E-Newsletter

Written By: David L. Eldridge, Ph.D., Associate Director of Individual Giving, Swarthmore College, and Carol Blakely Buchser, M.S., Swarthmore College Class of 1967 (in consultation with Renée Atkinson, Director of Gift Planning, Swarthmore College)

The philanthropic partnerships we form via planned gift discussions are grounded in the sensitive topic of mortality as we plan a donor’s final gift. These discussions also involve the complexity of matching donors with a myriad of possible planned gift structures with varied tax and financial implications and requirements. In this case,the creation of Carol’s flip trust accelerated a pre-existing bequest of real estate that she had established years before we began our work together. The transformation from a revocable bequest to an irrevocable life income gift nearly doubled Carol’s impact on Swarthmore’s Changing Lives, Changing the World campaign, expanded her class scholarship’s impact, and added to Carol’s delight in giving. Swarthmore’s donor-centric approach prepared David to follow Carol’s lead from our first meeting.

David: When we first met, you were so excited to show me how much your bequeathed property had increased in value! Listening to you talk about how your cancer experience inspired that gift demonstrated deep trust and motivated me to discover ways to turn the additional equity into philanthropy.

Carol: Attending Swarthmore changed my life in so many ways. When I contracted thyroid cancer in 2014, I set up a Living Trust and bequeathed the condominium I purchased in 1977 to Swarthmore. I am thrilled that the condo valuation has increased dramatically over 43 years.

David: I had no idea if it was possible to convert the added equity of Carol’s property into an expanded gift. After some consultation with colleagues, we discovered a solution: a flip trust! You were excited about the strategy, but you had a caveat.

Carol: I am devoted to my long-term tenant, who moved into the property in 2012. She is retired and lives alone but has two grandchildren living nearby whom she cares for. I felt strongly that it would be mean-spirited to inform the tenant that I was giving her a month’s notice to move out.

David: We then wrestled at the office with a new question: would the tenant’s ending the lease constitute a qualified flip event? Some of our external advisors furnished an answer. Since Carol would sell the house after her tenant leaves, we could use the standard flip event of the property sale.

David: We worked hard together with a number of my colleagues and the vendor that manages our trust investments to establish Carol’s trusteeship and to make sure that everyone shared an understanding of how Carol’s flip trust operates. As the current trustee, Carol will continue to receive rent and will pay all property expenses, including those accrued at sale (taxes, advisement, etc.). Swarthmore will then assume trusteeship over the sale proceeds and distribute quarterly trust revenue to Carol.

Carol: The process of setting up the flip trust was a smooth one. I received excellent guidance from the Swarthmore team and the trust investments vendor. I consulted with my trust attorney, and we were able to get all documents completed in short order. I would recommend a flip trust solution.

Planned giving is best conceived as a creative, solution-generating collaboration among donors, gift officers, and external advisors (Carol and David’s team comprised over 15 people and four organizations).

Written by: Anat Becker, JD

Dear Colleagues,

The gift planning field is ever changing. We regularly adapt to new laws, regulations and market conditions. These days we also have to consider a pandemic to which our legacy donors are particularly vulnerable both physically and financially.

How do we talk to our most loyal supporters in a sensitive way while conveying our philanthropic mission and good work? In addition to tact and a thorough understanding of our respective missions we also educate ourselves about pertinent changes in law, taxes and even our own organizational operations.

Please join us on June 4th for a presentation by Laura Solomon, Esq., who also penned an article below. Laura will address how the CARES Act affects charities specifically.

On June 18th Ronald Brown will talk about charitable gift annuities and their long history in Philly. CGAs, which offer fixed income for life, may be especially appealing to your donors now. But they may also pose a risk to your organizations, which back the annuities with their full faith and credit, considering sharp market fluctuations.

The Planned Giving Council of Greater Philadelphia will continue to provide resources as we navigate this new reality. Stay tuned for additional programs in the fall. We certainly hope to see you in person. But if we cannot, we will adapt.

Best wishes to you all.

Written by: Laura N. Solomon, Esq., Founder of Laura Solomon & Associates

On March 13, President Trump declared the COVID-19 pandemic to be a “qualified disaster” under the under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.  This designation means that employers and charities may make tax-free “qualified disaster relief payments” or reimbursements to employees and other individuals who have been affected by COVID-19.

Qualified relief payments can include:

These payments are not considered income to the recipient, need not be reported on a Form W-2 or 1099, and are fully deductible as business expenses of the employer.  Employers seeking charitable contribution deductions for their relief payments may also use charitable organizations and even donor-advised funds, for this purpose.

Charitable organizations can also make income tax-free qualified disaster relief payments, including payments to their employees if the payments are:

The IRS recommends that charitable organizations making qualified disaster relief payments maintain a qualified disaster relief policy or other records to show that the organization’s payments further the organization’s charitable purposes and that the victims served are needy or distressed.  Such documentation should include:

For additional guidance on qualified disaster relief payments, see IRS Publication 3833.

Please let us know if you have questions or require assistance as you navigate qualified disaster relief payments or any other COVID-19 related legislation.  We will continue to highlight new legislation and other opportunities to support and provide relief to those impacted by COVID-19.

You can contact us at (610) 645-0992 or on our website www.laurasolomonesq.com.

Click here for Laura Solomon’s Lunch and Learn program on June 4^th.

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 18^th webinar.

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.

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.

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 27^th, and the Planned Giving Course, originally scheduled for April 2^nd and 3^rd.   

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

Similarly, the Planned Giving Course has been rescheduled to September 24^th and 25^th 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!

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.

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!