Norton Healthcare Foundation

Values-Based Legacy Planning

Presenters: Lynnie Meyer, MSN, R.N., CFRE

Dave Smith

Copyright 2013@All rights reserved.

Norton Healthcare

Facts and Figures

• Norton Healthcare System includes five hospitals: four adult acute

care hospitals, Kentucky’s only free-standing children’s hospital,

and more than 60 physicians’ practices.

• 44 percent market share in Louisville – Market includes three

hospital systems and one academic hospital.

• Kosair Children’s Hospital (KCH) serves as the primary pediatric

teaching facility for the University of Louisville.

• Strong long-term system leadership.

State of Development Office in 2008

• Two foundations – Norton Healthcare Foundation and Children’s Hospital Foundation supporting Kosair Children’s Hospital.

• Previous foundation leadership had not capitalized on donors with significant giving capacity and strong ties to the system.

• Kosair Children’s Hospital was not recognized in the community as a leading philanthropic enterprise.

• No transformational or lead gifts to system to date.

• Limited number of $100,000 gifts to date.

• A large number of small, consecutive-year giving donors.

Norton Healthcare Total Giving History

Core Principles for

Development Program• Professional Staff – experienced, committed, and

proactive in building donor relationships at every level

• Internal Leadership – can articulate a compelling vision, enable

excellence, build trust, and ensure that each gift will make a

difference

• Sustained Resource Investment – investment in advancement

programs and infrastructure, strategic communication,

engagement initiatives, and in the professionals who drive them

• Time – cultivate relationships, educate investors, and orchestrate

their involvement and continuing investment

Benefits of Legacy/Charitable

Estate Planning Model• Innovative

• Puts donors’ families first

• Helps donors discover what is important to them

• Puts legacy gifts in context of the whole of one’s estate

• Promotes culture of philanthropy within Norton Healthcare System

Influencers

Legacy/charitable estate planning model was new to Norton donors.

Initial goal was to indentify prospects for legacy planning model who

would influence other donors.

• Internal Influencers

• External Influencers

• How to Get Influencers Involved in the Planning Process

• Influencers Provided Springboard to Successful Execution of Model

U.S. Trust Survey

• Wealthy donors do not think that their financial advisors broach philanthropic planning as quickly as donors would prefer.

• When advisors discuss philanthropy, they discuss taxes and technical aspects of vehicles rather than focusing on donors’ passions.

The Planned Giving Discussion

“If you will determine what’s important to you before what to do, then your children will survive, your family will thrive, and society will benefit.”Charlie Collier, former Senior Philanthropic Advisor, Harvard University

Legacy/Charitable Estate Planning Model A donor-centered legacy planning process that helps donors articulate their family, financial and philanthropic legacies in accessible language.

Discovery

1. There are multiple goals for estate planning, among them the following. Rank all four goals in order of importance to you. 1 = most important, 2 = second most important, 3 = third, 4 = fourth.

__ To ensure lifetime financial independence __ To maximize inheritance for heirs __ To minimize estate tax liability __ To make gifts to charity

Discovery Questions

Financial Legacy

1. Which statement most closely reflects your definition of financial independence?

__ I do not know if I am financially independent.__ I am not financially independent.__ I am financially independent but not wealthy.__ My present income and assets exceed what I need for financial

independence.

2.What is the amount of your current excess income or assets (if applicable)?

Approximate amount of excess income $____________ Excess assets valued at approximately $____________

3.Is there a minimum and/or a maximum amount of wealth you want to leave heirs?

Minimum amount of wealth I want to leave heirs $____________

Maximum amount of wealth I want to leave heirs $____________

4.If you could allocate your estate to beneficiaries at your death any way you want among the following choices, (excluding your spouse, if applicable), what would your ideal allocation look like?

__% Taxes __% Heirs (children) __% Other heirs __% Philanthropic giving __% Other (please specify)

__________________

Family Legacy

1.To whom do you feel a sense of obligation when it comes to the distribution of you wealth? Check all that apply. Then rank the five that are most important to you in order of importance from 1 to 5 (1 = most important).

__ __ Spouse __ __ Parents __ __ Children __ __ Stepchildren __ __ Grandchildren __ __ Step-grandchildren __ __ Other (please specify) ____________________

2. You may be concerned that your heirs lack the necessary skills to preserve and manage wealth. Which statement represents your view?

__ I believe my heirs do not have the necessary skill to preserve and

manage assets and/or wealth. __ I believe my heirs do not the necessary skills to preserve and

manage assets and/or wealth. __ I am unsure of the skills and ability my heirs have to preserve and

manage assets or/or wealth.

