E-Newsletter

Written by Jessica Brookstein, MBA, CAP®

With so much happening in the world and the growing list of responsibilities we all face, I want to take a moment to sincerely thank you for being part of this group. Your involvement means a great deal, especially when time and energy are at a premium. We truly appreciate your commitment.

As we continue to navigate both personal and professional demands, I encourage you to fully explore all the opportunities that come with your PGCGP membership. There is so much to gain, from connecting with like-minded individuals to accessing valuable resources that can help you grow, both personally and professionally. Whether it’s attending events, engaging in discussions, or taking part in educational programs, I want you to get the most out of this experience.

I urge you to dive deeper, discover new opportunities, and take full advantage of all the benefits available to you.

Mark your calendar for the return of the Planned Giving Course scheduled for April 8, 2025 at The American College in King of Prussia. Whether you or your staff are new to planned giving, are looking to refresh your planned giving knowledge or you are looking to build a program at your organization — there will be something for everyone in the day's content. More information is coming in the new year.

With my best wishes for a safe and healthy holiday season and a very happy 2025.

Jessica Brookstein, MBA, CAP®
President, Planned Giving Council of Greater Philadelphia

Written by Viken Mikaelian, CEO of Planned Giving.com 

Forget What You’ve Heard About Planned Giving

Just Do the Math …

Baby Boomers, who are among the wealthiest and most charitable Americans, are dying at a rate of about 6,000 per day. They’re taking around $6 billion in estate dollars with them. (Now, many of you do not know the difference between a million and a billion. Just read on for some staggering numbers.) 

And unless you have a planned giving program, that money is gone forever. Skeptical? Just do the math:

On average, boomers have a net worth of between $970,000 and $1.2 million. They’re responsible for almost half of all charitable giving in the United States. They’ll leave an estimated $11.9 trillion to charities.

And those charities with planned giving programs will receive the greatest share.

Sobering Statistics

The numbers don’t lie: Planned giving works. And we’re not talking about nickels and dimes. We’re talking transformational gifts. Those who understand this are among the most successful; the top 1%.

If we assume the average Boomer has a net worth of $1,000,000 ($1 M), here’s how the math works:

6,000 X $1,000,000 / day = $6,000,000,000.

Struggling with all those zeroes? That’s six billion dollars. (Read below as to what a billion really is.)

Per day.

Yet we consistently hear the same refrain: “Sorry, nothing in the budget for planned giving.”

This leads me to believe that either:

• These nonprofits have an alternative source of funding that’s so plentiful it will soon sustain their mission for generations, but they’re not sharing.
• The folks in charge don’t understand math.

Since there’s no evidence to support No. 1, I’m leaning toward No. 2. As comedian Steven Wright says, “Five out of four people have trouble with fractions.”

What Is a Billion? Really.

Think of it like this: If you had to spend a million dollars at $1,000 a day, you’d run out of money in 3 years. But doing the same with a billion dollars would take 2,740 years for the money to dry up.

A million is one thousand-thousand, or 1,000,000. A billion is a thousand million, or 1,000,000,000.

A typical planned gift is 200 times larger than a donor’s biggest annual gift. With those numbers at stake, ignoring planned giving makes absolutely no sense.

But myths and misconceptions prevail. Fundraisers chase ultra-wealthy unicorns instead of focusing on pragmatic legacy gifts. They search for billionaires and ignore the donor next door.

But do they realize the donor next door is much closer to being a millionaire, than a millionaire is to a billionaire?

Going, Going, Gone

The longer you wait to get serious about planned giving, the more money that’s gone forever. It will go to wiser nonprofits. It will go to heirs who won’t donate it. And a good portion will be lost to avoidable taxes.

But even a basic planned giving program will funnel some of that money into a nonprofit’s coffers. Bequests from middle-class donors frequently exceed $100,000. That means a simple microsite or marketing program could pay for itself multiple times in the course of a year.

Stop waiting for the perfect moment to launch your planned giving program. Stop saying there’s no money in the budget.

Run the numbers, and you’ll find the answers. It’s basic math.

For a full-version of this article, visit PlannedGiving.com.

PS: Even if nonprofits competed for 1% of this money, that’s still a lot of money.

