Planned Giving | Maya Weil

Maya Weil May 6, 2015
Planned Giving
OPERA CONFERENCE 2015

What is a planned gift?
“Planned giving, also known as gift planning, is the
designing of charitable gifts so that donors realize
philanthropic objectives while maximizing tax and
other financial benefits. A planned gift is a sizeable
contribution made with forethought about the
benefit to the charity and the financial implications
for the donor and the donor’s family.”
Frank Minton

“I’m not wealthy…this doesn’t apply to me”
 Thinking about leaving a legacy? No one does with
nothing
 You have to have a will to leave a bequest
 If something happen to you, what do you want to
accomplish?
 How much do you want to leave to heirs?
 Do those nieces really need your money?
 If you have made an estate provision for the Worthy Arts
Organization, WAO”, please let me know so we can
welcome you into the legacy society and make sure your
gift intentions are properly carried out.

• % of planned gifts that are bequests: 90%
• % of adults in US with a Will: 40-50%
• % that have included a bequest to charity: 7-8%
• % that say they will consider doing so: 10-14%
• Average bequest gift: $35,000-70,000

Which causes did HNW individuals donate to
Source US Trust Study on HMW

• We currently have about 325 households in the 3 legacy
societies:
• Size of known bequests ranges from $5,000 to $1,000,000+
• 50 individuals with charitable gift annuities (some have 7 CGAs)
• Timing is unpredictable
• Stewardship is key to maintaining/increasing these gifts
• There is no minimum – why?
• Bequests may or may not be designated

• Look at the past 5, 10 or 15 years of bequests
• Eliminate any outliers (high or low)
• Take the average and multiply by the number of households in
your legacy group or known legacy givers
• For approximating the delay, look at their ages and a table for life
expectancy
Angel Study
or
What’s in the pipeline?

The effect of legacy giving on annual giving
• A bequest giving study in 2007 by the Indiana University Lilly Family
School of Philanthropy found that income does not affect the likelihood
that a donor will leave a bequest.
• Those who had a bequest donated more than twice as much in any
given year.
• The decision to give a bequest vs. giving an annual gift comes from a
very different part of the brain. Russell James at the University of Texas

Major Types of Taxes
• Income
• Capital Gains
• Estate
• Gift
• Generation skipping

At the end of 2012, Congress avoided
the fiscal cliff by enacted the
American Taxpayer Relief Act of 2012
(ATRA)
• For the first time in many years taxpayers can
plan for the future because these are not
temporary measures – most are indexed for
inflation and not expected to be reviewed.
• The charitable IRA rollover may or may not
be renewed in 2015 and perhaps
permanently.

Important tax rates to know in 2015
Rate Threshold Amount
Top rate on income 39.6% Single $413,200+ Tax $119,996.25
Joint $464,850+ Tax $129,996.50
Top rate on long-term
capital gains
20%+3.8% Single $413,200+
Top rate on estates 40% $5,430,000 indexed
Pease limit Single $258,250
Joint 309,900
Limit on itemized
deduction

Estate and Gift taxes
The Federal estate tax is a tax on the right to transfer property at death.
If you give someone money or property during your life,
you may be subject to federal gift tax.
TaxYear Estate Tax Exemption Rate Gift Tax Exemption
2008 $2,000,000 45% $1,000,000
2009 $3,500,000 45% $1,000,000
2010 Unlimited 35% $1,000,000
2011 $5,000,000 35% $5,000,000
2012 $5,120,000 35% $5,120,000
2013 +indexing 40% +indexing
2014 $5,430,000 40% $5,430,000
(Includes retirement plans, life insurance, home(s), collectibles, investment accounts)
Many states have lower exemption amounts– DC, MD $1 million and 16% max rate so
someone dying with $5.25m owes $680,000 to MD or DC. VA no estate tax.
President Obama's FY 2016 budget proposes permanently reinstating the estate tax at
2009 levels ($3.5 million exemption; 45 percent rate).

