Planned Giving: Looking Ahead to 2024 and Beyond

Jeremy Stelter: Good afternoon, and happy holidays, everyone. My name is Jeremy Stelter. I'm executive vice president here at the Stelter Company. Thanks for joining us for our webinar today, Planned Giving, looking ahead to 2024 and beyond presented by our friend Phil Purcell, the Territory Director of Planned Giving for the Central Territory of the Salvation Army. I'll get back to introducing Phil in just a minute. But first I'd like to just say a few words about our webinar series. As an expe

rt advocate for asset based giving Stelter is committed to providing innovative solutions and education for the nonprofit industry. We pride ourselves on being a bridge builder for the community and are happy to host this free webinar today, connecting you to experts across the country to assist you in maximizing revenue across your department development portfolio. Jeremy Stelter: Today's webinar is the eighth and the last one in our webinar series this year. If you missed any of them you can f

ind all the recordings on our website at stelter.com/webinars. Jeremy Stelter: As we plan out the schedule for 2024, we'd love your help. Let us know who you would like to hear from, and any topics you would like to learn about in our post-webinar survey. Now back to today's webinar and our presenter, Phil Purcell. Jeremy Stelter: Phil has enjoyed a 30 year career in planned giving, and as a council for to nonprofits. He currently serves as the Director of Planned Giving for the Central Territor

y of The Salvation Army. Jeremy Stelter: In this role he is a directional leader of over 30 planned giving officers in 11 states who close approximately 70 million dollars in planned gifts each year. Jeremy Stelter: He teaches courses on law and philanthropy, nonprofit organization, law and planned giving as adjunct faculty for the Indiana University, School of Law and Indiana University School of Philanthropy. Jeremy Stelter: He currently serves on the Board of Directors, President-elect of the

American Council on Gift Annuities which I get the pleasure pleasure to serve with him, he formerly serves on the Board of Directors for the National Association of Charitable Gift Planners, past Secretary, Charitable Gift Planning Group of Indiana. Past President, Association of Fundraising Professionals, Indiana Chapter, past President. He's a certified Jeremy Stelter: fundraising executive and receive the AFP Indiana fundraiser of the year. Believe it or not, there's a lot more I could tell

you about Phil. He's a legend in this space, and we're just really truly honored that he's joining us today. So thank you so much, Phil. We're excited to hear what you have to say today. Phil Purcell, JD: Thank you so much, Jeremy, for the kind introduction and the opportunity to be with you and everybody on this webinar today. My task, of course, is to look in my crystal ball and peer ahead into 2024 in the years ahead. One thing I've learned, the older I get, the less qualified I feel sometime

s to be a to be a Sengali, let's say, or like that. But we all do form our opinions about the directions that things are going, and we observe the trends of the past Phil Purcell, JD: and can't help but think, what do we need to be doing to be as strategic as possible in our use of dollars and our time and our talents Phil Purcell, JD: to to raise gifts, especially planned gifts for the benefit of the important organizations you serve. So I'll do my very best to give you a number of ideas those

of you who have not heard me speak before. My modus operandi is to usually have Phil Purcell, JD: probably a few more slides than really I can get through. So some slides I'll linger on, some I'll pass over very quickly but you'll be getting copies of all the slides, and you can peruse them in more detail later, as you wish, and I am available if you wanna shoot me an email afterwards, I put my personal email address here to try to keep this kind of work separate from my Phil Purcell, JD: day jo

b Phil Purcell, JD: with The Salvation Army, and also, please excuse me. I am recovering from a cold, so I may pause a minute here and there if if the cold catches up with me a bit. So let's jump in, and I am a baby boomer proudly. Must say I'm a baby boomer and a fan of Bob Dylan. I know some are. Some are not, but you've asked me to speak so I'll share some of my preferences. Phil Purcell, JD: But his song the times are a change, and it's a song I think of quite a bit, are have over the years,

and especially now, as I get older and look backward and forward. Not just in the gift, pond and community, but life at large. But the the phrase of gather around people wherever you roam and admit that the waters have grown, things change, times change, circumstances are different, and our strategies are plan giving strategies. Phil Purcell, JD: It must change with those times to again maximize our fundraise dollars. Phil Purcell, JD: I'll I'll 0 in on 4 broad areas today, looking at the some

issues on the big picture side of things, or what I think of as big picture issues, some topics relative to building relationships with donors. Thirdly, an important subject of dealing with donor intent Phil Purcell, JD: and some ramifications of procedures and policies therewith. And then, finally, some tips or thoughts around what are powerful philanthropic strategies. Moving forward into 2, 2420, 24, and beyond. Phil Purcell, JD: So let's first look at the big picture. One thing I like to say

now is that the time is now Phil Purcell, JD: and I. By that I mean that we have this boomer generation, the wealthiest generation in the history of our country of the world with. By whatever count you look at trillions of dollars in wealth approximately half of all wealth in the United States. Phil Purcell, JD: and an 80% of that wealth in non-cash assets. So this is a very, very important target market. For we, as fundraisers to think about and strategize in terms of our our plan giving solic

itations. Phil Purcell, JD: But as many of these boomers are in retirement or starting their retirement years. Phil Purcell, JD: very important cohort. And it's actually this phrase. A time is now, in fact, was the catch phrase that I used when asking my organization for additional monies this year, and hopefully in future years. Phil Purcell, JD: to help promote plan, giving to convince them of the importance of investing in plan, giving now to recoup the benefits down the road. So in any event

