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Click on the links below to access the full articles from our council e-newsletter.  The e-newsletter is distributed three times a year (March, June and September).  If you are interested in providing an article for future issues, please email info@pgcgp.org.

  • Thursday, May 28, 2020 9:48 AM | Anna Matheson (Administrator)

    Written by: Ronald A. Brown, Author, “A History of Charitable Gift Planning” (Amazon 2017)

    I am excited to bring this presentation to Philadelphia, home for so much American history! It is not surprising that your fair city is important in shaping gift planning today.

    This will not be like any other webinar. A few years ago, I realized something is missing in the way America trains its charitable gift planners. Something important.

    Where do gift planners turn for knowledge about our rich history? Seminars rarely venture beyond the last few years. No one else is teaching or writing about the fundamentally important charitable bequests, trusts, annuities, and gifts of complex assets by colonists and by citizens of the newborn United States. Even recent events, like the national crisis that led to the Philanthropy Protection Act of 1995, have disappeared from our agendas.

    I lead a campaign to own what came before us. The goal of my campaign is to enable you to recognize new facets of yourself through true stories and well-documented historical facts. Enlightened gift planners have clearer vision and are empowered to recover our proud American heritage.

    My campaign is based on thousands of hours of scholarly research and writing. I make the results available through my book A History of Charitable Gift Planning (Amazon 2017), my free website at www.giftplanninghistory.org and my presentations for planned giving councils and conferences across America.

    On June 18 my session for PGCGP has four chapters.

    1) We begin the story of charitable bequests and trusts where America began. That is the best way to understand what comes later. Our early history is not told this way anywhere else. You don’t want to miss it!

    2) You will see the important roles Philadelphia plays in the history of gift planning. Some of these roles include:

    Bequests, trusts, and gifts of complex assets provided vital support for the Pennsylvania Hospital, founded in 1751 by Dr. Thomas Bond and Benjamin Franklin.    

    America’s first known gift annuity in 1831 was funded by John Trumbull’s best paintings of the American Revolution, including a 1776 scene in Independence Hall and a portrait of Philadelphia hero Dr. Benjamin Rush.

    Stephen Girard’s bequest to found Girard College, the largest gift to that point in American history, was challenged by greedy distant relatives. A Supreme Court decision in Vidal v. Girard’s Executors (1844) changed national policy on charitable trusts.

    A Philadelphia actuary named George Augustus Huggins introduced data-based decision making into American fundraising at the first ACGA conference in 1927. Huggins created a risk-management system for gift annuity programs based on business practices of life insurance and commercial annuity firms. His actuarial model is now enshrined in federal law governing all life-income gifts.

    3) We revisit the crisis created by a class-action lawsuit that threatened 1,900 charities with triple damages, and that led to the Philanthropy Protection Act of 1995. This far-reaching law affects the work of gift planners and investment firms every day.     

    4) We end with tax reforms in 1969 and 1986 that caused a great wave of planned gifts but opened a door to self-dealing abuses. A group of volunteers, including me, responded by founding the National Committee on Planned Giving, now known as the National Association of Charitable Gift Planners.

    What will you gain from participating in this unique webinar? You will see yourself and your work in a fresh new light. A world of gift planning stories and ideas will be opened for you. I can’t wait to get started!

    Click here to register for the June 18th webinar.

  • Thursday, May 28, 2020 9:45 AM | Anna Matheson (Administrator)

    Written by: Joseph Tumolo, CAP®, CEO, Gift Planning Development, LLC

    The hot topic on all the social media posts, emails, and zoom webinars center around fundraising during a pandemic. Do we call donors? What do we talk about? Do we ask them for a gift? Every one of our donors are in a different place financially, in their life stage, and their health status.  How can we make a blanket decision regarding our donor’s interest and ability in making a gift? We can’t. There are plenty of donors making large current and deferred gifts during the pandemic. So why take away their right to make a difference and have an impact on the people we serve?

