E-Newsletter

Written by: Viken Mikaelian, CEO, PlannedGiving.com

There’s a lesson that fundraisers can learn from the history of Niagara Falls — specifically, about a suspension bridge that, from 1855 to 1897, connected the United States to Canada over the roaring waters. Here’s the story how it was built.

Engineering Challenge

The Niagara River, which drains Lake Erie into Lake Ontario, is 800 feet wide at the falls. The sheer cliffs that make up either side of the Whirlpool Gorge are 225 feet high. In the 19th Century, there was no technology available to easily span that gap and begin construction of a bridge.

Engineers proposed using a rocket, or a shell fired by a cannon, to carry a line across the gorge, but neither idea offered a very probable solution.

A Marketing Twist: Hire a Kid with a Kite

Enter local ironworker Theodore G. Hulett, who told the engineers to go fly a kite — or rather, have a child fly one and offer a prize for the first kite to make it to the other side of the gorge.

This Was Brilliant Marketing ...

With $5 on the line — a splendid and princely sum in those days — 16-year-old Homan Walsh beat out the scores of other kids from nearby towns who participated. He managed to get his kite across that 800-foot gap, where its line was then tied off.

What's the Big Deal?

Engineers used the kite string as a pilot line to pull a stronger rope from the Canadian side back to the American side. That was used to pull an even thicker, stronger rope back to Canada. After several of these exchanges, a rope strong enough to carry a cable was finally in place. The cable was pulled across — and that provided the starting point for the foundation of the bridge.

“Building the Bridge to an Endowment”

How does this relate to planned giving? Because a simple, single kite with a single small thread (i.e., your first baby step) became the catalyst for a massive construction project that led to the bridge (i.e., your endowment).

It is amazing how many answers lie in simple solutions. Right in front of us.

So many fundraisers are “stunned” when they have to face the startup of a planned giving program — they envision it being a massive project and just do not know where to begin. Yet by following the same principle as the one used to build the suspension bridge, one can easily start a planned giving program with a few simple steps.

Some of the best minds in the planned giving world are involved in the Planned Giving Council of Greater Philadelphia (and one is me).  Take the first step by utilizing your resources!

Written by: Delia Perez, Director of Planned Giving, Fairleigh Dickinson University

Rev. Thomas L. Shanklin fondly reminisces about his FDU education at Wroxton College during the spring of 1967 in Oxfordshire, England. “Wroxton was my most significant life-changing experience. It challenged me and sparked my curiosity to find my true calling in life,” says Tom.

He is a first generation American, born to Harold and Anna Shanklin. Harold, born in 1896, was descended from Loyalists to the Crown of England, who immigrated to Canada in 1783. Anna, born in Germany in 1907, was sent at age 15 to Hoboken, N.J., to send money home after World War I. Harold and Anna met in Hoboken, and married in March 1928 in Detroit. They relocated to Basking Ridge, N.J., where on November 11, 1944, they welcomed their third child, Tom.

Although his parents had only an eighth-grade education, they were avid readers and lifelong learners. They encouraged Tom to read everything and strive to use his abilities to be his best. Tom graduated from Ridge High School in Basking Ridge, N.J., in 1962. His IQ test results scored him in the top 5% of the country, but he was told his overall grades didn’t qualify him to pursue a college education. 

However, in the summer of 1963, Tom decided to enroll in evening classes at Fairleigh Dickinson University. He worked days in a family-owned industrial hardware business in Hanover, N.J. He studied business but was bored with the material. His grades reflected his lack of interest. He decided he did not want to work for big companies like IBM or Exxon.

Instead, Tom became more involved in his church and studied pipe-organ under the guidance of an insightful teacher who mentored and affirmed his value within the community. The experience created a strong church affinity for him and further increased his interest in church history and theology.

Tom’s 1967 Wroxton experience greatly contributed to his pursuit of education and challenged him to look at the world differently. Under the tutelage of FDU Professor Walter Savage, and his wife, Patty, and his Wroxton classmates, Tom says, “It awakened me to a world of possibilities.” The Savages not only taught the students, but also mentored and encouraged them to learn and have fun. Wroxton piqued his interest in history, fostered enduring friendships, and changed his life forever.