, the boomer generation. Very important, but it's not just a boomer generation prior to the boomers were the silent generation. They have significant wealth still, about 50 trillion dollars. Those are the folks Phil Purcell, JD: born between 1925 and 45. Then we have Gen. X. The millennials following, this isn't necessarily a seminar on the distinct, interesting generational differences in giving and thinking. But I will make reference to some of this a bit. But the time is now to maximize resul

ts. So investing in plan giving programs, marketing, staffing. Very important to take advantage of this wealth transfer. Phil Purcell, JD: Another thing. It's always top of mind is where we at with the with the market. Phil Purcell, JD: I have taught for many years with the Lilly School of philanthropy, and Phil Purcell, JD: one thing I heard loud and clear over many years of working with the econometricians there, and listening to them. Speak that the one single, most highly quarterly factor wi

th charitable giving is the market is the economy, as economy and stock market goes up, so does charitable giving. It can lag, of course, but it is significant. So, for example, here is a chart from the Lily school of philanthropy, tracking giving with Phil Purcell, JD: with market trends, and we see that as market goes up, a giving goes up. We had a dip, of course, in 2022, but we had a tough economy. We had some market ups and downs. We had high inflation, and when individuals, as we all shoul

d know, are scared in the economy, perhaps they're giving confidence goes down Phil Purcell, JD: so the point is as planet fundraisers. We always must monitor the market, be aware of circumstances, but take full advantage of your marketing and asking and soliciting and proposal, giving and visits when market is strong, because that's the good time to ask Phil Purcell, JD: now, of course, as we'll talk a little later. Plan! Gifts are good. Every time any economy, whether it's a good economy, a ba

d economy, any economy is a good one for deferred giving. Of course, this does not impact a current income so deferred gifts. By bequest in a will of trust. Phil Purcell, JD: payment, or transfer on death of a stock or bank account, or real estate designation of life insurance, retirement, plan. Beneficiary. They're they're good all the time I experienced this first hand in during the recession of 2,008. It was very dramatic recession. It wasn't a slow burn. It was a quick, quick Phil Purcell, J

D: fire and we were kicking off. We kicked off a a campaign at the organization I was with at the time a month or so before the collapse. And so we decided, well, we're still gonna have to go out there. We've invested all this in campaign planning. Phil Purcell, JD: So we kind of doubled down on deferred gifts, telling donors that if they needed to reduce their major gift to ask them out, then make up the difference with a deferred gift, or, try to give more from a deferred gift to beef up the p

lan gift goal of the campaign. So the point is, take advantage of strong markets, and when markets go down really really promote heavily the deferred gift ideas. Phil Purcell, JD: another key factor from the big picture side of things is building trust. This was brought home most recently by another Lily school survey of the attitudes of Americans. Towards philanthropy in the non profit sector that was released. Phil Purcell, JD: In 2023 this past year, and I'll make a side note that any Lily sc

hool research that I reference in this presentation is all available at the IU. Lily school website. Be sure to go to the Research Tab, and you can drill down and get Phil Purcell, JD: Pdf, summaries and abstracts of all these different research studies that I referenced. But in this one they were asking key questions, such as the the public view of philanthropy the trustworthiness of nonprofits. And how much do they know about the work of nonprofits? Some very interesting results. One is that t

he Americans public generally do not know a lot about the philanthropic sector. Phil Purcell, JD: They asked about a variety of things like community foundations crowd funding donor advise funds. And you see low levels of of of knowledge. It's kind of interesting. So a relatively small percentage seems to drive the engine of a lot of these gifts. So lessons from this is building awareness or understanding. Phil Purcell, JD: Another lesson learned from this survey Phil Purcell, JD: is the broad a

pproach that most Americans take with regard to their feelings about philanthropy that includes the giving of of treasures along with time and talents, and I think many of us on this call recognize the value of volunteers, and we've heard in other seminars the importance of of especially millennial and younger generations Phil Purcell, JD: thinking about volunteering as the gateway to to their future support of an organization. But giving time, it's a big deal and as well as giving treasure. So

finding volunteer opportunities Phil Purcell, JD: it's easier for some organizations than others, I full well realize. But it's something for you to strategically think about, especially in the years ahead. Phil Purcell, JD: Certainly we're gonna be focusing, as I indicated in the big picture earlier on the baby boomer and and maybe silent generations in terms of of gift planning. But as we look even further ahead in the future, it's gonna be about the Gen. X. And millennials. And so the activit

y of getting them involved now with their volunteer service, can pay off big dividends Phil Purcell, JD: further down the road. So being strategic and creative with volunteer opportunities, can help, build, trust, and and don't Phil Purcell, JD: forget, though, that as you do that find ways for them, maybe to start giving financially as well you might have to ease them into it. But I wouldn't. Leave that out of your strategy. You've got to make sure to build into the volunteer system, maybe a wa

y for them to consider it. At least at small levels building that loyal, loyal annual giving. That's the well spring from which all big plan gets flow. Long time plan giving escort. We all know Phil Purcell, JD: that long time. Loyal donors are number one source for significant plan gifts down the road. Phil Purcell, JD: Another big finding was the lack of trust on this slide. We see that non profit organizations rank highest in trust, but only 39% of those surveyed, said that they completely or

very much trust non profits even. Second was religious. Institutions at 31.3, and on down the line to last place being large corporations. Phil Purcell, JD: This may not shock or surprise all of us in general, but the actual percentages I find of some concern. So one thing I encourage organizations to do, of course, is to think about well, what can we do to build trust? We know we offer our 9 90 forms, you know, that's public information. But what other kinds of activities Phil Purcell, JD: can

we do with one thing we did at the Salvation Army is create an annual stewardship report. It's it's both a thank you to our existing plan. Gift donors, as well as providing some information as well as an opportunity to invite questions and feedback. Phil Purcell, JD: So, as we all know from our families and personal relationships, trust is is all about communication. Phil Purcell, JD: and all organizations on this call must be thinking very strategically about how you are communicating, not wit