Written by Kathryn H. Crary, Esq., Gadsden Schneider, & Woodward LLP
kcrary@gsw-llp.com

The exponential growth in the popularity of donor advised funds or “DAFs” over the past several decades has led to increased scrutiny from the media, Congress, and most recently the Internal Revenue Service. In November 2023, the IRS published proposed regulations at REG-142338-07 regarding the determination of when excise taxes should be imposed on distributions made by a sponsoring organization from a donor advised fund and on the agreement of certain fund managers to the making of distributions.

DAFs were formally recognized in the Internal Revenue Code (the “Code”) in sections 4966 and 4967, which were added in 2006.  The proposed regulations address with greater specificity these sections’ definitions of a DAF, a donor, a donor-advisor, and a distribution.  While sponsoring organizations generally welcomed the increased clarity provided by these expanded definitions, the IRS received formal comments on the proposed regulations from more than 150 organizations.  The comments were clustered around several main areas of concern:

1.      The proposed regulations expand the definition of donor advised funds by potentially redefining certain types of field-of-interest funds and other collaborative funds as DAFs depending on the level and type of involvement by donors in committees supervising such funds.  Other concerns regarding the definition include the possibility that certain funds that grant scholarships or are only utilized to support a single identified organization may no longer fall into the category of funds that are considered exceptions from DAF categorization.

2.     Reasonable expenses incurred in the ordinary course of a sponsoring organization’s operations in carrying out charitable purposes could possibly be considered taxable distributions under the proposed regulations.

3.      Many sponsoring organizations have historically allowed donors to recommend that the donor’s own personal investment advisors be utilized to manage funds in a DAF.  The proposed regulations would reclassify these investment managers as “donor-advisors” resulting in the imposition of excise taxes under section 4958(c)(2) of the Code when fees are paid to such investment managers.

4.      The proposed regulations call for the changes to be made retroactively, which means that excise taxes might be inadvertently triggered without sufficient opportunity for correction.

In April 2024, a bipartisan group of members of the House Ways and Means Committee wrote to the IRS expressing concern that the proposed regulations could deter or discourage charitable donations, particularly to donor advised funds at community foundations.  The notice and comment period culminated in a two-day formal hearing in May 2024 featuring more than 30 speakers, at the conclusion of which the IRS promised to take into consideration the issues raised in the comments when drafting the final regulations.  It remains to be seen what effect, if any, the new administration may have on this process.

Written by Jessica Brookstein, MBA, CAP®

Now that summer is in our rearview mirror, it is time to look ahead to start to plan out how we are going to take advantage of all of the opportunities around us. Opportunities at work, with friends and colleagues, and with the Planned Giving Council of Greater Philadelphia. Are you taking full advantage of your membership? Are you looking for more ways to engage with the Council? What are you waiting for?

I encourage you to explore ways to get the most from your PGCGP membership: 

• Attend our annual premier educational event, the Planned Giving Day Conference, on October 16^th, 2024, at the Inn at Villanova.
• Save the date for the return of The Planned Giving Course, April 8, 2025, at The American College.
• Volunteer your time and expertise: Get involved with PGCGP committees; strengthen your own professional skills; network with your colleagues.
• Get to know our sponsors and take advantage of the quality services and products they provide to better serve our planned giving community.

Be on the lookout for new and returning educational programs and networking events!

Have a healthy and productive Fall!

Written by Jessica Brookstein, MBA, CAP®

Summer officially starts on June 20, but unofficially most of us kicked off the season celebrating Memorial Day. Time to enjoy the good weather and partake in your favorite activities with family and friends.

Don’t forget to take advantage of your PGCGP membership benefits! How many tools can you fit in your toolbox?

• Join us for the our educational sessions at The Racquet Club in Philadelphia on Thursday, June 20, 2024 and Thursday, September 12, 2024.
• Network on Thursday, July 18, 2024 at The Great American Pub in Conshohocken where we will be convening our first ever sponsor facilitated networking event. Hosted by Fiduciary Trust International. Register Here
• Attend the 2024 Planned Giving Day Conference on Wednesday, October 16, 2024 at the Inn at Villanova in Wayne, PA. Register Here
• Volunteer your time and expertise: Get involved with PGCGP committees; strengthen your own professional skills; network with your colleagues.
• Get to know our sponsors and take advantage of the quality services and products they provide to better serve our planned giving community.