In retrospect, Tom refers to Wroxton as his “capstone experience” that was both life affirming and confidence building as he successfully managed his first time away from home traveling alone to England. After finishing his Wroxton semester, Tom opted to explore Europe alone on just $5 a day throughout the summer of 1967. He returned home to finish his studies at FDU.  

Tom graduated from Fairleigh Dickinson University in 1968 with a B.S. in Business Management and Marketing. He changed his academic focus to theology and graduated from Drew University’s Theological School with a Master of Divinity in 1972 and a Master of Sacred Theology in 1974. He continued his studies, pursuing a Ph.D. in Theology and History. His specialized field of study is Theology and Methodist History.

During the summers of 1968 to 1970, he worked with the Boy Scouts of America as the Protestant Chaplain at Horseshoe Scout Reservation in Rising Sun, MD. From 1970 to 1971, he served as Chaplain Intern with the Wesley Foundation at the University of Houston in Texas. In the summer of 1971, he served as the Coordinating Protestant Chaplain at Philmont Scout Ranch in Cimarron, N.M., the largest scout facility in the world comprising 210 square miles and hosting up to 20,000 Boy Scouts each summer.

Tom is an ordained minister of the United Methodist Church. He has served as pastor of churches in Kansas, New Jersey, Vermont and New Hampshire. He was ordained Deacon in the New York Conference of the United Methodist Church, having been recommended for ministry by the congregation of John Street United Methodist Church, New York City, the oldest Methodist Congregation in America founded in 1766. He was ordained Elder at First United Methodist Church in Wichita, Kansas in 1975.

Tom lives his true calling and pastors a value-driven life within his church family. He taught at Nathaniel Hawthorne College in Antrim, N.H.; has been a member of the American Guild of Organists; and served as founder and president of the Brattleboro Area Drop-In Center, Inc. in Vermont.

He credits his FDU business marketing studies to help promote his creative work. He has written extensively on Biblical themes and Methodist History publishing books of devotionals and stories. His articles have appeared in a variety of periodicals and he also published two books about Wroxton. His new joy is writing murder mysteries about “characters” he has known. Tom makes his home in New Hampshire and Florida where he pursues his passion for writing, photography, choral singing, pipe-organ playing, theatre arts, travel, and much more.

Tom believes in the importance of making a difference in the lives of others. He encourages everyone to “stay curious, read a lot, walk, laugh often, and play in the dirt.” Given the current world situation, Tom says, “People are desperate for love and kindness, and want to discuss the Divine and thoughts about life and after life. A legacy of living everyday sharing small acts of kindness helps us to fully connect and converse and come to better understand each other while having the courage to be open minded and willing to share, and not limit life to just staring at a cell phone.”

With deep appreciation for his life-affirming experience at Wroxton, Tom included FDU’s Wroxton College in his estate plan. Tom says, “I am grateful for FDU’s founder and first President, Peter Sammartino, Walter and Patty Savage, my classmates and others who made my Wroxton experience possible. My legacy gift for Wroxton College will help support and enhance this wonderful treasure, and hopefully, also inspire future Wroxton students to discover their own true calling in life.”

Tom Shanklin shown carrying the FDU Wroxton flag for the Shakespeare Birthday Celebration Parade with his Wroxton classmates in the spring of 1967.

Written by: Beth Harper Briglia, CAP & CPA, Vice President, Philanthropy Services

We often look closely at funds expended on memberships in professional organizations. Like me, you probably belong to several associations, and have to justify the cost to belong to those organizations. I have no trouble justifying my membership in the Planned Giving Council of Greater Philadelphia. Why?

PGCGP provided me with the mentorship that I needed when I entered the world of planned giving. A mentor is an advisor who can guide you to greater knowledge in a field. Trained as a CPA, I had years of professional experience. However, I had never engaged in philanthropic planning. PGCGP provided me the education to be successful. More importantly, I found colleagues who have offered their expertise and guidance as I have matured in my philanthropic advisory role. I am proud to call these colleagues my mentors.