h prospective donors only, but also existing plan gift donors, you know, as we know. Through the research of Russell, James, and others, that just because a person has a planned gift doesn't mean they may not consider changing it or revoking the gift down the road. Phil Purcell, JD: So you got you gotta keep in close touch and keep the trust and relationships strong, as I often say to my team with, since so many such a great proportion of our plan. Gifts are revocable requests and beneficiary de

signations Phil Purcell, JD: every year that a donor, especially retired donors, do not revoke a gift will consider that essentially a new gift, I mean, non. Revocation of existing testamentary plans is a big deal, and we need to look at it that way. So we need to invest in stewardship. I mentioned the stewardship report that we're doing. I love the idea of creating a stewardship positions, you know staff members who are devoted to Phil Purcell, JD: stewarding plan, gift donors, recognition soci

eties, making sure all replies to inquiries are followed up on addresses kept up to date event, planning for a small or large groups all sorts of things Phil Purcell, JD: and and just answering questions, and being of assistance very important to steward and maintain and build trust, but be strategic about it. Pick those things that you think might have the most impact on building the trust with your donor base. Phil Purcell, JD: Lots of challenges looking ahead. Transparency is a big deal. And

I think obviously, that's built to trust so building ways and strategies to enhance your transparency through your website through stewardship reporting and your reporting with emails or with meetings or events could be very helpful. Phil Purcell, JD: So the future of philanthropy from this report, emphasize using technology to help play a greater role in being as communicative and transparent to a large number of people as possible. Being strategic on issues of inclusion and and trust building

and connecting with leaders and others. So great report, you can look at it in more depth at your leisure. Phil Purcell, JD: Another big picture topic I would suggest, is the issue of tax benefits. Early in my career when I first got into planned giving. My mentor once told me when I left law practice to get into planned giving. He warned me, said Phil. You know, one of these days Congress is going to take away all those tax benefits, and you won't have anything to talk to donors about. Well, I

dare say that the tax benefits have not been Phil Purcell, JD: taken away, and I've spent quite a career in trying to master my knowledge of those tax benefits. But the standard deduction really has been a fascinating occurrence here in the last few years the standard deduction, as you all know, is now the basic deduction that any taxpayer can play and and claim. Phil Purcell, JD: And in 2024, it's going to increase by about 5 and a half percent to 14,600 for single tax filers, filers, and 29, 2

, 29,200 for married filing jointly. Phil Purcell, JD: So if you claim the standard deduction, you don't need to. You won't itemize. And and so only now, approximately, 14% of our taxpayers annually itemize, and that you have to itemize to claim the charitable deduction, so claiming charitable deductions is not as prominently taken advantage of by our donors as perhaps it once was. Phil Purcell, JD: but it does have had, or it has had some interesting repercussions, such the as the issue of bunc

hing gifts that is piling together a higher quantity of gifts in a single year to have a dollar amount greater than the standard deduction, so that one may therefore itemize. And the donor Advise Fund technique Phil Purcell, JD: is, I'd say, greatly benefiting from the standard deduction. A lot of donors are bunching their gifts and donor advise funds and then granting out over time to fulfill pledges future building campaigns endowment building all sorts of creative techniques. But the tax bene

fit may all be taken in one year. For example, a high income year, the year of a business sale or other high income triggering event in a life. Phil Purcell, JD: and well, perfectly fine. The tax code is there to leave like legally, lawfully take advantage of for your benefit. So anyway, I'd say, tax benefits is something to keep an eye on in this regard. We did have proposed, of course, the charitable act. It has not been passed, and II hope that it might be, and and I hope, with all of your he

lp, support, for it might bring back this universal deduction. Phil Purcell, JD: We had it back in the 80 s. We had it again a year or so ago, and this is not a itemizable deduction. It's a deduction available to any taxpayer, regardless of of income level, regardless of whether one itemizes. And this is a citations for the current versions of the charitable act, and I do encourage its consideration. Phil Purcell, JD: So that's kind of it for some big picture issues that I encourage you to think

about. I'd like to now focus a minute on building relationships as we look to next year and the years beyond. It's all about relationships. If we have to summarize plan giving and fundraising. In one word, it would be relationship. Right? Phil Purcell, JD: So you have to consider the potential of all relationships. I find this very important, as we all know from the giving U.S.A. reports, and these are the summary from the last report that individuals drive charitable, giving 64% of the pie ind

ividuals, another 9% individuals by bequests. And then the foundation's 21%, a vast majority of that family foundations or individuals calling the shots Phil Purcell, JD: the inside foundation. So it's all about individuals. And there's we all have wonderful stories about donors meet Oslo Mccarty now past Phil Purcell, JD: Miss Mccarty worked in the washing and janitorial service, the University of Mississippi. She, was very philanthropically motivated. Phil Purcell, JD: Literally save dimes and

pennies over years and years and would put money very frugal in her bank account, and one day her bank trust officer, said, you know, Ms. Mccarty, you really, Pop? You really have a lot of money in your savings account. Maybe we ought to think about investing or doing something with it. And she mentioned great interest in philanthropic planning and long story short, ended up Phil Purcell, JD: establishing a 6 figure. Charitable remainder trust that she earned were extra retirement income from,

and the beneficiary of, it was a wonderful scholarships for students, just a marvelous story of what one person can do with a with a with a huge love and and heart and desire to help others Phil Purcell, JD: also meet Richard Lee, where, Walter this is an individual who was homeless, who had struck up a friendship with a Phoenix mission. Phil Purcell, JD: and ended up at his passing. Having about a 4 million dollar estate. Leaving A large gift to that Catholic mission as well as to his Alma mate

