My slide deck from The Foundation Center of New York 9th Annual Open House. What it covers: • What is Planned Giving • How is it done • Who are the best prospects • Cases • Continuing Ed.

1. Demystifying Planned Giving
The Foundation Center
9th Annual Open House
Tony Martignetti, Esq.
Martignetti Planned Giving Advisors
November 5, 2014

2. 2
Where We’re Headed
• What is Planned Giving
• How is it done
• Who are the best prospects
• Cases
• Continuing Ed.

3. 3
What is Planned Giving?
A method of charitable giving that involves
the donor’s consideration of their
retirement plan and family estate plan,
and
Usually (not always) means cash to a
nonprofit at the donor’s death

4. How is Planned Giving Done?
4
• Revocable gifts (your donor can take it back)
-- very valuable to your program
Charitable bequests
Living trusts
Beneficiary designations

5. 5
Charitable Bequests
• Far most popular
• Oh yes, a lot of money in residual estates
• Unlikely you’ll be told
• Not hard to do
• Deduction for estate?
• A revocable gift
• Typical at ordinary income levels
• In property or cash

6. 6
Living Trusts
• OK to revoke
• Not a difficult trust to set up
• Cash or property
• Easy transfer to you
• Not an estate tax deduction
• To avoid probate
• Everyone won’t tell you
• Received at death

7. 7
Beneficiary Designations
• Any asset with a death benefit
• Life Insurance
• Retirement plans
IRA, 401(k), 403(b), Small Employer Pension
(SEP), SIMPLE IRA
• Commercial annuities
• Bank and brokerage accounts w/POD or TOD

8. 8
Where We Are
√ What is Planned Giving
• How is Planned Giving done
√ Revocable gifts
Irrevocable gifts
pay life income

9. 9
Irrevocable Gifts That Pay Life
Income
Donor
donor’s
death
nonprofit
lifetime income
cash, stock,
real estate
planned
gift

10. 10
The Life Income Gifts
(a/k/a love those acronyms)
• Charitable Remainder Trust (CRT)
Fixed income--Charitable Remainder Annuity
Trust (CRAT)
Variable income--Charitable Remainder Unitrust
(CRUT)
• Charitable Gift Annuity (CGA)

11. 11
Charitable Remainder
Annuity Trust
• Fixed income for life to the “income beneficiaries”
-- husband & wife most common
• Based on a fixed percentage of trust assets valued once, at the
beginning
-- must pay at least 5%
• Charitable income tax deduction for present value of estimated
remainder to nonprofit
• No additional contributions to trust
• At the death of the income beneficiaries, remainder is a gift to
nonprofit(s) & trust closes

12. 12
Charitable Remainder
Unitrust
• Variable income for life to the “income beneficiaries”
-- husband & wife most common
• Based on a fixed percentage of trust assets revalued every
year
-- must pay at least 5%
• Charitable income tax deduction for present value of estimated
remainder to nonprofit
• Additional contributions allowed
• At the death of the income beneficiaries, remainder is a gift to
nonprofit(s) & trust closes

13. 13
Charitable Gift Annuity
• Fixed income for life to the donor and another, or any 2
“annuitants”
-- still husband & wife most common
• Based on a fixed percentage of the initial gift
• Charitable income tax deduction for present value of estimate of
what remains for nonprofit
• At the death of annuitants, remainder is a gift to one nonprofit
• Substantial web of state regulation, especially in NY & NJ

14. 14
Where We Are
√ What is Planned Giving
• How is Planned Giving done
√Revocable gifts
Irrevocable gifts
√ pay life income
don’t pay life income

15. Irrevocable Gifts That Don’t Pay
15
Life Income
• Life insurance ownership
• Retained Life Estate
• Charitable Lead Trust (CLT)

16. 16
Life Insurance Ownership--
Nonprofit Owns Policy
• New policy
--donor deducts premium payments
• Existing policy
--donor deducts approx. cash
surrender value & premiums
• An increase in net assets for nonprofit

17. 17
Retained Life Estate
• Not just primary residence
• Expiration, then transfer by deed to nonprofit
• Wave bye-bye “remainder interest”
• Yet retain “life interest”
• Or, a/k/a Life Estate
• Report upfront, immediate deduction
• Keeps donor paying taxes, maintenance, insurance,
repairs

18. 18
Charitable Lead Trust
Model: Heirs
nonprofit
close of trust
income for
period of years
cash, stock,
real estate
Lead
Trust

19. 19
Charitable Lead Trusts
Fixed or Variable Income To Nonprofit
Charitable Lead Annuity Trust
(CLAT)
• Donor cannot add to it
• Fixed rate (percentage) for
income to nonprofit
• Fixed dollar amount of income
each year
Charitable Lead Unitrust
(CLUT)
• Donor can add freely
• Fixed rate (percentage)
for income to nonprofit
• Variable dollar amount of
income each year due to
annual revaluation