We hope to see you soon and have a fantastic summer!

Beth Harper Briglia, a longtime PGCGP member who currently serves on the 2024 Planned Giving Day Committee, was recently recognized by the National Iron & Steel Heritage Museum as the 18th recipient of its Rebecca Lukens Award. The award recognizes women in Chester County (PA) who exemplify outstanding leadership and vision in the spirit of the award’s namesake, Rebecca Lukens, regarded as the nation’s first female industrialist. PGCGP offers heartfelt congratulations to Beth!

If you would like to share an accolade or achievement of a PGCGP member, please contact info@pgcgp.com.

Perpetuity and Reality

Q: We are a social services agency and have received a bequest that requires us to fund a program – early childhood education – "in perpetuity" (that's the phrase in the will). My executive director and the board have already accepted the gift, but I have reservations because the money is to be used for one purpose – and one purpose only – forever. I asked what we would do with the money if we someday didn't offer this program and the executive director said that it is probable that we would always offer it, and if we didn't, the donor's wishes wouldn't matter. He did this by reminding me, with a wink, that dead donors can't say much.

A: Although that kind of response is convenient, it's a little too cute for the seriousness of the gift intention, as well as for the potential gravity of the situation. While dead people don't talk, their voices can be heard through the ages. And doing what donors want should be a big consideration – even for those who make their gifts through bequests.

Putting aside the inconsiderate attitude for a moment, the word "perpetuity" has a meaning: "a thing that lasts forever"; "the state or quality of lasting forever." Note the use of the word "forever." Charities cannot promise something forever. It's not humanly or organizationally possible. Not when you think of the world in 1,000 years – or longer (because forever is longer than even that); but that is certainly true when you take into account the reality that not much stays the same for more than only a few years. This is why, when chartering his foundation, Andrew Carnegie said, "Conditions upon the [earth] inevitably change; hence, no wise man will bind Trustees forever to certain paths, causes or institutions." Benjamin Franklin said much the same when he established his historic gifts – 200 years would pass before the corpus would be distributed – to benefit Boston and Philadelphia, and Massachusetts and Pennsylvania: "Considering the accidents to which all human affairs and projects are subject in such a length of time," he wrote, "I have, perhaps, too much flattered myself with a vain fancy that these dispositions, if carried into execution, will be continued without interruption and have the effects proposed." But even if a donor is the one demanding the dead hand's grip, it's imperative that the charity accepting the gift doesn't bind itself past its abilities. No one, as I say, has the ability to promise something forever. With that in mind, I think it's best when gift agreements never use the phrase "in perpetuity." Actually, gift acceptance policies might be wise to use the word "never" when describing when the phrase can be used. (But that point takes us more to a philosophical conundrum than to an ethical dilemma.)

But I also take note of your executive director's attitude. Although more and more states take seriously the idea of a donor's intentions, statutes (of which there are currently almost none) or judicial results (or which there is a growing number) on this subject should matter far less than the trust a donor infers when a charity takes a gift under its wing. Break that trust, especially if it's intentional, and the charity has no business being in business.

While it very well may be that you fully intend to provide early childhood education forever, it would be prudent to accept the gift only after discussing with surviving family members – and obtaining their written agreement about this – a thought-through diversion of the income if it becomes necessary in the future.

Bottom line (in addition to fostering trust through responsible stewardship): Although we don't think of it this way, a lot of ethical decision-making is based on our understanding of what words mean – and what future generations will think was meant back in 2014.

Written by Jessica Brookstein, MBA, CAP®

Make the Most of 2024

I am excited to start 2024 as your new council president and would welcome the opportunity to check in with you to see if your WHY and your WHAT are being met. Why did you join the council and are you getting out of it WHAT you thought you would?

Whether your NEW YEAR started on September 15, 2023, January 1, 2024, or February 10, 2024, let’s make the most of your year.

Maximize the benefits of your PGCGP membership to enhance your professional life.