r's Purdue in ball state. I used to work at ball State. That's how I know this story, you can actually listen to a podcast of this story if you Google, Richard Leroy, Walter, at Npr, and it's only about a 3 min audio, but it's a great story. Phil Purcell, JD: But again, these are. These are faces of philanthropy of folks that you might not normally think of as a significant plan gift donor. Yet amazingly, by the establishment of relationships, you can open the door to wonderful opportunity, you

know. For example, I was just talking to a member of my team today this morning who mentioned that one of their big sources of finding out about plan gifts or leading to plan gifts are, thank you calls. Thank you. Calls. Phil Purcell, JD: For individuals who've made a recent gift. Phil Purcell, JD: who have volunteered, or any one of a number of of reasons that we find it important to call and say thank you to people. So building a relationship out of saying thanks and showing appreciation is a

is a good way to go. But it's all about the relationship, regardless of what the surface or what the individual may appear to be. You never know about that millionaire next door, or that philanthropic heart where you might least expect it. Phil Purcell, JD: Another aspect of of relationships is thinking about partnering with entrepreneurs in my career. Entrepreneurs, of course, are often individuals who've amassed a certain degree of wealth. Of course, by starting a business and being successful

with a business. Phil Purcell, JD: they also like to plan. They typically love to save taxes. And now they might be micromanaging. They obviously sometimes like to tell you what to do and wanna take risk that you may not be comfortable with. So be aware of pre-arranged sale rules and other maybe issues of control that you might bump into with entrepreneurs. Phil Purcell, JD: But, my! Oh, my entrepreneurs have been busy in the social service arena, you know many States have passed a version of w

hat's now called a benefit corporation. This is a for profit corporation, but by virtue of statute it's also devoted to public good as well. Phil Purcell, JD: And what this means is that the shareholders can still earn a profit which may, which makes it different from a non profit corporation. Phil Purcell, JD: But the standard of care for the directors of the corporation Phil Purcell, JD: need not be exclusively maximizing shareholder value. So benefit corporations are a hybrid, unique kind of

for profit entity that does allow for profit sharing amongst shareholders, but also sets a different standard of expectation of the directors that they don't have to maximize shareholder value. Why? Because they're serving some other greater cause. Phil Purcell, JD: you know, Ben and Jerry's ice cream is a good example of a benefit corporation. Phil Purcell, JD: Many of these kinds of entities get a seal of approval called B Corp certification. You can Google that. But these B Corp certification

s are good labels for these kinds of entities to attract Phil Purcell, JD: angel investors, individuals with pools of money who like to invest, but want to invest with a social cause in mind. Phil Purcell, JD: Other examples of this, if entrepreneurs involved in the social service arena is Paul Newman's Newman's own dressing, you know, they got a separate and new private foundation, ruling to provide an exception to the excess business holding rule of private foundation, so that Phil Purcell, JD

: 100% of the business can be owned by the private foundation. So long as a hundred percent of the revenue flows out to charities after expenses and costs are paid, of course, and then, more recently, Patagonia got a lot of press. When the founder of Patagonia Phil Purcell, JD: established a 5, one c. 4, funding it with a large quantity of non voting stock with a separate trust controlling the corporation this wasn't about an income tax deduction, but rather 5 one c. 4 lobbying and political cam

paign activity was kind of this individual's interest. Phil Purcell, JD: But the point of it here is that thinking about and partnering sometimes with entrepreneurs. You know you could together use some of these enterprises, for you know, education of students or for providing services to Phil Purcell, JD: the the the people in need that you're serving so you could come alongside your organization, a benefit corporation, a Vcorp, and together serve a population that interests an entrepreneur, an

d that might leverage gifts to your organization from the same entrepreneur. Phil Purcell, JD: Other issues relative to investment and and entrepreneurs are mission related investments. This is your organization. Taking your money and investing your portfolio, whether it's endowment or not. Endowment in either socially responsible screening or Esg or other kinds of screening. Phil Purcell, JD: either in or out of certain investments. A more proactive type is program related investments. This is

where you're basically granting your charity organizations to other activities, some of which might also involve entrepreneurs. Here's a list of examples of approved program related investments like number 4 investments and businesses in low income areas under a plan to improve the economy of the area Phil Purcell, JD: providing employment training and so forth. So again, this is an example of perhaps a charity. That is part of its mission is to serve the poor needy in an area, might do program

related investment with some of your either gifts or grants from your organization, but also partner with other entrepreneurs in serving these kinds of of needs. Just think outside the box. Sometimes, when you deal with entrepreneurs. Phil Purcell, JD: Another new study by the Lily's school is one that focused on affluent donors. Phil Purcell, JD: affluent donors was defined as individuals, with an annual income of 200,000, or above or net assets of a million or above 85% of them made gifts in

2022 Phil Purcell, JD: and average amount given 34,000, was 35,000, about 13 and a half times greater than the general average. This has been a long time study by the Lily school in partnership with Bank of America. Phil Purcell, JD: Half of these affluent households give to issues. They care most about 70% give to organizations that relate to their personal values or beliefs. So your relationship with these affluent donors is very important, because the way they look at. Their philanthropy is

based on their personal values and beliefs very personally driven. Phil Purcell, JD: and 78% giving is focused locally now, locally, has and can be broadly defined, perhaps to for some people, either within a city, a state, or even the country. But but take a closer look at the study online, and you can learn more. We don't have time today. But another attribute of affluent giving is the use of planned giving vehicles Phil Purcell, JD: 22% of the popular of this survey said, they're currently us

ing a giving vehicle, but 84% said they would use one within the next 3 years. My friends, that's 2024, 2025, 2026. So with the will, the quest being number one. But other kinds of plan giving opportunities there as well. Phil Purcell, JD: This is a crowd that I think is well suited, obviously for planned giving discussions talking about the kinds of vehicles that we are expert in. So take a look at that study and be strategic and zeroing in on affluent households. Phil Purcell, JD: The third br

