Planned giving gets new life
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Jack Miller, director of gift planning for the Pittsburgh History and Landmarks Foundation, has received fewer holiday cards this year - a clear sign, he believes, that consumers at all income levels are skittish about spending in a tight economy.
So he's doing all he can to educate past and potential donors about how to give money to charities and non-profits like History and Landmarks, and to feel good about it despite a lingering recession.
"If people care about the organizations they support, they can find creative ways to help them now," said Mr. Miller, who has worked with non-profits and donors for two decades and is a past president of the Pittsburgh Planned Giving Council.
One strategy that a number of non-profits are pursuing more intensely than in the past is planned or deferred gifts.
Such donations include bequests of cash made in wills or estates to be given to charities when the donor dies; or trusts or annuities established for a charity that pay fixed income to the donor as long as he or she is alive. Trusts and annuities can include insurance policies, real estate, or securities.
A selling point of planned gifts, said Mr. Miller, is that individuals can target charities they feel passionate about for the long term and not tap money they need in the short term.
As the economy worsened and the financial markets collapsed in 2008, charitable contributions fell nearly 6 percent, according to Giving USA.
In a report prepared last month, the National Philanthropic Trust found charitable giving would probably decline again this year and will not rebound until consumers become confident again in the economy and the stock market - possibly not until 2011.
But many people still would like to support charities, according to a recent survey conducted by the American Red Cross. Two-thirds of respondents felt it was more critical to make charitable donations this year than in the past.
To encourage them, non-profits have stepped up their outreach and education about planned gifts to existing and new donors.
At the History and Landmarks Foundation, which identifies and attempts to save, preserve and revitalize significant structures and sites in and around the city, Mr. Miller is emphasizing the tax benefits to donors. For instance, donors can make sizeable gifts to charities and deduct them on federal income tax returns to offset income that results from rolling over money from traditional 401(k) or Individual Retirement Accounts to Roth IRA conversion accounts.
Also, through the end of 2009, federal legislation allows potential donors age 70.5 or older to make tax-free gifts of up to $100,000 from mandatory IRA distributions. Those gifts aren't eligible for deductions.
The History and Landmarks Foundation is promoting such tips on its Web site. "We want to make sure donors know the rules and show them the best way to achieve all their objectives," said Mr. Miller.
Meanwhile, to generate interest about planned gifts, the Pittsburgh Foundation this year hosted lunches around the city for donors as well as insurance experts and tax planners who help make decisions about big bequests.
The community foundation has approximately $500 million in assets and 1,000-plus funds established by individuals to benefit community causes.
The Pittsburgh Foundation also focused on planned giving at an annual continuing education seminar it holds for lawyers and financial advisors; and highlighted facts and advice about planned giving in its newsletter and other publications.
The result was 39 planned gifts established this year (as of mid-December), up from 21 committed in 2005 for the foundation. The value of the gifts can't be quantified until they are realized because they depend on the market value of estates, property and other holdings, said John Ellis, foundation spokesman.
Planned gifts targeted for the foundation after the donor's death are typically larger than those from living donors, said Yvonne Maher, the Pittsburgh Foundation's vice president for development donor services.
"Our goal was to double what we had in 2005, and we're going to hit that number by the end of the year with some comfort," said Ms. Maher.
"We went into this year knowing it was obviously going to be incredibly difficult for fundraising," said Grant Oliphant, the foundation's president and chief executive. "It was important for us to take advantage of the opportunity to think about planned giving as opposed to money out of [our donors'] pockets right now."
New gifts from living donors will be down this year because of the economy, he said.
But the foundation expects the gap to be made up by past planned gifts that came to fruition this year, including a gift to the Quentin & Evelyn Cunningham Fund for more than $9.5 million - the result of a bequest made in 1993.
Vincent Halupczynski, a partner with the accounting firm of Malin Bergquist in Pittsburgh and Erie, who specializes in auditing and consulting with non-profits, said many charitable organizations are directing their development offices to focus on planned giving.
"They're making an investment, whether it's new brochures, new people or contracting with other outside professional services to attempt to get donors and gifts. The interesting thing is that it can take years to develop those types of gifts. So it's truly an investment."
At Shady Side Academy, a private school in Fox Chapel, planned giving is a top priority of the development staff as longtime donors and new contributors cut their charitable giving during tough economic times.
"Here's where things changed in the past year: if most donors had five philanthropic causes two years ago, it's now down to three," said Patrick Tevlin, vice president for advancement. "We want to be one of those three ... and the planned gift is the ultimate gift."
The school contracted with an outside Web development firm to create a section of its Web site devoted exclusively to planned giving with details about tax legislation and other giving incentives.
While the school's annual fund can be considered its checking account for day-to-day operations, "Planned giving is our savings account," said Mr. Tevlin. "We all need to build up our savings account."
First Published December 24, 2009 12:00 am