Encouraged to join PGCGP by a colleague, I was welcomed into the ranks of those who at that time had much more expertise than I in this field. Volunteering on the Planned Giving Day Committee gave me the opportunity to meet experts in a field that often seems complex and confusing. My colleagues have introduced me to professional experts and information sources; urged me to obtain my CAP certification; speak at and participate in professional events and to serve as a mentor.

As a mentor, I enjoy the opportunity to give back to an organization and colleagues that have given much to me. One such colleague is Shelley Speirs who shares her story below.

Written by: Shelley Speirs, MBA, Director of Major and Planned Gifts, East Stroudsburg University Foundation

I was first introduced to the Planned Giving Council of Greater Philadelphia (PGCGP) by a colleague who invited me to a seminar as her guest.  The experience was very informative and offered a deeper level of understanding of philanthropic planning and planned gifts.  Speaker presentations and collegial conversations at subsequent events were equally stimulating and inspired me to become a member.

As a benefit of joining PGCGP, I was able to request a mentor and was matched to Beth Harper Briglia.  Beth has been helpful in answering questions, providing advice, sharing materials, and suggesting opportunities to engage with PGCGP.  By way of Beth, I became involved with the 2018 Planned Giving Day committee.  Since then, I was nominated to serve on the PGCGP Board. I graciously accepted and began my service in January 2019.  In April, I participated in the PG Course and have also committed to assist with next year’s programming.

I can honestly say, the benefits of my PGCGP Membership and the Mentor Program have exceeded my expectations.  I have been able to sharpen my skills in planned giving, remain current on industry news and trends, learn from field experts, create a network of professional colleagues, and provide service back to the organization.

I look forward to becoming a mentor in the future and guiding others as Beth Harper Briglia and the Council have done for me.  My thanks to Beth and the PGCGP Board for their support. I strongly encourage you to consider a membership to PGCGP, get involved, attend events, serve on a committee, request a mentor, or be one!

Written by: Anat Becker, JD

What I appreciate most about our area of expertise, gift planning, is the dynamic nature of the field and the ongoing learning that is fundamental to it. Our personal connections with our constituents are meaningful: listening, supporting and imparting the power of philanthropy to them. Our technical skills require an understanding of estate planning as well as legal and regulatory developments, ensuring that we continuously seek professional education.

This year is especially interesting, and challenging. We can finally see how the 2017 Tax Cuts and Jobs Act affected philanthropic giving and what strategies we can bring back to our organizations. New proposed regulations for gifts of tangible personal property could affect gifts of art and other collectibles. Exciting, but also requiring our attention and new learning opportunities.

This is where I hope you come to partner with the Planned Giving Council of Greater Philadelphia. Our network of professionals includes gift planners, major gifts officers, annual giving officers, consultants and vendors of essential services. Our meetings provide excellent educational forums and interaction with fellow practitioners who can provide perspective and advice on implementation. Whether it is a strategy of encouraging your donors to bundle gifts in order to maximize tax benefits, or helping them attain their ethical legacy -- together we share our success stories and best practices.

Please be sure to look at our new and expanded web site and follow the PGCGP on social media. Below you will read more about that. But most importantly, please join us at our various events and programs.

• On March 22nd, we will host a variety of roundtables in the morning, encouraging conversations and an exchange of ideas. A real estate panel will follow during lunch. Please join us at the beautiful Racquet Club.
• On April 5 and 12, the Planned Giving Course will once again offer thorough and timely instruction on the elements of gift planning. This year we offer the PG Course at Villanova University with ample parking and easy access from the Blue Route. Please encourage your colleagues who are not yet members of the Council to consider attending this program. It is especially appropriate for fundraisers who are relatively new to the field (as well as for those who are looking to refresh their skill set).
• And looking ahead, we are in the midst of planning our next Planned Giving Day on October 30th at the iconic Union League.

I look forward to seeing you soon.

Anat Becker, JD
President, Planned Giving Council of Greater Philadelphia

Written by: Patrick Manion, MBA

Towards the end of 2018 I had some wonderful visits with members of our Legacy Society. I wanted to share some observations and make some recommendations.