Income taxes
• Adjusted Gross Income “AGI”
– Deductions limited to
• 50% for gifts of cash
• 30% of AGI for gifts of appreciated property

Capital Gains tax
• Levied on the increase in value of property
when it is sold
• “Cost basis”
• Long term/short term
• Federal - 20% + 3.8% at top income levels
• State – around 5% depends on state

Appreciated Securities
• If you have owned a stock for at least a year
and a day, and it has increased in value
since you acquired it (through purchase,
inheritance or spinoff). You receive a
double tax benefit – a charitable deduction
plus avoidance of any potential capital-gain
tax.
• World Vision

Why donate long-term appreciated securities and why
is it more attractive than ever since ATRA?
• Billy and Bob both buy shares of xyz corp at $5,000 in 2009
• Current value is now $20,000
• Billy wants to donate money to WNO and Bob to NSO
• Billy sells his stock and donates the proceeds to WNO
• Bob donates his stock directly to the NSO
Billy
Realizes capital gain of $15,000
Pays 23.8% of $15,000 = $3,570 to Uncle Sam
Gives remainder to WNO - $16,430
Receives charitable deduction
$16,430x39.6%=$6,506
Uncle Sam is better off
Bob
No capital gains due
Gives stock to NSO - $20,000
Receives charitable deduction
$20,000x39.6%=$7,920
Both Bob & NSO were better off

Be an advocate for your donors
• You want to give $5,000?
• Do you have stock worth more than you paid for it?
• Have you held it more than a year?
• Oh, it was a gift from your grandfather and you don’t
want to give it up?
• You might considering donating $10,000 and then
repurchasing it the same day.
• You get the charitable income tax deduction of say
39.6%
• You avoid the capital gains of 20%+
• That resets your cost basis and allows you to make a
donation that costs you little more than the $5,000
you originally intended to give

Erica Gloger, Esq and Plaintiff,Edith Windsor
www.kennedycenter.plannedgiving.org/kennedycenter/giving/7.html

Ability to give vs. motivation
The Sharpe Group

Different ages – Different gifts
 Regular gifts (KC members, Circles donors)
 Relatively small
 Regular repetition anticipated
 Usually cash
 Emphasis on acquisition and upgrade
 Much activity involved in asking- mass communication
 Major Gifts
 Larger than regular
 Specialized donor attention
 Naming opportunities (marble wall, performance support etc)
 Honors driven
 Building personal relationships important
 Rely on board/committee members to work relationships
 Usually cash or securities
 Ultimate Gifts
 May be the largest gift a person is capable of making
 May be “once in a life time decision”
 Gifts evolve over time, therefore long term evolutionary methods appropriate
 For many, the magnitude of gift means it can only be made through estate
 Donors motivated by personal experience
 Higher level of commitment to mission of organization
 Relationships develop over long time
 The Kennedy Center/NSO/WNO is raised to the level of a family member when someone includes is in will

Why bequests?
• Many people agree that their largest gift to
charity would be through their estate plan
Facts about Bequests United States Canada
% of Planned Gifts are Bequests 90% 90% - 95%
% of population that has a will 40% - 50% 44%
% that have included a bequest to charity 7% - 8% 7%
% that say they will consider doing so 10% -14% 27%
Average Bequest Gift $35,000 - $70,000 $30,000

Planned Gifts to the Kennedy Center
Bequests
Gift Annuity
Deferred Gift Annuity
Char. Remainder Trust
Char. Lead Trust
Life Insurance
Tangible Personal
Property
Real Estate

Wills and Bequests
• Generally the first wills are made at age 44 and the
first bequests are put in at age 49
• Most charitable bequests are made by women
• Events that trigger writing a will:
– Becoming a widow
– Being diagnosed with a terminal illness
– Positive change in assets
– Buying a house
– Having children
– Getting married/divorced
– Going on holiday

Telling Stories
The DC Youth Orchestra Program
Video and discussion:
Why was this story told so well?
What elements can we use?

Who are good planned gift candidates?
• Age
• Wealth
• Regularity of giving
– Donors
• Regularity of attendance
– Subscribers
– Frequent ticket buyers
• Matinees
• Volunteers
• Ushers
• Non-traditional couples
• “Miss” or widows
• Childless
• Single ticket buyers of single tickets
• Donors at retirement homes
• People who give stock instead of cash/check/creditcard

How to attract planned givers
• Playbill
• Stuffers
• Matinees
• Brochures
• Membership renewals
• Website
• Printed materials
• Internal training
• External training

Communicating your Planned Giving Program
• Why is this important?
– Raise awareness of planned gift programs
• Normally several organizations are included in estates
• Important to understand estate planning process
– Discover expectancies
• Recognize and cement relationship
• Prospect for other gifts
– Direct relationship between marketing and
revenue
• Consistency is the key