oad area I'd like to talk about today Phil Purcell, JD: is dealing with donor intent. There. One thing I like to often say about the baby boomer generation is as I distinguish it from my parents, the World War, 2 generation. I often describe the World War 2 generation mantra for philanthropy as I love you, I trust you. Here's my unrestricted gift. Phil Purcell, JD: These are individuals who grew up in the depression. They fought through World War 2 together. They built their homes. Careers put k

ids through college, and so they weren't, as perhaps always as active as a generation in philanthropy as the baby boomers are. Phil Purcell, JD: and I would suggest their mantra is, I love you, but I'm just not sure. I trust you 100%. The boomers are a lot of them. They were the rebel browsers and college and questioning authority questioning institutions. There, II don't have time to go in. I put on this slide a number of court cases and other matters involving scenarios where donors felt like,

perhaps trust was violated or provided evidence of Phil Purcell, JD: of lack of trustful fulfillment by an organization. A very complicated cases don't have time for it, but feel free to to look them up at Google and read more A as you as you can. But but consequently the boomers quite often asked strategic questions. You need to have answers to their questions, and if you don't answer those questions adequately, you may not get the kind of gift that you might otherwise. Phil Purcell, JD: So he

re's a list of key questions, what differences that that these baby boomer donor donors especially might be thinking of. Phil Purcell, JD: What differences do I hope my gift will make? Who do I know and trust again? Trust a big issue? Will there be fees? What are they? What happens if my intent is not honored? Do you do a gift agreement? How can I be confident that my intent will be fulfilled? But so Phil Purcell, JD: just some important questions to think about. Phil Purcell, JD: so implement b

est practices would be a recommendation in the years ahead to safeguard donor. Intend to assure donors that you will honor their wishes. Do an inventory of your existing gift. Documentation, copies of wilbequest, gift, agreements, endowment, agreements. What are your policies and procedures for gift acceptance? How is negotiation? Handled what is it? Do you have a naming recognition policy? What is your policy for documentation? Phil Purcell, JD: Thirdly, again, stewarding these donors, we talke

d about stewardship earlier, very important. And then can you make amendments pursuant to applicable State law? Phil Purcell, JD: Here are some good resources, the philanthropy, Roundtables put together, some how to guides for creating intentional thoughts by donors around mission statements where they're giving or safeguarding their gifts. You might take a look at this, a collection of great resources at the website on this slide. Phil Purcell, JD: So quite often, especially if you're an organi

zation that has endowments. And and one thing you realize with endowments and larger gifts sometimes is that endowment is meant to last forever and forever is a very long time, and what can change over the course of forever is Phil Purcell, JD: is unlimited. I mean everything kind of changes. So II think a buzz light year, and his mantra to infinity and beyond when I think of endowments, but I also realize that with this concept of infinity can be trouble because things can do change. So Phil Pu

rcell, JD: all I wanna share here is that 49 of the 50 States have passed a version of the uniform prude management of Institutional Funds Act. Within that State statute are 3 different protocols for Phil Purcell, JD: making a change actually for that. Allow for a change. For example, if a donor still alive and you had a sign, gift, agreement and endowment, agreement, and the like. With the consent of the donor and your board of directors, you can. You can edit or make a change to the terms of a

ny gift Phil Purcell, JD: with in cases where the donor is dead, or perhaps disagreeing, you can go to court and and request a court order with notice to the Attorney General. I've done a number of these kinds of actions. And typically I like to to get a buy in from the Attorney General a review of the petition before I file it with the court, so that I address ahead of time any concerns the Attorney General may have. Phil Purcell, JD: and in most States. If the fund is below a certain dollar th

reshold, like 200,000 or $100,000, and has been around for a number of years, usually about 20 years. A court order is not necessary. Simply notice to the Attorney General. Phil Purcell, JD: and these kind of changes are changes to purpose or changes to mechanics. Phil Purcell, JD: So either the purpose might be, you know, times may have changed in that original purpose, like a gift set up for young women study secretaries 50 years ago, not maybe relevant today. Phil Purcell, JD: So we need a ch

ange in purpose. Or maybe a donor set up an endowment with specifying a spending rate of $100 a year. Well, $100 a year doesn't buy anything anymore. And if the fund has gotten really big, you need to change. That's a mechanical change so changes to purpose, changes to mechanic, and all be accomplished Phil Purcell, JD: through this kind of variance. Hello! Excuse my cold. Phil Purcell, JD: I'd like to end before we open it to questions and answers Phil Purcell, JD: with the fourth broad area, d

iscussing some opportunities for powerful philanthropy in 2024, and beyond. Phil Purcell, JD: First and foremost, II hope everybody in this call has been introduced. The idea of gift blending and blending the power of the pyramid. As we all know, fundraising is in a sense a pyramid scheme in a good way. We try very hard to get first time donors into our full, and then through good work we get them to repeat and hopefully become loyal donors. Phil Purcell, JD: And then sometimes from this pool of

loyal donors over time, come major gifts. Of course, many major gifts come from outside the pyramid as well. They don't all bubble off from loyal donors. Phil Purcell, JD: but at the top of the pyramid, of course, are plan gift donors, and there's several secrets to this pyramid. Phil Purcell, JD: Number one is. There is a high correlation statistically between the loyal annual giving crowd near the bottom of the pyramid and the plan giving crowd at the top. Phil Purcell, JD: So obviously, you'

ve got to track your donors, identify who are the longtime loyal donors, and be sure that they receive information about, and and you appeal to them to consider a planned gift from their estate. Phil Purcell, JD: In addition, though, you don't forget about major gift donors, because quite often they are invested in your organization Phil Purcell, JD: now, many campaigns to day, whether it's comprehensive campaigns, capital campaigns, program, specific program campaigns will have blended goals, a