On a lunch visit at a diner, I met with a donor who was having a birthday the next day. They were my first closed gift, and this was our 4th visit in four years. I recalled where we met previously, and I remembered their Thanksgiving tradition. The visit was just before Thanksgiving. I did so without combing over my notes, or trying to memorize information. When you are genuine and sincere, you will remember what matters. I posed the question, "Am I a salesman?" After a minute or so of laughter, we compared notes on just how annoying a salesperson can be. We talked about robocalls, junk mail, and just the trickery surrounding most sales calls. This is why I do not approach my job as if I am in sales. My donors do not think of me as a salesman, so why would I frame myself as one?

On another lunch visit, my donor insisted in giving me all sorts of "souvenirs" she receives from other nonprofits she supports. Luggage tags, pens, and other stuff. Nice to know who else she supports. At the same time, she was complaining about a gift officer and how they had very little or no time for her. It seemed to me that the gift officer was trying to just make their numbers and not being considerate of her time, her age, her interests, etc. She does not want to talk much about our mission, she tells me, I gave money for research. That means, she supports and respects the work we do in the particular disease area she supports. Do I need to update her further? Do I need to listen to her aches and pains, and what sort of coleslaw she likes? Our next visit will be at a library in her neighborhood to watch a film. I wonder if the gift officer just trying to make their numbers was invited to a matinee? Or did she instruct her banker to make changes to her plans and exclude that charity?

In these two examples, if you have been in the business for a while, you are probably wondering what point I am trying to make? These observations are nothing new. If you are pretty new to Planned Giving, you are probably wondering why I do not consider myself a salesman. Of late I have noticed a lot of new thinking in the realm of legacy giving. A lot of scientific research, a lot of big data. What are you doing most of your day, or night for that matter? Are you analyzing big data and crunching numbers? Are you questioning what the subject line should be in an email? Are you trying to figure out your best social media strategy? I guarantee you that your donors are not interested in any of the above. They are probably waiting to hear from you, or someone from your institution related to what matters to them. Who is my new scholarship recipient? How are the field staff in Rwanda doing? How was your trip to Ireland? Did you try that new restaurant I recommended after our visit?

As we move further and further away from our donors and what matters most to them, are they moving further and further away from us?

Written by: David, Toll, JD, Drexel University

With the increased notoriety of cryptocurrencies, many charities are exploring the option of accepting Bitcoin, Ripple, Litecoin and nearly 2,000 other virtual currencies for donations. In fact, Fidelity Charitable reports that charitable donations of cryptocurrencies increased ten-fold between 2016 and 2017, and currently there are about 11 million Bitcoin in circulation alone. While adding this as an option for donors may increase the organization’s reach and its reputation for being on the leading edge, it comes with some cautions and important safeguards.

What is it? Cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. Like paper money (cash), we exchange it for goods and services and it has value because we believe and agree that it does; there is no inherent value in the pieces of paper we carry in our wallets. Unlike cash, cryptocurrency is exchanged electronically and uses cryptography to secure and verify transactions, as well as to control the creation of new units of a particular cryptocurrency. Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled. The concept closely resembles peer-to-peer networks for file sharing.

Cryptocurrency has six defined characteristics:

• 100% Digital: Cryptocurrency only exists on computers. There are no coins and no notes. There are no reserves for crypto in Fort Knox or the Bank of England!
• Decentralized: Cryptocurrencies don’t have a central computer or server. They are distributed across a network of (typically) thousands of computers. Networks without a central server are called decentralized networks.
• Peer-to-Peer: Cryptocurrencies are passed from person to person online. Users don’t deal with each other through banks, PayPal or Facebook. They deal with each other directly. Banks, PayPal and Facebook are all trusted third parties. There are no trusted third parties in cryptocurrency! Note: They are called trusted third parties because users must trust them with their personal information in order to use their services. For example, we trust the bank with our money and we trust Facebook with our holiday photos!
• Anonymous: This means that you don’t have to give any personal information to own and use cryptocurrency. There are no rules about who can own or use cryptocurrencies.
• Trustless: Involving no trusted third parties means that users don’t have to trust the system for it to work. Users are in complete control of their money and information at all times.
• Encrypted: Each user has special codes which stop their information from being accessed by other users. This is called cryptography and it’s nearly impossible to hack. It’s also where the crypto part of the crypto definition comes from. Crypto means hidden. When information is hidden with cryptography, it is encrypted.
• Global: Countries have their own currencies called “fiat” currencies. Sending fiat currencies around the world is often difficult. Cryptocurrencies can be sent all over the world easily. This may be especially attractive to donors and charities, as an organization that accepts cryptocurrencies can accept donations from anyone, anywhere in the world without paying international exchange fees, changing currencies, or dealing with international banks.