• Our education programs at The Racquet Club of Philadelphia include lunch and are scheduled from 11-2 on March 21st, June 20th and September 12th 2024. Please join us and learn from our expert presenters.
• Are you an expert in one or more areas of planned giving? Consider presenting at one of our educational programs.
• Register for our Spring Planned Giving Course as a good introduction to our field.
• Attend our annual Planned Giving Day Conference which will be held at the Inn at Villanova on October 16th 2024.
• Volunteer your time and expertise: Get involved with PGCGP committees; strengthen your own professional skills; network with your colleagues.
• Get to know our sponsors and take advantage of the quality services and products they provide to better serve our planned giving community.

Written by Abby Axelrod-Wunderman, Philanthropic Director, Family Office Services, Foundations and Endowment, Fiduciary Trust International

All families have good intentions when giving assets to charity. They want to share their resources, positively impact the community and show their children how their values are reflected in their philanthropic work.

As advisors, it’s our job to help them understand that it takes strong focus and commitment to build a philanthropic program that carries into future generations. Building out the framework, the ongoing maintenance and evaluating the impact all require added thought and effort.

Advisors can be effective partners in helping clients design a plan that includes extended family and others, creating a lasting legacy. Such a plan can communicate values across generations and develop a sense of social responsibility in the rising generation. Establishing a process-driven approach to giving can help build the bridge across generations and maintain growth within a family’s philanthropy.

As an example, the following case study illustrates the experience of the Miller family, a single-family office, whose goal is to achieve family cohesiveness, clear communication and evolve together. What they initially lacked in structure they made up for by implementing a clear process to further their philanthropy.

About the Millers…

The Millers consider themselves a close family. The first generation immigrated to this country and started a local real estate business. From there, the second generation took the framework of that business and grew it into what it is today, a multi-million-dollar company spread across multiple states. Together, these two generations have experienced both poverty and enormous wealth. They have similar values and have shared many of the same experiences.

The third generation was raised similarly to the second generation -- prioritizing hard work, family traditions and discipline. However, the parents and grandparents have avoided direct discussions of their family’s wealth with the grandchildren.

The rationale was that they felt knowledge of the family’s wealth would create more problems for the third generation than opportunities. The first two generations have not given much attention to how the third generation will explicitly learn about their family wealth or how they will be included in meaningful family dialogue about the business or family finances.

The Millers’ Philanthropy

On top of this dynamic lies the Millers’ philanthropic work. A family foundation founded by the first two generations is intended to be passed along to the third generation and beyond. The oldest generation was leading the Miller Foundation at the beginning stages, while the next generation was more focused on building the family business.

They engaged in a scattershot giving philosophy, giving gifts as possible to as many “good” causes as possible. There was no formal process for grantmaking and no follow-up with grantees about results and progress. This led to the Miller Foundation giving many small gifts each year to the same handful of charities.

Eventually, the second generation decided to become more engaged. They evaluated the current charities and worked on better understanding the needs of the community. This led to the distribution of fewer gifts in larger amounts to those charities that were doing work that aligned more closely with the foundation’s mission. Certain charities stopped receiving grants, yet the first two generations of the family continued to share the same mission and focus. The giving techniques varied, although the shared values kept operations flowing.

Inviting the Third Generation to the Table

A few years ago, with the first generation in their late 70s and the second in their late 40s and 50s, some of the grandchildren began to ask about the family business. The parents and grandparents agreed to include the grandchildren in the philanthropic work as a first step.

There were several mishaps along the way, from a failure to create a common language around values, to basic private foundation education, to breaking the silence around the family’s wealth. After a few unfortunate outcomes due to poor planning around how to integrate the younger generation, the family was ready for some philanthropic advisory and support.

Implementing a Process-Driven Approach

The Miller Family is not alone in their limited structure and desire to be better. For many families it is often a challenge of knowing where to start. Try these seven steps to help your clients focus their giving strategy and implement plans.

Step 1: Unlock Values and Focus Areas

The Millers initially lacked a basic understanding of shared values across the three generations. They also did not acknowledge that the rising generation may have their own values to contribute.

The first step is to unlock and share the family’s motivations and values for philanthropic giving through a series of values-sharing discussions. These values provide the anchor for decision-making at each step of the philanthropy process. The simplest way to organize philanthropy is to focus on selected specific issues, rather than giving across many issues.