How to approach the topic
• When they fit a 'bequest profile,' one could say, "Your pattern and history of giving
is very much like benefactors who have provided for the Center/NSO/WNO in their
estate plans. Have you thought about including us?"
• "If I may be so bold as to inquire if you provided for the Center in your estate
plans?"
• "Have you thought about "endowing" the annual gifts you've so consistently
made?"
• Once I have established rapport and a relationship, I say, "Would you consider a
bequest to the Kennedy Center?" Then let them talk. No one has ever been
offended.
• I explain to folks what my role is and how I work with donors. This often leads to
them asking me questions and/or sharing with me their plans for us. If they don’t
have much of a response, I will then ask them if they have considered a deferred
gift. If it is a yes or a no, I present myself as a resource to begin those
conversations.
• We are in the midst of a campaign for today, tomorrow and forever. Your annual
gift meets our program needs for today and your capital campaign gift will help us
to do more tomorrow. Have you considered a gift that will last forever?
• As you consider your estate plans and financial objectives, does (your charity)
stand a chance of somehow being included in them?

How to approach the topic - 2
• We’ve received a number of comments from committed donors, like you,
stating that they wish they could do more. We tell them that “Planned gifts”
are a way to do more without expending the funds you need today or might
need in the near future. Let me tell you about some creative ways to do
more.
• Your gifts over the years have helped us to (examples ….). Your commitment
to giving is similar to those who have made arrangements for the Foundations
in their estate planning. This will allow us to continue our programs well into
the future in good times and in uncertain times. We have a special society to
recognize donors who have included us in their estate planning gifts. Can I
share more about this level of giving with you?
• These approaches can be offered in person or in letters and I often have
testimonials as examples.
• If you could accomplish all of your personal financial objectives without
sacrifice to your family, and possibly even improve on them, and make a really
significant gift to (your charity) would you do it?
• Would you consider allowing me to just help you explore the options?

How to keep planned givers
 Thank them. Thank them. Thank them.
 Donor recognition – Playbill, marble carving
 Legacy Societies –
 Lunch + performance
 Periodic invitations to other events
 Newsletter
 Letters and mailings
 Updates on season announcement,
 Updates on annuity rates
 endowment report
 Feature them in KC News or Encore newsletter
 Great way to get to know donor
 Gives personal attention

Appropriate communications
• Use larger font size
• Less words per line
• Shorter words and sentences
• Be aware of hearing issues
• Be aware of eating or teeth issues
• Older people often prefer handwritten notes
• Majority of planned gift donors are women- often
widows
• Don’t patronize them

Types of planned gifts
 Donor-advised funds
 Charitable accounts – Fidelity, Schwab
 Family Foundation
 Bequests
o Will vs. Living Trust
o Fixed Amount
o Percentage
o IRA (or qualified retirement plan) but not ROTH
 Charitable IRA rollover (not Roth IRA)
 Charitable Gift Annuity
o For self
o For self and partner/spouse
o For relative
o For someone else
 Life Insurance
 Charitable Remainder Trust
o Unitrust
o Annuity Trust
 Charitable Lead Trust
 Gifts in memory
 Endowment gifts

Bequests
 A charitable bequest is the simplest way to leave a
lasting legacy to the WAO
 Will vs. Living Trust
 Specific Bequest - I hereby give, devise and bequeath $100,000 [or my
account # 12345 at Citibank, or my retirement plan at xxx, or real estate, or 150
shares of GE, etc] to The John F. Kennedy Center for the Performing Arts, Federal
Tax Identification number 53-0245017 located at 2700 F Street, NW, Washington,
DC 20566. This bequest shall be _____ (used according to the needs of the Center
or restricted to the Center’s general endowment).
 Percentage of residual estate - I hereby give, devise and bequeath
30% of the rest, residue and remainder of my estate to The John F. Kennedy Center
for the Performing Arts…
 Most of our planned gifts are bequests

Bequests
 General Bequest
 Contingent Bequest
 Takes place only if the primary intention cannot be met. For
example “If my sister, Jane Doe does not survive me, then I hereby
give, devise and bequeath the rest, residue and remainder of my
estate to be used for the general purposes according to the needs
of the Center
 This ensures that the property goes to a charity rather than
unintended beneficiaries – including Uncle Sam
 Restricted Bequest
 “… to be used for the Suzanne Farrell Ballet Company”

Restricted Bequests
In the event that the Kennedy Center reasonably
determine that any of the purposes for which
the funds paid pursuant to this bequest become
frustrated, impossible, or impractical, the
Kennedy Center may use this bequest for such
other purpose (or purposes), which shall be as
close as practical to the purpose (or purposes)
set forth herein giving special consideration to
the intention of the designation.