20. 20
Where We Are
√ What is Planned Giving
√ How is Planned Giving done
√ Revocable gifts
√ Irrevocable gifts
√ pay life income
√ don’t pay life income
• Who are the best prospects

21. 21
Who Are The Best Prospects
for Planned Giving
• They love your work
• Age and giving history are meaningful
-- 55-60 & over
-- consistent donors
-- ignore gift size!
• Women in philanthropy, especially Planned Giving
• Look to your board for leadership

22. 22
Where We Are
√ What is Planned Giving
√ How is Planned Giving done
√ Revocable gifts
√ Irrevocable gifts
√ pay life income
√ don’t pay life income
√ Who are the best prospects
• Cases

23. 23
A Small Historical Society
• $250,000 annual budget; 1 employee
• Start with bequest campaign
• Direct mail

24. 24
A Small Historical Society
September 18, 2014
Dear <formal greeting>:
I’ve got important news!
ALBA has kicked-off a bequest campaign to encourage gifts by will. Have you thought about
ALBA in your long-term planning?
What you leave to friends and loved ones and the causes you champion expresses your hopes and
dreams for the future and perpetuates your part in the story of the Lincoln Brigade. As you know,
ALBA is dedicated to teaching about the past so that future generations may know about the
progressive history of the United States. Please help us do this important work. Help us continue
to expand our horizons and support your beliefs. Help us carry our shared legacy to the next
generation and beyond.
As you plan for the future, I ask you to consider a gift in your will to ALBA.
Return the enclosed reply card in its secure envelope to receive more information about a gift for
ALBA in your will. You can also let us know that you have already included ALBA in your
long-term plan. It will then be my pleasure to welcome you to “The Jarama Society,” our
recently inaugurated recognition group devoted to those who include ALBA in their estate plan.
If you would like to discuss a gift like this for ALBA, please call me at 212-674-5398 or email me
at mgarde@alba-valb.org. I will be happy to answer your questions confidentially.
I thank you for considering a gift to ALBA in your will.
With warm regards,
Marina Garde
Executive Director
P.S. Send back your reply card in its secure envelope to get more information about a long-term
gift to ALBA or to tell us you have included us in your will already.

25. 25
A Small Historical Society
• Meeting with the board
• Recognition society
• Keep up the direct mail
• Keep feeding the recognition society

26. 26
A Mid-Size Social Justice Org
• $45 million annual budget in 2007
• Start with bequest campaign
• Direct mail

27. 27
A Mid-Size Social Justice Org
Dear <formal greeting>:
I hope this finds you well.
Like you, I am a loyal supporter of xxxx. I have been giving to the
organization for many years. You and I know this critical voice in support of
dignity, justice and freedom throughout the world must never be silenced. That
is why my husband yyyyy and I have remembered xxxxxxxxx in our estate
plans.
I ask you to consider including xxxxxx in your estate plan. This critical voice
in human affairs must never be quieted.
A gift through your will helps to ensure that xxxxxx’s important work
continues for decades and generations to come.
If you would like more information about including xxxxxx in your will or
other estate plan, please return your reply card using the secure envelope.
Information will be mailed to you.
If you have already included xxxxxx in your plan, please use your reply card to
tell us. We would like to say “thank you.”
I hope you will join yyyyy and me in securing the future of xxxxxxxxx’s work
by remembering the organization in your estate plan.
Sincerely,
zzzzzzz
Board member
P.S. Return your reply card to receive more information about remembering
xxxxxxxxx in your will or other estate plan—or to tell us if you already have.

28. 28
A Mid-Size Social Justice Org
• Multiple meetings with the board
• Individual board member face-to-faces
• They had the recognition society
• Kept up the direct mail for 6 years
• Kept feeding the recognition society
• Expanded to Charitable Gift Annuities

29. 29
A Large University
• $150 million annual budget (est.) in 1998
• Started with bequest campaign in direct mail
• Quarterly newsletter to potential donors
• Concurrent “solicitations” & cultivation
• Expanded into Charitable Gift Annuities
• Expanded into life insurance & charitable trusts
• 12 to 350 donors in 5 years
• $20 million raised in 5 years

30. 30
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31. 31
Continuing Ed.
• Tony Martignetti Nonprofit Radio
-- give me your card
• tonymartignetti.com
• American Council on Gift Annuities (acga-web.org)
• Simple book: Planned Giving Simplified, Robert Sharpe, Sr. (Wiley)
• Advanced book: Planned Giving: A Guide to Fundraising and
Philanthropy, Jordan & Quynn (Wiley)