current outright cash cash goal and a deferred gift plan goal. Phil Purcell, JD: And so gifts or requests of donors can include a mix of a of a cash gift, a pledge of a cash gift to help satisfy the cash gold and then supplementing the cash gift for the planned gift down the road Phil Purcell, JD: to help with programs or endowments for that for for that purpose in the future. Phil Purcell, JD: This takes a lot of strategy. Now, sometimes you may not want to ask for the plan gift at the same ti

me as the cash gift. The plan gift, ask, can be a follow-up subsequent ask, depending upon what the donor says relative to the cash gift. But if the donor said yes to a cash gift, ask, and can always go back later, ask them to supplement with a plan gift that doesn't cost them any more money. Now. Phil Purcell, JD: if the donor says no to a cash gift, well, you can come back with a request for a planned gift because it doesn't cost them any money now. Phil Purcell, JD: Oh, or if the donor says s

ome value, you compromise at some value less than the ask for amount. Maybe a planned gift can supplement or make up the difference. But the point is, we have to think strategically and not in silos. Between blended major gifts we've got to integrate to be as effective as possible. Phil Purcell, JD: I'd say another powerful technique moving forward obviously, is maximizing donor advise funds, as we all know, billions of dollars in daf, this bunching idea to adamize and grant later, very popular,

amazing levels of grant making during Covid lots of great research showing. Grant, making out of donor, advise funds much greater than the 5% required of private foundations Phil Purcell, JD: also, law now permits donor advise funds to satisfy charitable pledges, happy to share that law and talk about to anybody who has a question about it. And furthermore, if you're getting grants of donor advice from from donors. Then. As long as they're not anonymous I do. I recognize that some are anonymous

, but that's a minority. Phil Purcell, JD: Make note of those people, and you can go back to them and suggest that. They could name your charity for the residual of the Daf. When the donor advising ands most sponsoring organizations, asked donors for these kinds of recommendations, and those were, those are revocable. If a donor requests a sponsoring organization to to add your organization in for the residual, or replace another with you. I dare say that would likely be approved by the sponsor,

most likely Phil Purcell, JD: depending upon circumstances. I understand there are a lot of nuances here. Phil Purcell, JD: but the point is, oh, think of the residual. The daf is another kind of deferred, planned gift. It's not just the money you get now from the daf. But money that might be there later, because, look! We never know when we're going to be. Our days are done, and so the fact is, the daf may not be empty when the donor dies. So you've got to account for the residual Phil Purcell

, JD: we did have the Ace Act that was talked about for a couple of years. But it's not received support from the charitable community. It was an attempt to force out payments from Das by setting a specific spend rate. It's not been supported primarily because the grant making from Das has been extraordinarily high and not problematic. There's not a problem. Broad-based problem of stockpiling. Phil Purcell, JD: So it's it's kind of waned. I would say we do have some pending new proposed staff re

gulations that are have been released here in the last couple of weeks. Phil Purcell, JD: And it's it's got some problems in it. And I'm working behind the scenes to send comments, because 1, one proposed regulation is to define investment advisors as donor advisors. I'm that could have troubling repercussions for many community foundations. Another troubling aspect is a designated fund for a single entity. If the donors set up, the designated fund is also on the board of the designated charity.

Phil Purcell, JD: then that would be deemed to death, which would be very problematic, especially for rural share. Rural community foundations where you know. Everybody's on the board now and again, and and and it would be very problematic and would make the the designated fund disqualified for Ira charitable Rollover gifts, by the way. Phil Purcell, JD: And then there's an exception in this. Regs. For committee. Advise scholarships, but only for 5, one c. 4, and there's no reason not to expand

that to others. So there are some improvements that could be made to those proposed regulations. Phil Purcell, JD: Obviously this has been talked about a lot, but powerful philanthropy through non cash gifts. One of my very first slides. 80% of the wealth of the brewers. Non cash. Get non cash assets. You've got to be facile, ready, and willing to consider non cash gifts. You don't have to take every non cash gift that comes down the road, but at least have the conversation get independent coun

sel to help you think through the and not just an automatic. No. Phil Purcell, JD: again, as wealth goes up, so do the type and and allocation of your non cash assets. So the top 20% has a lot, you know, a fourth in real estate about a fourth and retirement pension funds financial securities, about 20%, and so forth. Phil Purcell, JD: But for the the ultra wealthy top, 1%, you can see that business equity is a half or more of their wealth. So now, privately held, stock becomes a big deal. Still,

a lot of real estate, financial investments, retirement plan and the like. Phil Purcell, JD: But you gotta be open to the non cash cash gift conversation, public stock traded stock privately held stock real estate, especially farmland gifts of grain for those in rural areas. You've got to be knowledgeable. The Irs forms 83, 82, 83 and 82, 82, and the gift receipt publication, 1771 and publication 5 6 one determining value donated property. Phil Purcell, JD: Be aware of these rules that are here

in these publications and forms, and promote non cash gifts. Phil Purcell, JD: I I'd be remiss if I didn't say, consider a charitable gift annuity program if you don't have one, and if you do have a gift annuity program, the rates are increasing as of January one the actual rates themselves won't appear till later this month, if not till the end of the month, depending upon whether you're a member or not. A member. If you're a member, you'll find out December eighteenth. But the website here is

where you'll go to see what the new rates are. Phil Purcell, JD: But one trend we're noticing with gift annuities is an increasing use of gift annuities by donating Phil Purcell, JD: non cash gifts like stock and real estate. I'm working on my third large farmland gift for a gift annuity right now, and this is the third, and about a 2 year timeframe a little less. So. My point is that a lot of the boomers and others are thinking of larger gift annuities in a hundred $1,000 plus range with non c