Tax Considerations. The IRS rules regarding charitable donations of purchased cryptocurrencies are very similar to the rules regarding donations of appreciated securities. A gift of cryptocurrency will be valued at the time of donation at its fair market value. (A charity must sign a donor’s IRS Form 8283 in order for the donor to receive a charitable deduction if the property is valued at $500 or more. For amounts greater than $5,000, an appraisal is required by a certified appraiser.) Additionally, selling cryptocurrency leaves investors subject to the rules governing capital gains: they’ll pay capital gains tax on any increase in value since they bought the cryptocurrency. (If the cryptocurrency has been held for a year or less, investors will pay short-term capital gains taxes at their ordinary income rate. Selling cryptocurrency held for longer than a year will trigger long-term capital gains taxes at rates ranging from 0% to 20%, depending on the investor’s ordinary income tax bracket.)

Donations of cryptocurrencies result in a win-win scenario for both the donor and the charity. On one hand, donors receive a larger tax benefit because the entire FMV of the donation can be deducted and they don’t have to worry about liquidation of their tokens. On the other hand, charities receive the entire amount of cryptocurrency and, ultimately, a larger gift.

For example: Donor A is in the 25% tax bracket and bought a Bitcoin for $1 back in 2010. Currently, it's worth $19,001. If Donor A sells the Bitcoin, she’ll have a capital gain of $19,000. If she is also in the top tax bracket, then she’ll pay long-term capital gains tax of 15% on that gain, costing her $2,850 in taxes. That leaves $16,150 to go to her favorite charity, for which she will get an itemized deduction that could reduce your tax bill by $4,038. At the end of the day, Donor A will end up with a net tax savings of $1,188, and the charity will get $16,150 in cash.

However, if that same Bitcoin is donated directly to the charity, Donor A’s gift will be $19,001, for which she’ll get a full deduction because she owned the bitcoin for longer than one year. This charitable gift won’t trigger any capital gains tax and will provide Donor A with an itemized deduction of $4,750. When the charity sells the Bitcoin for cash to support its mission, it will receive the entire $19,001 and, as a tax-exempt organization, will not be liable for any capital gains tax.

It’s important to note that receiving payments in cryptocurrency in exchange for products or services or as salary is treated as ordinary income at the fair market value of the coin at the time of receipt. Charitable donations of earned cryptocurrency are treated as gifts of cash and are not subject to capital gains tax.

Accepting Cryptocurrencies. Despite high processing fees that lower the net donation received, charities began accepting gifts via credit and debit cards many years ago because of the convenience factor for donors. With cryptocurrency, there are no banks or credit card companies involved in the transactions, resulting in a much lower processing expense.

The process for accepting donations cryptocurrencies is relatively simple. A charity establishes an account with a third-party processing company, such as Bitpay or Coinbase, and then incorporates the cryptocurrency payment option into its online donation site. Charities can then accept incoming cryptocurrency donations and then exchange them for cash at the time of a transaction via the third-party processors.

The primary considerations with virtual currency exchanges are:

• What is the process, information requirements and timeline to open an account?
• Does the exchange allow charities to trade on their platforms?
• Does the exchange trade the virtual currencies the charity will receive as donations?
• Does the exchange allow US-based customers and withdrawals of USD (many large China-based exchanges do not)?
• Can the charity quickly sell through the donated cryptocurrency and withdraw the USD received in exchange or are there limits?
• If the virtual currency will take more than a short period of time to sell, is the charity comfortable keeping it in the charity’s account on the exchange?

