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Does Planned Giving make sense in 2012 and beyond?“Face reality as it is, not as it was, or as you wish it to be”
~Jack Welsh
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II. Contrast traditional fundraising and modern planned giving
I. Introduction
Table of Contents
III. Two perspectives of a gift
IV. The current atmosphere
V. Planned Giving community’s reaction
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Introduction
How did we get here?
What did we expect?
How did things change?
What have we accomplished?
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Traditional fundraising contrasted with modern planned giving
Typical reasons that nonprofits avoided planned giving:
Required more resources
Required specialists
Too technical/difficult
Not mainstream or popular for smaller charities
No demand from donors
Other fundraising avenues were available
Fear that it would negatively impact immediate gifts
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Traditional fundraising contrasted with modern planned giving
Planned Giving techniques often include:
Non-cash “assets”
More complexity
More risk
Deferred gifts
Donor-centric strategies
Solution-based methods
Flexible giving that engages donors
Unlimited gifting opportunities
Long-term relationships
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Two perspectives of a gift
Benefactor (Donor)
Beneficiary (Charity)
–Moving a “benefit” from one to the other
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Donor’s perspectiveMany hats
Many responsibilities
Many passions
Standard of living
Fear
Information overload
Trust issues
Prioritizing
Two perspectives of a gift
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Charity’s Perspective
FinanceEnsuring organization has enough resourcesAccountable to multiple stakeholdersOutright gifts give us maximum flexibility, simplicity and immediacy
DevelopmentCharged with finding additional revenueAccountable to multiple stakeholdersPlanned gifts give us more to discuss with donors, deepen the relationship and promote longevity
Two perspectives of a gift
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Current atmosphere
Philanthropic resilience
Magnitude of market impact on giving
Fundamental change in donor responses to economic headwinds
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Market
Economy
Political environment
Demographic changes
Global community
Current atmosphere
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The market
Volatility + fear = cash on the sidelines
Five-year cycle: 2002 2007 2012 2017?
Deleveraging
Corporations / Individuals / Government
“Uncertainty creates paralysis. Certainty creates actions.”
Current atmosphere
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The economy
The Fiscal CliffWhat is it?
What are the possible outcomes?
What does it mean for you and your donors?
Current atmosphere
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The political environment
Current atmosphere
Issue 2013 Taxes (absent legislation)
Obama Proposal Romney Proposal
Dividends and Capital Gains Taxes
Top Rate 39.6% + 3.8% Medicare Tax
Top Rate 20% + 3.8% Medicare Tax
Top Rate 15%
Income Taxes 15%, 28%, 31%, 36%, 39.6%
10%, 15%, 25%, 28%, 36%, 39.6%
8%, 12%, 20%, 22.4%, 26.4%, 28%
Deductions Phase out rules that eliminate personal and dependent exemption deductions and many other itemized deductions
Reduce the value of itemized deductions and other tax breaks for families with income of $250k +
Plans to “broaden the base” – specifics are not available. Most likely reducing or eliminating many deductions and credits
Transfer Taxes $1 million deduction, 55% top rate
$3.5 million deduction, 45% top rate
Repeal Estate Tax
Source: CBO, SmartMoney, Thompson Reuters Research Institute of America, 2012
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Demographic changes
Greatest Generation (1900-1927)
Silent Generation (1928-1945)
Baby Boomers (1946-1964)
Gen X (1965-1980)
Millennials (1981-2000)
Current atmosphere
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The global communityHeightened awareness
Increased competition for philanthropic dollars– International foundations– “Friends of” organizations
Current atmosphere
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Planned Giving community’s reaction
What are the options given what we know today?
Recoil
Business as usual
Adapt and push forward
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Recoil
Slash or freeze planned giving budget
Emphasize traditional means of giving
Limit donor options
Potential implications
Not equipped to compete
Donors feel misunderstood
Less money
Planned Giving community’s reaction
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Business as usualContinue with status quo
Keep your head in the sand
Wait and See
Potential implicationsNot positioned for growth
Missed opportunities
Lose your place at the table
Planned Giving community’s reaction
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Adapt and push forward Recognize possibilities for growth
Position yourself for a new breed of donors
Enhance existing relationships
Potential outcome Seize the opportunity
Rebrand and Ensure Longevity
More Money
Planned Giving community’s reaction
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Closing thoughts
Does Planned Giving make sense in 2012 and beyond?
“You must be on top of change, or change will be on top of you.”
~Mark Victor Hansen
“If not planned giving, what else can be done to meet your current and future fundraising objectives and ensure the perpetuity of advancing your mission?”
~Audrey Johnson
Planned Giving community’s reaction
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Thank you
Audrey JohnsonVice President
Planned Giving Advisor
Phone - 336-732-2987