ash Phil Purcell, JD: assets, whereas the World War 2 generation generally thought of cash gifts at smaller dollar amounts like 10,000, 25,000, and repeating, let's say so. The scene has changed with regard to gift annuities a bit, and I encourage you to take a look at them. Phil Purcell, JD: Of course, retirement plans we've really gotta. You've really gotta focus on on on donations from retirement plans. Of course, the beneficiary designation at death. It's a big deal. Phil Purcell, JD: Obviou

sly a gift from a retirement plan is the most tax wise gift to make a death. The heirs escape the income tax liability. Leave the assets to the kids because they'll get a step up in basis and will escape the capital gains tax, leave the retirement plan to charity, and the heirs escape the income tax liability. Phil Purcell, JD: So retirement, plan to charity. Death assets to the kids. It's a wonderful technique to promote your donors. Now beware! We've got a problem nationally with a slow delive

ry of these retirement plan beneficiary gifts. The Rift project Johnny Hayes and others have undertaken for our benefit is very important. Phil Purcell, JD: Go to this website, take a look at it. Try to get engaged because there there is an historic problem and getting the money out of the retirement plans after the death of the donor as readily as we need that money. So that's an ongoing conversation beyond this. But I wanna make you aware of it. Phil Purcell, JD: Another planning, of course, t

echnique with retirement plans is the stretch opportunity, you know, the secure act cap, the payments to kids at 10 years and lawns, the moms and dads, grandmas grandpas want more than 10 years. So that testamentary gift for retirement plan to assure remainer trust or gift annuity very popular, stretching out those payments. Because, you know, moms and dads often don't trust Johnny or Suzy Phil Purcell, JD: in their thirties, forties, even fifties. And they want them to be assured of getting an

ongoing income stream. So testamentary designations with a retirement plan for a Cga or a CRT. Phil Purcell, JD: Of course we love the Ira charitable Rollover, also known as the qualified charitable distribution. Phil Purcell, JD: The new, you know. The law last year passed allows for an inflation adjustment. So for 2024, the Ira Rollover, Qcd. Amount is going to be 105,000. Remember, these are individually owned by husband and wife, so from each Ira of husband or spouses, each spouse can give u

p to 105,000 in 2024. Phil Purcell, JD: Of course we have also the Qcd. For a charitable gift annuity or charitable major trust this is a one time. Use gotta use it but the but the cap has also been adjusted for inflation. Phil Purcell, JD: and it'll be a 53,000 in 2024. It's gonna go up a little bit every year after 2024. This is a technique attractive for gift annuities. I've done several of these, but not charitable Maynard trust the 50,000. Now 53,000 cap is too small, in my opinion, for cha

ritable remainder trust we could lobby all of us for improvements to this law, to to allow for a multi year opportunity rather than a one time. Phil Purcell, JD: 50,000 within one year cap, and a higher annual maximum instead of 50. Why not a hundred 1,000 make it more attractive for crts? Those are just 2 ideas to make this law even more attractive. Phil Purcell, JD: my friends, as I started this presentation. My overall theme for you is, the time is now. The time is now for plan giving, invest

in plan giving, and and in 2024 and beyond, I think you'll see wonderful results, as my friend Bob Dylan says, as the present now will later pass, the order is rapidly fading. Phil Purcell, JD: and the first one now will later be last. For the times there are changing, and if you want your organization to be first in line down the road. You've got to change with these changing times, and be ready for the future. Thank you so much for your time and attention. We could take a few questions. Jen L

ennon: Thank you so much, Phil. Jen Lennon: We do have a lot of questions exploded about the daft Jen Lennon: people want to know about the deaf. So before I ask you that real quick, I want to let people know that. We do want your Jen Lennon: input for our webinar series next year, as Jeremy said in the beginning. So on the post Webinar survey that will pop up when you leave. You can just put that in the general comments at the end. There's an open, ended form for you to to put any comments you

can put those in there. Jen Lennon: Great. Thank you. Okay. So Phil, dafs, we just want to make sure. First of all, did you say the daft's can satisfy charitable pledges? Phil Purcell, JD: Yeah. Ours noticed 2017 73 2017 day 73. You can google it? And Phil Purcell, JD: it, it actually, what's fascinating about it? It's a notice which normally, you think of a notice is just saying, here's our, here's our notice. But in that notice it said, taxpayers can rely on the provision in the notice that Ph

il Purcell, JD: pledges can be fulfilled. Phil Purcell, JD: So it's a and and I'm on an American Bar Association Committee and met with Treasury last year and raised this question. I said, many, many daft sponsoring organizations are still nervous about fulfilling when they find out about a pledge Phil Purcell, JD: and and the response I got was. well, we said they could in the notice. What more do you want us to say Phil Purcell, JD: now? So it's very clear in Irs. Notice 2017 73 and I've heard

it spoken to me as Phil Purcell, JD: As plainly as that. I don't know what more to say now it's wonky. Phil Purcell, JD: and the problem with it is when the sponsoring organization makes the the payment. The the law says they cannot reference that it is a pledge payment. Phil Purcell, JD: so the charity, the recipient, can have a pledge on the books. They get the the grant, but the grant cannot reference the pledge, but they can write down the pledge and keep a current pledge on their books. So

what's got to have to happen is the donor is going to have to communicate to the charity. Oh, my daf is Grant is for a pledge, or when Charity gets a death, Grant realize it's from Bob. See that Bob says a pledge you call Bob and say. Phil Purcell, JD: Bob, is this to pay down your pledge? If he says yes, you can do it. So there it is. I could talk endlessly about it with more historic background. But that's the the knob of it. Phil Purcell, JD: Okay, I think you covered most of these. Is it so

