The Role of the Board in Building a Successful Endowment and Planned Giving Program Kathryn W. Miree & Associates, I - PowerPoint PPT Presentation

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The Role of the Board in Building a Successful Endowment and Planned Giving Program Kathryn W. Miree & Associates, I

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  1. The Role of the Board in Building a Successful Endowment and Planned Giving ProgramKathryn W. Miree & Associates, Inc. North Carolina Planned Giving Council Gift Planning in a Fluid Environment

  2. What We’ll Cover • The environment for donors • The opportunity for deferred gifts • What we know about donors • The role of gift planning • The magic of gift planning in campaign • The best prospects • The role of the Board

  3. The Board’s Fiduciary Role

  4. An Overview • The board of directors/trustees is not simply a group of random volunteers • They are charged by law with responsibility for running the nonprofit • For that reason, they are essential to the success of building endowment, building a strong planned giving program, and charting the future of the organization

  5. The Board’s Fiduciary Role • Determine the organization’s mission and purpose • Select the chief executive • Support the chief executive and assess his or her performance • Ensure effective organizational planning • Ensure adequate resources

  6. The Board’s Fiduciary Role • Manage resources effectively • Determine, monitor, and strengthen the organization’s programs and services • Enhance and ensure the organization’s public image • Recruit and orient new board members • Assess its own performance

  7. Seven Things Every Board Member Should Know About Endowment and Planned Giving

  8. Gift Planning is Important in the Current Environment • What is gift planning? The process of planning each gift effectively. • Clearly articulating the goals (purpose, outcomes) • Identifying the donor’s personal goals • Selecting the best gift form • Selecting the best timing • Selecting the best asset

  9. A Simple Example: Long-Term Appreciated Stock

  10. The Environment for Donors: Investment Markets

  11. The Environment for Donors: Investment Markets

  12. The Environment for Donors: Investment Markets

  13. The Investment Markets • In this environment, “safe” assets performed poorly • Financial services firms faltered or failed • Real estate investments - residential and commercial - decreased dramatically in many markets

  14. The Madoff Chill • In addition to the usual peril in the investment markets, there’s a human element • Madoff hit a high bar with a fraud valued at $50 billion • There were other investment managers involved in fraud across the country

  15. Other Factors Impacting a Donor’s Ability to Give • The uncertainty of the federal tax rates • Retirement needs • The need to take care of parents • Children in preparatory school, college, graduate school • Loss of a job • Active involvement with another charity • Financial crisis • Medical crisis

  16. There Is a Great Opportunity In Deferred Gifts

  17. Charitable Giving Potential:Giving USA 2011 Corporations $15.29 Foundations $41 Individuals $227.41 Bequests $22.83 Total: $280.89 Billion

  18. Recipients of Charitable Gifts

  19. IRS Statistics of Income

  20. Boston College Social Welfare Institute - Transfer of Wealth • Estimate of the transfer of wealth from 1998 - 2052 • Transfer of assets from one generation to the next: $41 trillion to $136 trillion • Transfer of assets to charity: $6 trillion to $25 trillion 20

  21. The Opportunity Gap • Independent Sector estimates 89% of all families give to charity each year • Yet the national estimate on the number of donors who have included charity in their wills is 8% - 10% • The gap is the opportunity. 21

  22. Research Shows Us Donors Are Receptive to the Ask

  23. Bank of America High Net Worth Study • 2006 study focusing on high net worth donors • Incomes more than $200,000, assets exceeding $1 million • Group represents 3.1% of all U. S. households, 2/3’s of U.S. philanthropy • 98% of all high net worth households give to charity

  24. Bank of America High Net Worth Study - Donor Motivation

  25. Bank of America High Net Worth Study - Donor Incentive

  26. Bank of America High Net Worth Study - Types of Gifts Made

  27. The 2008 High Net Worth Update • The top three reasons donors stopped giving: • “no longer feel connected” • decided to support another charity • solicited too often • The desire to “give back to the community” was the primary motivation for giving (public recognition of less interest)

  28. The 2008 High Net Worth Update • The gifts they make have a great impact on them personally • Setting an example for children is an important motivation • Donors expect transparency, accountability, and protection of privacy

  29. Center on Philanthropy Bequest Study: Bequests in Place

  30. Center on Philanthropy Bequest Study: Would Consider Bequest

  31. Center on Philanthropy Bequest Study: Potential by Income

  32. Conversations About Long-term Gifts and Endowment Build Stronger Donors

  33. The Fundraising Pyramid Donor Commitment Nonprofit Contact PLANNED GIVING Transformational MAJOR GIVING Transactional/Transformational ANNUAL GIVING (includes membership) Transactional

  34. Moving Donors Up the Pyramid • Donor commitment and donor engagement move the donor up the pyramid • They are engaged by a staff member, board member, or volunteer • They get excited about a charitable goal • They have a great experience at Gonzaga 34

  35. Building Long-Term Commitment • Public television station received $30/year for more than 20 years - and received an estate gift of $250,000. • A donor to the Arthritis Foundation made gifts of between $25 and $75/year - and received an estate gift of $150,000. • A direct mail charity that received average gifts of $80 had an estate gift average of $32,000 • There are many reasons donors don’t give more during life. They often make the largest gift of their life at death.

  36. Building Long-Term Commitment • There are many reasons donors don’t give more during life. They often make the largest gift of their life at death.

  37. The Range of Gift Options Allows Donors to Create a Gift that Fits Their Circumstances

  38. Current Gifts of Non-Cash Assets • Publicly traded securities • Privately held securities • Real estate • Life insurance • Oil and gas interests • Intellectual property • Tangible personal property

  39. Gifts that Pay Income • Charitable gift annuities • Charitable remainder trusts

  40. Gifts Deferred Until Death • Bequests • Bequest substitutes • Beneficiary designation of IRA or qualified retirement plan • Beneficiary designation of insurance policy • Pay on death accounts

  41. Gift Planning Adds Magic and Depth to Campaigns

  42. Gift Planning’s Greatest Strengths • Gift planning expands donor options • Gift assets • Gift structures • Gift timing • Ability to accommodate personal goals

  43. How it Works: Idea #1 • In a no-estate tax or small-estate tax environment, accelerate charitable gifts • Accelerate a bequest to make a current gift • Accelerate a bequest to create a charitable gift annuity • Give Gonzaga an insurance policy • Turn a gift of real estate at death to a retained life interest gift

  44. How it Works: Idea #2

  45. How it Works: Idea #3Use a Charitable Gift to Fund Retirement (Couple Ages 70,71)

  46. How It Works: Idea #4$100,000 Charitable Gift AnnuityParents Age 78,82

  47. How to Capture the Magic • Build big visions that have big outcomes. • Engage donors in the vision. • Create a way for every donor - at every level - to have a significant role. • Design a comprehensive campaign with current and deferred funding goals. • Ask for blended gifts - part current gift and part deferred gift - in campaign.

  48. The Campaign Options • An outright gift funded with cash or other assets • A multi-year pledge with cash or other assets • An irrevocable gift that pays income to the donor (or others) and terminates to Gonzaga • An irrevocable gift that pays income to Gonzaga and terminates to heirs • A deferred gift at the donor’s death

  49. Counting and Measuring Results • Outright gifts, irrevocable gifts that pay income, and revocable deferred gifts have different values and should be tracked separately. • Donor worry that by expanding choices donors will move to revocable deferred gifts. • Always start with the gift goals and the vision.

  50. With Gift Planning, Everyone is a Prospect!