E-Newsletter

Written by Jessica Brookstein, MBA, CAP®

My second year as President of the Council feels much different than my first year. The same was true for my first and second years as a Member and then a Board Member. Why is that? Is it because in year one of anything really, we are learning? Growing? Getting the feel for how things work? I would say yes to all of those. I felt the same way when I started working in Gift Planning many years ago. What started out as “Can I do this?” turned into “I got this!” The same is true for our Planned Giving Council. You have already taken the first step and joined the Council. Are you learning? Are you growing? Are you starting to feel like part of our team of Planned Giving professionals from around the area? I hope the word “Yes” popped into your head. If YES is your word, then you got this! Time to join a committee, lead a group or continue down the path to becoming a Board Member. 

Whether Yes or No popped into your head, there are a plethora of opportunities for you as a member no matter where you are in your career or involvement with the Council.

Continue to say YES and maximize all the benefits of your PGCGP membership. 

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

Every donor has an intent when supporting an organization, whether that be to create an endowment, fully fund a program, or provide the unrestricted support that enables their chosen recipient to serve the needs they wholeheartedly agree with. However, many donors may be unable to fund their intent through a cash gift.

Gift planning, when combined with the donor’s desires, enables this to happen. One example from a university client was a donor, John Smith, who wished to fund an endowed full scholarship (currently $35,000 per year). John was 62, married, paying for the last year of college for their fourth child, and hoping to make a lasting impact on his university in honor of his 40th reunion.

When John met with his gift officer, he told the officer of his desire to establish the scholarship but did not believe he had the resources to fund it in full. He was going to receive a one-time longevity bonus from his company that would amount to $250K after taxes but had little additional capacity beyond the $10K he gave annually to the university.

John’s gift officer proposed a solution that would meet all of John’s needs within his current economic capacity. The gift officer suggested that John purchase and make the university the owner and beneficiary of a second-to-die life insurance policy. They were able to find a $1.5M policy with a single premium of $225K, which John could fund from his longevity bonus. Additionally, if John desired that the university begin awarding the scholarship immediately, he could add an annual $25K to the $10K he normally gave the university. That gift could pay the scholarship each year until the insurance policy matured. John would be able to fund the additional annual gift with half of the tuition he had been paying for the prior 12 years for his four children to attend college, which ceased with his payment that year.

By listening to the donor and examining a multitude of planned gift options, the giving officer was able to accommodate the donor’s wishes despite initial roadblocks.

NOTE: The insurance policy value and premium are specific to this donor and are provided as examples only, please check with the specifics of your donor to determine the exact costs.

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.