mething that changed recently, or is that been there the whole time? Well, the notice 2,017. This is 2 0 1 7. So it's been out there a while, and it. It had a period of comments and so forth. But it's been slow, because it was Phil Purcell, JD: so astonishingly different than what the especially community foundation field had been Phil Purcell, JD: had been thinking the worry, if the former worry was that a death is not owned by the donor, so how can a donor Phil Purcell, JD: use an asset pool l

ike a daft that they don't own anymore to satisfy a pledge that's binding to the donor, not to the sponsoring organization. Totally understand that. But think about it a minute. We're able to send a missile to deflect the trajectory of an asteroid in space from hitting earth. And yet we could not put donor advise funds and donor pledging together in the United States of America. How do charities raise money pledging? Phil Purcell, JD: How do? How are billions of dollars, of of gifts given throug

h donor advice funds. If we can't put these 2 together, it's a serious disconnect in philanthropy, in my opinion. And so what this law has said, is, you can do it. You got a daff. You can satisfy a pledge. It's just when the sponsor organization says the Daf. Grant. Phil Purcell, JD: they can't reference the the pledge in the letter. Alright fine. Okay, if that's if if that's all you have to do to make it happen. That's okay. But there are sponsoring organizations who are still reluctant to do i

t. But many are getting on board with it. And I talk about this all the time. Phil Purcell, JD: But again, you can. Google Irs, notice 2017 73. Read it for yourself. Jen Lennon: Great thanks. And I think I think you covered mostly what people were asking. And I think if they have further questions about that, they can reach out to you through the email that's on the screen. So, Jeremy, did you have one? I have one here, too. Yeah, thanks, Jen. You know. Great job, Phil, especially considering yo

u're finding a head Co really appreciate you jumping in and helping us out today. Jeremy Stelter: A a good question here about resources. What is your go to source to track or to monitor pending legislation, affecting plan giving you mentioned Acga, you mentioned charitable Gift Planners Association. Where do you go, Phil? Phil Purcell, JD: Well, you you gotta Phil Purcell, JD: You gotta understand. I'm online all the time. So II sign you can get email blast, you can go to the taxi Irs tax exemp

t website, Irs tax exempt sign up for an E Nu EE. Mails, and and that sometimes has things. It's different sources. So I get as many multiple sources. It's not maybe one single source. So Cgp National Association of gift planners, American counsel and gift duties. They're good sources. The Independent Sector Phil Purcell, JD: Council on foundations Afp. If you're A or HP. Depending upon what organization you're in. Of course you can track bills@congress.gov, if you know the bill number is the Se

nate or House number. You can track the bill. And you can sign up for email blast based on those bills. So if you want to track a bill and have emails sent to you go to congress.gov, get in there and sign up for email blast to follow bills. Phil Purcell, JD: Those would be the main things I do. I? I'm on a lot of email lists asking for asking for these kinds of notices. And then I proactively, every so often go out and look myself@congress.gov. And Phil Purcell, JD: and and they were asking coll

eagues. that's what I do. It's wonderful. Jeremy Stelter: Jenna got another one here kind of just a broader question kind of jumped on on the first part of the webinar here. Do you have a good reference for how to value plan just for accounting purposes? Jeremy Stelter: Was the question, Phil. Phil Purcell, JD: Right Phil Purcell, JD: what? I'm old, so forgive this little longer answer. But Phil Purcell, JD: the way I like to look at this is beauty is in the eye of the beholder. Phil Purcell, JD

: So how you regard a plan gift depends upon your perspective. Right? So if you're an accountant and you wanna value plan gifts, you gotta follow generally for most nonprofits, financial accounting standards, board standards asby. Phil Purcell, JD: Now the Fasby standards talk about present value for the the split interest guests and I. We don't have time to go into great detail, but Fasby for the accountants. Now there's Gaddi for the government group, and so forth. The Fasb is the main one. No

w look, if you're talking about Mo. Measuring for either metrics. Phil Purcell, JD: for individual staff performance or goal setting for an annual goal or campaign goal, there are 2 different sets of standards by the National Association of Charitable Gift Planners. There's the then go to the Google, go to the Nacgp website Phil Purcell, JD: and go to their standards and you'll find them right there. And and they have standards on metrics for gift planners. This is performance metrics, goal sett

ing standards. Those are 2 separate things. They also have interesting standards on financial evaluation of gifts. How do you value like the interest that's beyond the present value thing as well as life insurance stuff. So lots of good stuff. There. Now, there's another one is Phil Purcell, JD: tax rules. Now, the way the Irs values is is gonna be driven by Federal tax law. So, my friends, you, you know, crescendo and pgal, can other vendors have wonderful calculation tools? The law is very cle

ar on what formula you use, and and that's pretty generally black and white, with a lot of nuances, of course. Phil Purcell, JD: So it's all about perspective and what what you're counting, and at what and what you're counting it, or what purpose, whether it's accounting metrics, goal setting tax deduction of the donor. Phil Purcell, JD: Different different go-to resources. Jen Lennon: Alright, thank you, Phil. Jen Lennon: We are out of time. So I just wanted to say there was a couple of additio

nal questions in there. If you would like to reach out to Phil personally, he invites that his personal address is on the screen. You can also reach out to Jeremy or myself. Jen Lennon: Emails are on the screen. And then one last note is that we recorded the webinar today, and we'll have that along with the handouts available for you,tomorrow, on stelter.com/webinars, I will send out a personal email to the whole group to let you know when it's there, so you can look for that. Jen Lennon: and th

at's it for us for today. And, like Jeremy said, this is the last webinar we have this year. So thank you everyone for joining us throughout the year. We've had a wonderful roster of presenters and couldn't end Jen Lennon: with a more respected voice today with Phil Purcell. Thank you so much, Phil. Jen Lennon: Happy holidays, happy holidays! Happy New Year, everyone happy holidays! We'll see all next year. Bye, bye.