Case Studies and Articles

How donors should take charge of their priorities

How donors should take charge of their priorities

Getting Your Advisors on Board – Why You Need Marching Orders for the Donor’s Advisors

Good stewardship starts with a clear plan and explicit directions

Despite the self-promoting press releases foundations and corporations generate with their giving programs, in most cases, the individual donor makes the real difference for a charity’s bottom line. According to Giving USA’s 2001 edition, 83.5% of charitable giving is from lifetime gifts and bequests from individuals.

As the population ages, more and more donors are looking for creative ways to arrange charitable gifts, and that brings us to planned giving. Why is that?  Planned gifts generally are made from capital assets, and not income.  Donors including philanthropy in their plans may use stock, land, or business interests very creatively instead of hard to find cash.  Besides helping out a deserving charity, there are tax benefits; the option for added income, and, best of all, donors need not be high-income wage earners to be tax efficient philanthropists.

Bequests and charitable trusts provide the bulk of new endowment funds; and exceptionally generous and motivated supporters make significant contributions possible.  However, no donor lives in a vacuum.  Most have a cadre of one or more professional advisors who provide them with tax, legal and financial advice.

Wise donors give because they are excited about a charity’s capacity to make the world a better place.  However, many early discussions about a proposed gift start with the charity’s fundraising staff rather than the donor’s trusted advisor.  Subsequent meetings with professional advisors, brought in later in the process, may steer the gift discussion off course.  Why does this happen?  Sometimes disinterested or inept advisors lack the technical background to understand the gift planning process, other times it revolves around miscommunication.  For all the good that a well-trained advisor can do for a donor, most of those who fail to follow through with a client’s charitable wishes do so because the client does not clearly and forcefully express his or her desires.  As a result, donors miss opportunities to support charities and projects that have drawn their attention or tugged at their heart.  And, it’s not just the charity that loses out; it is also the donor. Wonderfully creative gift arrangements can provide a sense of accomplishment and meet many of the donor’s goals too.

Commercial advisors often view their roles as one of protection and oversight, and too often do not understand or share their client’s interest in supporting a worthy nonprofit organization.  While various polls have reported that between 66 percent and 80 percent of all planned gifts are motivated by the professional advisors, unfortunately there are too many advisors responsible for derailing an untold number of needed and otherwise thoughtful gifts.

Last Updated: March 6, 2003

Gift & Estate Planning Services © 2003


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