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Know Your Options

Updated: Jun 1, 2023

By Andy Ragone

Periodically, I am given the opportunity to present the value of gift planning in front of an organization’s leadership. I love the “Aha!” moments that invariably happen when the room begins to internalize the implications of giving from wealth and not disposable income. Not only do board members see a new horizon for the organization itself, many also begin to wonder about the potential impact gift planning might have on their own financial and legacy planning.

I find that many charitably minded board members experience the unintended burden of becoming the primary targets for various giving needs identified by an organization. Are there budgetary concerns? Is a capital campaign in the works? Have we held our board accountable for our minimum giving requirements? Do we have a “Give or Get” policy for our board members? The resounding answer to all of these questions may be to ask the board to give more than what they normally give.

In each of the above cases, we are asking a volunteer board member to do more —without demonstrating much empathy for personal situations or perhaps appreciating what has already been done or donated. Sometimes, we assume board members have unlimited resources and will carry the load in a pinch. Yes, board members are serving because our mission compels them. They truly believe in our cause, enough to invest of their time, their wisdom and their money.

Certainly, gratitude goes a long way, as does the fruit of a compelling vision. People stick around when an organization is able to effectively carry out its vision and mission. Even more so, when they see how they played an instrumental role in carrying out said vision and mission. What happens, then, when a nonprofit’s compelling vision is tied to an effective tax savings strategy? What happens when a board member learns about tax advantaged ways to give?

After learning how real estate funded charitable remainder trusts can bypass significant capital gains and increase income, board members may be interested in moving forward with creative ways to give. Charitable remainder trusts create an income for the donor for life, lives or a term up to 20 years, while creating a future gift to charity. The trust is a tax free trust and can sell highly appreciated assets without realizing capital gains. The donor will receive a charitable deduction for the present value of the remainder to charity. The donor will benefit from the bypass in gain, increased income and a charitable income tax deduction. Before, a board member may dismiss an “ask” for another outright gift of cash, but revealing other funding assets can help motivate donors.

Helping the board discover new ways of being charitable, while greatly reducing tax burdens and increasing income can motivate them to become champions of the gift vehicle with other donors.

It can be transformative to learn that support does not need to be given from the limited resources of disposable income. Instead, giving from wealth AND receiving income from these assets is a new opportunity.

I love seeing the look on the faces of those who have these type of “Aha!” moments—those realizations when leaders learn how to give from asset wealth and not just disposable income. Many board members out there faithfully serve and want to do more but are unaware of their options.

I share this blog to encourage and challenge you, as development officers, to educate your boards on the virtues of gift planning. Your board members will welcome new ways to help them as donors and influencers within your organizations’ communities.

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