    Don’t make decisions for your donors. It’s my favorite phrase to use with my clients and in my work. How many times do we decide on behalf of someone what we think they will prefer without asking them? Here are a few examples I have heard recently; “A donor just made a large major gift a few months ago, we can’t possibly talk to them about a gift from their assets”.  “We upset the donor by misspelling their name in the annual report last week. We can’t possibly talk to them about doing more at this time”. And of course, “we are in a major pandemic, the economy is so uncertain, we can’t possibly talk to our donors about making major gifts”. Sometimes our assumptions are more subtle, and we don’t realize we are doing it. Here is one I caught myself making recently “this person has never made a gift; how could they possibly be open to a conversation about a planned gift”? Turns out the person was a retired, long time employee of the organization and in fact, had provided for the organization in their estate plans already. We most likely never would have known that (during her lifetime).

    I am not suggesting that we ignore the reality of what is going on or be apathetic towards what our donors are going through. I am suggesting that we let our donors decide what is best for them. The easiest way to continue to have fundraising conversations with donors is to ask their permission to have a conversation. Take their temperature, ask them if it is appropriate for you to bring up the conversation about them making a gift. I will often say to a donor something like “I know things are very uncertain right now and I was not sure if I should bring up the gift conversation with you, but I do not want to make that decision for you. Is it appropriate for us to have the conversation”?

    Stop making decisions for your donors. Present the opportunity for them to decide. This applies to all aspects of your interactions with your donors. Ask them how they would like to be cultivated, asked, and stewarded for their gifts. It will separate you and your organization from the competition.

  • Thursday, May 28, 2020 9:42 AM | Anna Matheson (Administrator)

    Written by: Lynn Johnson-Porter, VP Philanthropy & Mission Support, HumanGood

    The last few months certainly have forced many of us to reframe how we engage our most loyal benefactors.

    Regularly, I reach out to one particular resident at our largest Life Plan community to hear about her experiences as she navigates recommendations to “shelter in place” which ultimately disconnect her from the socially enriching experiences that have traditionally afforded her so much pleasure. Through it all, this resident exemplifies the spirit of philanthropy by affirming her commitment to annual donations, annual major gifts and an estate donation to honor the memory of her husband.

    Throughout this unprecedented time, she has remained optimistic, often upholding her pledge to “give back”, primarily in tribute to the unselfish actions of front-line staff who care for her and in tribute to the members of her extended family, who have given her happy memories for nearly 15 years.

    These days, many of us continue to field advice about how best to navigate the “new normal.”  Working from home, decreased personal interactions with benefactors, teleconferencing, etc., continue to transform the manner in which we conduct donor relations. Nonetheless, my experiences in recent months remind me that when motivating prospects and donors toward Planned Giving opportunities, the “old norms” are perfectly fine.

    Philanthropy and Planned Giving, especially, aren’t solely about the achievement of goals. Instead, we need to sustain those fundamental practices that motivate others toward transformational gifts.  

    As this crisis causes us to pause and evaluate strategies toward the attainment of goals, remember that basic fundraising principles still have tremendous value.

    Moving forward, let’s consider infusing these four “C” s into our programming:

    • 1.      Connect: Personal phone calls are one of the most impactful ways to foster relationships with donors.  Many benefactors, particularly seniors, truly appreciate such gestures as they may be isolated from so many who mean most to them.
    • 2.      Create New Planned Giving Opportunities:  Uncover ways to deepen relationships with major gift benefactors who have not yet made deferred commitments. This crisis is prompting many visionary philanthropists to give careful thought to ways to make a meaningful impact upon the lives of others long into the future. 
    • 3.      Communicate: Design a series of touch points from now until the conclusion of 2020 for your benefactors and prospects, including emails and direct mail, to reinforce your mission and express appreciation for their decision to include your organization among their philanthropic priorities.  Make certain to share stories about the front-line heroes and heroines across your organization, whose dedication to service fosters the well-being on myriad levels.  Such messaging will serve you well in 2021 and beyond.
    • 4.      Celebrate:  A stewardship event to demonstrate appreciation to your most loyal benefactors—when this crisis is behind us-- will be a worthwhile investment to not only acknowledge generosity, but uncover sentiments about giving at all levels.  In addition to fostering good will, you will gain valuable insight into the inclinations of those who have supported your organization in the past-- and hold promise for its future.
  • Thursday, May 28, 2020 9:23 AM | Anna Matheson (Administrator)
    Click here to read the entire Q1 commentary provided by State Street Global Advisors, a Gold Sponsor of PGCGP.
  • Monday, March 16, 2020 8:16 PM | Anna Matheson (Administrator)