Step 2: Determine How to Involve Others

Like many high-net-worth families, the Millers wanted to involve family and possibly even others in their philanthropy. However, there first should be internal discussions around who, what, when, where and how to involve others.

Involving family can take multiple forms, from including them in decision-making to preparing for eventual succession.

Step 3: Set a Family Budget

The Miller family had not allocated an annual philanthropic budget. This led to reactive giving overriding some focus areas and not leaving room for the rising generation’s values to be supported.

Evaluating previous contributions can illuminate giving distribution across selected causes and the total amount allocated. With this holistic view, you can consider adjustments that can make the giving more proactive and inclusive.

Step 4: Structure Giving to the Family’s Needs

The Millers only considered one type of vehicle to carry out their philanthropy. However, there are many ways to structure giving, especially to include multiple generations, perspectives and values. While you can achieve philanthropic objectives through any vehicle, the goal is to select the vehicle or combination of vehicles that aligns with the family’s broader goals.

Step 5: Find and Vet the Right Partners

With the Millers, there was little structure around how they found and vetted potential grantees. While the task can seem daunting, understanding the “why” and “how” behind finding nonprofit partners will help achieve more meaningful results within the projects it funds. This leads into the final stages.

Step 6: Evaluate and Measure Impact of Grantmaking

Research shows the rising generation cares deeply about the short- and long-term impacts of their grantmaking. Understanding how to evaluate ongoing projects will help build success while encouraging the rising generations to be more proactive in their involvement.

The Millers did not have a process for measuring the success of their grantmaking. Even though the second generation thoroughly evaluated the first generation’s grantmaking, it was not enough to cultivate a long-term understanding of the impact of their support.

The most effective way to create meaningful change is to set clear goals, determine objectives and measure ongoing progress. Keeping a rhythm in the evaluation process is key, yet it is also where one of the major challenges in continuity lies.

Step 7: Monitor Progress and Repeat Steps When Necessary

Families often get into a rut when the reason for how they operate is: “that’s the way it’s always been done.” The challenge is to fight complacency and create accountability. Annual reviews are one way families can monitor their progress and make necessary adjustments.

Bringing it all Together

Philanthropic advisors can assist families with role clarity, responsibility sharing, communication and the appropriate dissemination of information. Successful outcomes are most often achieved with thoughtful advance planning and preparation. With the right perspective and experience, skilled advisors can create an effective process to help clients carry their philanthropic work through future generations.

To learn more about Fiduciary Trust International and our Philanthropic Services, please contact Abby Axelrod-Wunderman at abby.axelrod@ftci.com or (212) 632-3000.

Written by Beth Harper Briglia CPA, CAP®, Philanthropic Advisor

Tom Peters, author of In Search of Excellence, famously said, “If a window of opportunity appears, don't pull down the shade.”  The pending sunset of the Tax Cuts and Jobs Act (TCJA) offers an opportunity for planned giving professionals to work with donors and their advisors to ensure that their estate plans achieve desired personal and charitable outcomes, while mitigating tax impact. Recognize also that a larger pool of donors will be impacted by changes in exemption limits. Now is the time to communicate with your donors to certainly inform on, and at best to participate in discussions with their professional advisors.

Tax implications are rarely the sole motivator of charitable gifts. However, tax impact can influence the structure of a charitable gift. Consider the following strategies in your stewardship and legacy discussions:

• Donors who use a formulaic approach in their estate plans to determine bequests to family, beneficiaries, and charity, should review this mechanism to ensure it achieves the donor’s intended goals while minimizing taxes.
• Expect an increased use of charitable trusts to provide beneficiaries with income for life or a set term, with the remainder designated for charity. At modest asset levels, charitable gift annuities can provide similar benefits. The current interest rate environment favors these charitable gift structures.
• A Donor Advised Fund with a planned gift component can be used to donate charitable assets today and estate assets in the future.
• Prepare now to accept non-traditional gifts such as real estate and family businesses by using in-house or out-sourced expertise.

Stewardship and communication with donors and their professional advisors is key to “seizing” this coming opportunity!