords the donor with maximum tax savings and other economic benefits.
The not-for-profits and advisors who master the incredible flexibility and power of these planning tools, as well as the tax savings, asset management, predictability and other advantages they bring, will find no shortage of eager donors and clients.
The impulse towards a bunker mentality right now is understandable among nonprofit managers who fear the unknown and are risk-averse (and wary of making a financial investment). And, while it would have been better for most of them to have launched planned giving programs when times were good, it's still not too late. With donors now keeping an ever more watchful eye on how their philanthropic dollars are being spent and on ways for their dollars to have maximum value for both the institutions they support and for their own economic well-being, it seems unconscionable not to roll out or expand your planned giving program now.

Talk to you soon!

Bob