    Written by: Anat Becker, JD

    Dear Colleagues,

    Welcome to another issue of the Planned Giving Council of Greater Philadelphia e-newsletter. We have several excellent articles covering legislative, technical and ethical topics that are especially pertinent to our field at the moment. David Toll, Esq., covers the SECURE Act’s implications for our donors. You will find great pieces by Bob Fogal, Aruna Pappu, and Mark Smith that are timely and helpful.

    When I initially wrote this letter, I was eager to share with you a full slate of spring programming, including our education program, originally scheduled for March 27th, and the Planned Giving Course, originally scheduled for April 2nd and 3rd.   

    Due to concerns surrounding the Coronavirus (COVID-19), our education programs will take place in the late fall on Thursday, December 3rd. We hope that the education programs currently planned for June 4th will take place as scheduled. Of course, we will keep you posted.

    Similarly, the Planned Giving Course has been rescheduled to September 24th and 25th and I am pleased to share the following updates to the Planned Giving Course:

    *The Course will take place on two consecutive days in the fall.

    *We have updated the course. In addition to offering current technical and legal information, we will discuss practical ways for planned giving officers to approach prospective donors. Participants will complete the Course with concrete solicitation techniques.

    *We will host a reception following the first day's sessions for the instructors and participants, providing additional opportunities to network and socialize.

    *The Course offers continuing education credit for CFRE, CLE and PACE.

    To register for the Course, please click here.

    With best wishes for a healthy spring!

  • Monday, March 16, 2020 8:08 PM | Anna Matheson (Administrator)

    Written by: Mark Smith, Relationship Manager, TIAA Kaspick

    Click here to read about uncovering assets other than cash that can become viable gifts for your organization. Article used with permission.

  • Monday, March 16, 2020 8:07 PM | Anna Matheson (Administrator)

    Written by: Aruna K. Pappu, LLM-Tax, JD, MSTax

    To those of us in the Planned Giving (PG) Community, the multiple benefits resulting from the donation of appreciated assets to a charity is far from a novel concept. As a matter of fact, most of us would consider this strategy a classic “oldie but goodie.” EVERYONE knows this is a downright “no brainer”, right?

    Well, as was made quite clear to me recently, apparently not. Let me explain: I was recently involved with two donor scenarios. Both donors had independently approached my institution seeking to donate multi-million-dollar long-term concentrated positions of appreciated stock. The important distinction, however, was the timing of these respective calls. Specifically, Donor #1 contacted us BEFORE the anticipated sale of his appreciated stock; while Donor #2 called us three weeks AFTER he had completed his stock sale. (You know where this is going…)

    With respect to Donor #1, we were able to advise that the more beneficial approach for all concerned would be for him NOT to sell his appreciated stock, but rather to donate these assets directly to our organization. We explained to Donor #1 that by making such a “Gift-In-Kind” of his appreciated assets, the tax benefit he received would be two-fold: (1) during the year of donation he would get the full FMV income tax deduction (up to a maximum of 30% of his AGI);  AND  (2) he would avoid paying any capital gains tax on the built-in stock appreciation value (i.e., the FMV less his cost basis). We also made clear to Donor #1 that we, as the recipient charity, would not be subject to any income or capital gains tax on the amount he gifted to us. Thus, by making a charitable gift of the appreciated stock to our organization, Donor #1 would be able to make a very generous charitable donation while generating significant tax benefits for himself. As you can imagine, Donor #1 was thrilled with this news and our organization was able to secure a very substantial charitable gift. A classic “Win-Win” all around.

