Bequests: Defining your Bequests: Defining your LegacyLegacy

March 29, 2011 Prepared for the CLL by Lisa Radetski, Director of Individual and Planned Giving

What is a bequest?What is a bequest?

A bequest is a gift through a will or estate plan to a specific recipient. A charitable bequest is a transfer of assets or property at death by will to a non-profit organization or organizations for charitable purposes.

Why make a bequest gift?Why make a bequest gift?

Leave a legacy that expresses your core values

Support good workMake a gift with no

decrease to your current income

Reduce taxes If you do not have heirs,

make a gift in lieu of your entire estate going to the government!

U.S. Sources and UsesU.S. Sources and Usesof Charitable Contributions, 2009of Charitable Contributions, 2009 Source: Giving USA Foundation/Giving USA 2010Source: Giving USA Foundation/Giving USA 2010

Individuals74%

Bequests8%

Corporations5%

Foundations13%

TOTAL GIVING $303.75 BILLION

* Data for grants to individuals: Giving USA estimate** Includes gifts made in prior years but claimed in tax deductions this year in “carry over,” gifts claimed by donors at a value different from what the nonprofit receives (in-kind gifts), and gifts to new organizations not categorized in time for the survey.

Arts/Culture4%

International Affairs

3%

Public/Society Benefit

7%

** Unallocated Giving

9%

Gifts to Foundations

10%Grants to Individuals *

1%

Environment2%

Health7% Human

Services9%

Education14%

Religion34%

How do I make a charitable How do I make a charitable bequest?bequest?

Contact your attorney to draft a will with a charitable provision or add a codicil to your existing will. If you do not have an attorney, contact the Attorney Referral Service of the Chicago Bar Association for a referral

What are my options when What are my options when making a bequest?making a bequest?There are many ways to structure your

charitable bequest. Talk with your attorney about these options:◦ A specific asset or dollar amount◦ A percentage of the residue of your estate◦ Contingent bequests

Unrestricted v. Restricted◦ Unrestricted: wherever needed most at the time◦ Restricted: only the income is to be used with the

principal held in perpetuityUndesignated v. Designated

◦ Undesignated: for any purpose◦ Designated: for a specific program or purpose

How are bequests used?How are bequests used?Fourth Church unrestricted

and undesignated:◦ First $10,000 goes to the

Joint-Finance discretionary fund that is used to fund unbudgeted needs throughout the year.

◦ A small portion has been used in some years to fill budget gaps.

◦ Remainder is put in our invested funds which we treat as endowment.

CLL Unrestricted◦ Generally to the invested

funds supporting the CLL◦ Can be directed by the

Fourth Church Board of Trustees to where it is needed most at the time, including to current annual operating needs.

Restricted◦ Gift principal is held in

perpetuity and income is used to support the CLL.

Where the money comes from and where it goesWhere the money comes from and where it goes

Resources Disbursements

Members and

Friends56%

Income from

invested funds20%

Program Fees13%

Chicago Lights Grants

6%

Other 3%

Lilly Grant 1%

Day School and

Counseling Center

1%

Please note that on the receipts side:Other includes interest income, vending machine income, administrative charge-backs to Chicago Lights, the counseling center and the Day School, and partial use of unrestricted bequests for operating purposes.Member and friend giving includes pledged gifts, loose plate gifts, restricted gifts, and any gifts received by the church or Chicago Lights not associated with a pledge.

What size does a What size does a bequest bequest need to be?need to be?An unrestricted bequest gift can be any

sizeIf the gift is restricted or designated to

support a specific whole program, it will be used that way.

If it is a new initiative, it would need to endow the operating costs of that new initiative , be in line with the mission and goals of CLL and Fourth Presbyterian Church, and be $1 million or more.

How do I put it in my will?How do I put it in my will?

Unrestricted:◦ I give the sum of $________ to Fourth Presbyterian

Church of Chicago, located at 126 E. Chestnut Street, Chicago, Illinois, 60611 to be for its general purposes (or describe a specific purpose, like CLL, if desired).

Restricted:◦ I give to the Fourth Presbyterian Church of

Chicago, located at 126 E. Chestnut Street, Chicago, Illinois, 60611 the sum of $____________ to be used as a permanent endowment, the income only from which shall be used for its general purpose (or describe a specific purpose).

What should I state in my What should I state in my will?will?

The entity to which you are making the bequest (Fourth Presbyterian Church of Chicago or CLL)

The amount of the gift, or percentage of your estate or contingency

If the gift is restricted and/or designated, ◦ You must state the specific purpose the gift is

to be used for◦ You should include a provision for the event

your gift cannot be used for that stated purpose, commonly known as “safety language”

Should I notify anyone?Should I notify anyone?

Yes! At a minimum:◦Executor of your

estate◦Your family◦Your attorney and/or

financial planner or advisor

◦Best practice is to also inform a charity if your intent is to make a bequest

Can you recommend a Can you recommend a lawyer?lawyer?No. However, at your place is a card which lists:◦The Chicago Bar Association’s Attorney Referral Service phone number, email address and website

◦The Financial Planning Association Referral Service phone number and online interactive referral website address

Are there any drawbacks for Are there any drawbacks for me?me?No! Here are some advantages:

◦You get to make a gift without sacrificing current income

◦You will make a difference in the mission of the CLL or other charitable organization

◦By letting the charity know, you will be appropriately thanked and recognized

Question & AnswerQuestion & Answer

Thank you!Thank you!Planned giving brochures

availableHandout with sample bequest

language and resources for legal and financial planner referrals is at your place

If you have questions later, or would like to speak privately, please take my card and feel free to call: 312.981.3380.