Data Point67 percent of wealthy Americans want to leave heirs an inheritance; however, the majority of these parents do not believe their heirs have the capacity to manage a large inheritance. (2013 U.S. Trust INSIGHTS ON WEALTH AND WORTH)

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Social Capital Legacy

1.Which statement most closely reflects your thoughts regarding the transfer of charitable gifts through your estate plan? Check only one.

__ I have no intention of making charitable gifts through my estate plan.

__ I would rather make gifts to charity than pay significant transfer taxes.

__ I would consider charitable gifts as long as my intended family legacy

is not compromised. __ I want to make charitable gifts the

focal point of my estate plan.

2.What organization(s) would you like to support through your estate plan should you determine to make testamentary gifts?

_________________________________ _________________________________ _________________________________

Data Point

38 percent of wealthy donors tell us that they have a responsibility to charity or philanthropy even though neither are options on our questionnaires.

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Philanthropic Legacy Worksheet• Community Philanthropy

• Formative Philanthropy

• Mission/Passion Philanthropy

Clarity Write a Family Financial Philosophy (FFP) for

individuals, couples or families.

• Four-section document

• Provides comparison to existing documents

• FFP details a donor’s legacy objectives in accessible language

• Provides a map for recommendations

Donor Decisions Recommendations

• Model existing documents based on current tax law and

donor’s net worth

• Compare existing documents with donor’s FFP Identify gaps

• Model recommendations that include present-value calculations

Implementation

• Donors’ consult with advisors

• Attorney and other advisors provide feedback with regard

to Heaton Smith’s recommendations

• Attorney executes all documents

• Donors add nonprofit organization to beneficiary designation

form of retirement assets

Case Study

• One child

• Heir participated in planning process.

• Haas’ passionate about helping individuals suffering from

neurological diseases and brain injuries.

• $3M planned gift will endow two clinical and research chairs at

the Norton Neuroscience Institute: one for Parkinson’s disease

and one for epilepsy.

Case Study• Physician and her husband practiced medicine at Norton Healthcare

for three decades.

• Her specialty – anesthesiology

• His specialty - pathology

• No children

• Supported Norton Healthcare Foundation for multiple years

• $8M total gift

• $3.0M naming gift – the Cressman Critical Care Unit at the new Norton Women’s and Children’s Hospital

• $5.0M naming gift – Cressman Parkinson’s Center at Norton Neuroscience Institute

Consecutive Year Giving Donor• Single

• Two heirs

• Affinity for Kosair Children’s Hospital

• $2.4M unrestricted gift to support Kosair Children’s Hospital

The Wade Mountz Heritage Society Story Naming of the Wade Mountz Heritage Society

• The society was named in honor of Norton Healthcare President

and CEO Emeritus, Wade Mountz and embodies many of his core

values, such as vision, leadership, integrity and commitment.

• Mr. Mountz served for more than four decades in leadership

roles in the Louisville healthcare community.

• Mr. Mountz is a former chairman of the American Hospital

Association, and when he was named as chair, he was considered

one the best healthcare system CEOs in the country.

Wade Mountz Heritage Society Requirements• Irrevocable planned gift

• Minimum $100,000 planned gift

• Sign an irrevocable estate pledge

Wade Mountz Heritage Society Structure• Irrevocable planned gift

• Minimum $100,000 planned gift

• Sign an irrevocable estate pledge

• Annual classes

• Aggregate gift amounts classes from 2008 to 2014 range

from $3.3M to $12.0M

• Society commitments since 2008 total nearly $33.8 million

from 63 families and/or individuals

• Gift totals represent inter vivos trusts and irrevocable

commitments.

Annual Recognition Dinner

• Current and previous inductees invited to formal dinner

• Host annual event at fresh new venues or classic local establishments

• Include prospective planned giving donors

• Tell donors’ stories as they are introduced

• Honor committed and mission-driven donors while alive

Additional Society Member Benefits

• Invitations to exclusive Children’s Hospital Foundation and Norton Healthcare Foundation events

• Recognition for full value of gift in annual report – both year gift

if recorded and year inducted into Wade Mountz Heritage Society

• Class recognition at annual Wade Mountz Heritage Society dinner

• Plans for future Wade Mountz Heritage Society Wall at Norton

Healthcare facilities

2012 Wade Mountz Heritage Society Video

Data PointTwo-thirds of high-net-worth Americans would rather their children grow up to be charitable than wealthy. (2013 U.S. Trust INSIGHTS

ON WEALTH AND WORTH)

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Q & A

Contact information:

Lynnie Meyer, MSN, R.N., CFRE Dave SmithChief Development Officer President Norton Healthcare System Heaton Smith Group502.629.8064 404.597.5806lynnie.meyer@nortonhealthcare.org dave@heatonsmithgroup.com