    In contrast, since Donor #2 had already sold his appreciated stock by the time he contacted our office, we were unable to offer him the sort of timely and beneficial advice we offered to Donor #1 above. Sadly, we had to inform Donor #2 that he would be subject to income taxes on the sale of his $11 million in stock as well as capital gains taxes on the built-in appreciation value. He was unaware of these tax implications -- his contemplated Big Gift to our organization unintentionally turned into the “Big Gift That Got Away.” A Big Ouch for all concerned. We tactfully admonished him for not contacting us before he embarked on this stock sale.

    So my friends, the moral of this story is simple:  We must impress on all donors and prospects how imperative it is to involve your planned giving team in the charitable giving discussions as early as possible. Timing, as they say, is EVERYTHING!

  • Monday, March 16, 2020 8:04 PM | Anna Matheson (Administrator)

    Written by: Bob Fogal, PhD, ACFRE, CAP

    In a previous column on personality styles, I wrote (and it’s still a good introduction to the theme!):

    A challenge that all fundraising professionals face is how to engage donors and volunteers—and colleagues—whose personalities differ from our own.

    Observing that “people differ” is a mundane statement. Such statements commonly show up, though, in discussions about others whom we consider a source of difficulty for us—those we might call “problem people.” When we elevate such observations to include social or demographic groups, all kinds of biases and prejudices can surface that are not positive attributes in our profession.

    Self-awareness is essential for the self-management required to manage ourselves professionally.  As we each become clearer about what “makes me tick,” we can identify much more easily how others differ from us in personality and style. I have found that a theory called personality type, as defined and developed by Carl Jung a century ago, is still a good tool for enhancing our interpersonal communication and reducing unconscious characteristics of our personalities.

    One key component of psychological type is how we perceive the world and take in information. (This is what the previous column addressed.)

    Another key component involves our priorities in making decisions and how we interact with the outer world—in other words, how we use what we have learned. Jung called these mental functions “thinking” and “feeling.” The terms aren’t the best, since we all think and we all have feelings. But in 100 years no one has come up with any better terminology, so we’ll stick with it for now.

    Those who prefer to use the thinking function enjoy abstract analysis and objective truth. A favorite analytical tool is exploring data-driven pros and cons. They believe the best decisions remove personal concerns from the process—and getting on with the work. Well-organized information and projects appeal. And it’s not unusual that they have a high level of confidence in their logic.

    In contrast, people who prefer using the feeling function will usually consider how ideas, information and opinions impact people. They make decisions based on how they understand the needs and emotions of the persons involved. Personal values have priority—both their own and others’. If it’s necessary to slow down a task to establish or maintain interpersonal harmony, they will.

    Interacting with someone whose decision-making function differs from our own is challenging. Most of us need a lot of practice to do so. We’re unlikely to encounter overt challenges from donors or prospects when their preference differs from ours—especially from the feeling preference folks! (The thinking preference people will just consider your conversation a waste of time, keeping them from other tasks.) Their default position will simply be lack of interest because we aren’t communicating in their dialect.

    A staff colleague, however, might be different, since we are more likely to deal with positions and decisions that others may want to defend. Extreme defensiveness usually correlates with rigid decision-making, which makes success less likely for everyone.

    So, the data- and task-driven, analytical gift officers need to learn how to relate to people’s personal values and needs. And the interpersonally- and values-oriented gift officers will benefit from learning how to connect with analytically- and task-oriented individuals.

    The observations in these columns barely scratch the surface in applying psychological type to philanthropic management. Let me know (bobfogal31@gmail.com) if you have questions or comments.