Incorporating Cryptocurrency into an Existing Gift Acceptance Policy. Because cryptocurrencies are viewed as property, much like securities, many nonprofit organizations have similar gift acceptance policies for both. It is considered a ‘best practice’ for a recipient charity to sell the cryptocurrency immediately upon receiving it, and this protocol should be clearly stated within the organization’s policy. The gift acceptance policy should also be updated to include the charity’s position on acknowledgement, and compliance protocols for gifts of cryptocurrencies and whether donors are required to provide personal information (name, address, Social Security Number, etc.) in order to guard against criminal or fraudulent activity.

For financial reporting purposes, cryptocurrencies should be treated as a financial asset, and if held, should be reported at fair value in an organization’s statement of financial position; it is reasonable to expect that the fair value would be determined based upon the trading price of the Bitcoin on the applicable exchange on the date of the transaction.

Risks and Legal Vulnerabilities. Despite its growing popularity as a philanthropic option, there are still many uncertainties around cryptocurrencies:

• The value of cryptocurrencies is highly volatile; in fact, in February 2018, the price of Bitcoin dropped to $7,000 from its high of $19,000 in December 2017 and it has continued to fluctuate.
• Although cryptocurrencies share characteristics with both legal tender and traditional securities, they are not currently backed or regulated by the Federal Deposit Insurance Corporation (FDIC) or any other sovereign government. This lack of regulatory oversight does not provide the sort of guarantees that exist with currency regulation (a guarantee of value) or securities regulation (a guarantee of compliance with reporting procedures and standards).
• Currently, cryptocurrency transactions can be completely anonymous, if the donor so chooses. This makes it difficult for fundraisers to steward (or further solicit) the donors.
• Unlike traditional currencies, which are regulated by the Securities and Exchange Commission (SEC), there are no profit or sell disclosures, making cryptocurrency transactions difficult to trace.

Changes to minimize these risks are on the horizon, however. Pending anti-money laundering statutes will require cryptocurrency purchasers to share more of their personal information and provide more state verifiable documentation when registering for an exchange. It is also likely that users may need to divulge more information on the recipients of their transactions (or any other otherwise related parties).

Also, charities accepting cryptocurrencies as gifts may have to navigate SEC and state security licensing requirements if the charity chooses to hold them for investment purposes. Theoretically, this means a charity that delays selling donated cryptocurrencies may have to deal with the potential complications of federal and state securities regulations; however, heavier regulation should ease the fears of charities wary of accepting virtual currency from unknown origins and significantly minimize the risks of unintended association with cybercrime and other unlawful elements.

Cryptocurrency and Estate Planning. Unlike bank accounts which can be accessed after death by an estate’s executor, digital assets typically require a variety of private information to be accessed. This information (and an investor’s digital assets) may be lost forever if an investor fails to record it or share it with a trusted third party during their lifetime. To avoid this, it is crucial that investors physically record any private access information and provide for custody of this information in their wills.

The federal estate tax is based on the value of one’s assets less liabilities at one’s date of death and is imposed at a rate of 40%. One important exception that is critical to understanding how the federal estate tax works involves the estate and gift tax exemption. This exemption is the amount that one can transfer to anyone during one’s lifetime or at death without incurring a gift or estate tax. The Tax Cuts and Jobs Act of 2017 (TCJA) increased the exemption to $11.18 and this amount will be indexed annually for inflation until 2026 (when the exemption amount is scheduled to revert to $5.49 million, with an adjustment for inflation). For wealthier owners of crypto-currency assets, implementing certain estate planning techniques, such as leaving all or part of it to charity rather than leaving potentially highly-taxed assets to heirs, would be beneficial.

Cryptocurrency is coming to philanthropy. A charity’s ability to accept cryptocurrency donations and then convert them into cash will prove to be a valuable asset for nonprofit organizations going forward. Charities open to exploring this gift option should consult with their banks and financial advisors to see if enhancing their fundraising efforts with cryptocurrency will work for their specific organizations.