  • Wednesday, January 22, 2020 8:08 AM | Denise Downing (Administrator)

    Written by: David J Toll, JD, MBA

    Today, the traditional pension funds our parents had have become a thing of the past and most people will rely on Individual Retirement Accounts (IRAs) or 401(k) plans to take them through their “golden years.” With a goal of enhancing retirement security for a growing population that’s living longer than ever before, last month Congress passed the first major piece of retirement legislation in more than a decade. The Setting Every Community Up for Retirement Enhancement (SECURE) Act took about three years to come to fruition and, despite being stalled along the way, has enjoyed consistent bipartisan support.

    The SECURE Act, which took effect on January 1, 2020, does several things that will affect donors’ ability to save money for retirement and influence how they use the funds over time. Two of these changes may also have a significant impact on their charitable giving:

    • The required minimum distribution (“RMD”) age for retirement accounts increased from 70 1/2 to 72 years old, but the age an IRA owner can make a qualified charitable distribution (QCD) remains at 70½.
    • The SECURE Act modifies the stretch IRA provisions. Until now, a beneficiary could stretch distributions over their lifetime (or the remaining life expectancy of the deceased IRA creator). The new 10-year limit increases the income tax impact to the beneficiaries, which ultimately supports the argument that it is better to name a charity as the beneficiary.

    Change in age for mandatory Required Minimum Distributions (RMDs)

    The SECURE Act increases the age at which retirees must begin taking RMDs from 70½ to 72, allowing investors to save longer before having to take withdrawals. (This change applies to individuals born after June 30, 1949; individuals born on or before June 30, 1949 are still required to begin taking RMDs at age 70-1/2.) This change now allows retirement funds to grow for an extra year and a half before participants must begin receiving distributions.

    No change in age for Qualified Charitable Distributions (QCDs)

    Even though the age requirement for taking mandatory RMDs has increased, donors can still make QCDs of up to $100,000 per year directly from their IRA(s) beginning at age 70 ½ without having to include the RMD in your taxable income for the year as long as they are no longer contributing to their IRAs. If a donor is still contributing to the IRA, it’s important to know that the amounts they contribute after reaching age 70½ will reduce, dollar-for-dollar, the amount of a QCD that can be excluded from their taxable income. Although the SECURE ACT does have rules to coordinate the new IRA rules with QCDs, this may cause some confusion among donors; it is anticipated that the IRS will offer guidance soon.

    For example: if the donor of a $50,000 QCD has contributed $20,000 to her IRA since turning 70½, only $30,000 of the QCD will be excludable from her taxable income. (The donor will be able to itemize the other $20,000 as a charitable deduction, which may offset the additional taxable income.) If the donor makes no further IRA contributions and makes another $50,000 QCD in a subsequent year, all $50,000 of that distribution will be excludable from her taxable income.

    Inherited IRA distributions must now be taken within 10 years

    Previously, if an individual inherited an IRA, they could "stretch" their IRA distributions over a long period of time, deferring income tax and permitting the account balance to compound income tax free. More specifically, following the death of the IRA owner, the retirement benefits passing to a designated beneficiary were paid out over the lifetime of the beneficiary, resulting in a significant tax benefit for beneficiaries who were much younger than the IRA owner, such as a grandchild. The RMDs were calculated based on life expectancy of the grandchild (or other young heir) so after the death of the plan owner, the plan assets would be paid out over that beneficiary’s life expectancy. That deferral (and the accompanying income tax benefit) made many IRA owners comfortable bequeathing a large IRA balance outright.

    The SECURE Act has changed that. Now, for IRAs inherited from original owners who have passed away on or after January 1, 2020, the new law requires many beneficiaries to withdraw all of the assets within 10 years after the death of the account holder. No withdrawals have to be made during the 10-year period, but at the end of 10-years from the date of the plan holder’s death, the entire balance in the plan must be withdrawn.

    Exceptions to the 10-year rule include: assets left to a surviving spouse, a disabled or chronically ill beneficiary, or beneficiaries who are less than 10 years younger than the original IRA owner. In these cases, the beneficiary is allowed to take distributions under the old rules. Minor children are also considered an exception to the 10-year rule; however, when the minor reaches age 18, the 10-year rule will clock will begin ticking and the plan assets will have to be paid out by year 10, when they reach age 28.

    What if an IRA was inherited before 2020? Since, the SECURE Act only applies to retirement plan assets that are inherited after January 1, 2020, the complex distribution rules that existed under prior law will continue to apply to many heirs.

    A new opportunity for strategic charitable giving

    For charitably minded people who don’t necessarily want their non-spousal beneficiaries to receive their entire IRA proceeds within 10 years, a testamentary life income gift, such as a charitable remainder trust (CRT), may offer a creative solution:

    • The IRA owner can designate a CRT as the beneficiary of the account and the IRA proceeds will then be used to fund a life income vehicle that will provide income for loved ones, either for their lifetime(s) or for a set term of years, and typically generally with a minimum 5% payout (each payment would carry out a portion of the income). At the end of the term, the remaining assets will go to one or more charitable organizations chosen by the original IRA accountholder. This strategy combines tax-free growth, maximum income, protection of the trust principal and future support of a favorite charitable cause. For individuals who want to protect and help loved ones, the IRA-to-testamentary-CRT solution offers enormous benefits and might accomplish something similar to the intended deferral before the SECURE Act.
    • Under the rules for CRTs, a minimum of 10% of the assets must go to charity at the end of the CRT’s term. To further provide for heirs and replace those assets, the IRA owner might also purchase a life insurance policy in an amount equal to what is estimated to go to charity and, to avoid any potential estate taxes, establish an insurance trust to hold the proceeds. This strategy is similar to a planning concept sometimes known as “a wealth replacement trust” but applied here in a post-SECURE Act context.

    Next Step:

    These changes are just a few of those resulting from enactment of the SECURE Act. Take this opportunity to educate your donors about the benefits of using a testamentary CRT or other life income gift to replicate the stretch IRA for their families. As with any piece of new legislation, it is important to encourage your donors to work with their tax professionals and advisors to define and prioritize their personal objectives an explore the best solutions and strategies for them.

  • Thursday, September 26, 2019 11:33 AM | Anna Matheson (Administrator)

    Written by: Anat Becker, JD

    Dear Friends,

    Earlier this month I had the pleasure of attending our educational program at the historic Racquet Club in Philadelphia.  Sometimes I take it for granted that our Council members get to meet in iconic Philadelphia locations.  One of our speakers, Patrick Schmitt, traveled from NYC for the day, and was clearly impressed with the elegant club and the ambiance that we all appreciate while we learn, network, and enjoy the sumptuous luncheon. Patrick, co-founder of FreeWill, an innovative new social venture, spoke about the latest research into digital fund raising, specifically for planned gifts.  Some of the information confirmed our experience: childless donors make for good planned gift prospects.  But some of the other findings of FreeWill could help us all amplify the impact of digital fundraising.  I was pleased to hear that donors were much more likely to share the size of their deferred gift if they learned that the information could help their relationship officer.  Also, while we know that donors increasingly name a percentage amount (rather than a specific figure) in their estate or retirement plans, the benefit of percentage gifts to organizations was dramatic.  Percentage designations surpassed dollar designations by 120%!

    To hear about Patrick’s insights on maximizing qualified charitable distributions to your organization, please come to Planned Giving Day on October 30 for another excellent presentation, among numerous others.  The offerings this year continue to be relevant, helpful and practical for our daily work. 

    Another terrific presentation was made by Lynn Malzone Ierardi, JD, who is the current Chair of the National Association of Charitable Gift Planners.  Lynn talked about her recent book, Storytelling, The Secret Sauce of Fundraising Success.  Listening to, and telling, stories can increase both giving and our own professional growth.

    Looking forward to seeing you on October 30 at the Union League.

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E-mail: info@pgcgp.org

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