Administration of estates
• Work with the executor
– Tax ID
– Contact person
– Keep on top of when money might come
• Work with bank where retirement plan was
held
• Work with relatives
• Ensure the will is followed exactly

Working with advisors
• Make sure they use
the tax ID
– Sally and
Washington Opera Guild
• If it’s designated, make sure there is a viable
alternative
– KLZ and Opera themes
– Ann and Fund for New American Plays
- W&W and the Met

IRA or qualified retirement plan
• If you are 70 ½ or older, you are required to take a
minimum distribution from your IRA.
• You must fill out a beneficiary form
• The worst you can do tax-wise is leave the IRA to
your estate
• Leaving it to heirs can cost up to 75% in taxes
• If you have other assets besides the IRA, leave those
to heirs and leave the IRA or a portion to charity

Charitable IRA Rollover
 Charitable IRA rollover just extended by Congress at end of 2013
 If you are 70 ½ or over, and would like to make a charitable donation,
you can transfer up to $100,000 to a charity in 2013
 No tax on withdrawal and no charitable deduction
 Who benefits?
 Individuals who must take a minimum withdrawal but don’t need
income
 Individuals who usually give up to 50% of their AGI. This distribution
is not subject to the limitation
 Individuals living in states where a charitable deduction is not
allowed at state level
 Individuals who do not itemize and make a charitable gift in an
amount less than the standard deduction
 Individuals whose major assets are in their IRAs – it removes hassle
of reporting the income and then the deduction

Leaving your IRA to a child
• Example: Jack has a $1,000,000 IRA as part of his
overall estate of $6,250,000. His daughter, Jill is the
beneficiary. If Jack were to die now, the tax
consequences could be:
IRA value $1,000,000
Federal estate tax $400,000
Federal income tax $396,000
Total tax $796,000
Available for Jill: $204,000

The benefits to leaving your IRA to charity
If you die with a $6,250,000 estate including $1,000,000 in your IRA
IRA given to the Kennedy Center IRA to Family No gift -everything to family
$5,250,000 of other assets
The Kennedy Center is beneficiary
of $1,000,000 IRA
$1,000,000 IRA
$1,000,000 of other assets to the
Kennedy Center
Less
$0 estate tax + $4,250,000 from estate
$400,000
estate tax
$0 income tax $0 estate tax
$396,000
income tax
$396,000 income tax on IRA
$796,000 TOTAL TAX
Beneficiaries The Kennedy Center Beneficiaries The Kennedy Center Beneficiaries The Kennedy Center
$5,250,000 $1,000,000
$4,854,000 $1,000,000 $5,454,000
0

Charitable Gift Annuity
Donor
Charitable
Gift
Annuity
Transfers Assets
Receives Annual Income
Receives Remainder

Charitable Gift Annuity
 Annuitant can be self or other or 2 people age 60+
 Charitable deduction received by donor
 Annuitant receives fixed payments for life
 Residuum comes to Kennedy Center
 Rate depends on current market rates, age of
annuitant/s – most charities use American Council on
Gift Annuity rates
 Minimum $10,000
 Payments may be deferred
 May be set up during life or in will for someone else
“testamentary” CGA

American Council on Gift Annuities
Suggested gift rates effective January 1, 2012
Single life annuity rates
AGE % RATE
50 3.7
60 4.4
65 4.7
70 5.1
75 5.8
80 6.8
85 7.8
90+ 9.0

American Council on Gift Annuities
Suggested gift rates effective January 1, 2012
Two-life annuity rates
Younger Age Older Age Rate
70 70 4.6
70 75 4.8
75 75 5.0
75 80 5.3
80 80 5.7
80 85 6.1
85 85 6.7
85 90 7.3
90 90 8.2

Two-life gift annuity issues
• Non-married couple enters into a gift annuity with
the Kennedy Center
• Only one annuitant is the donor
• S/he donates appreciated securities
• Specific language must be used showing Donor A and
second beneficiary
• Must be non-completed gift for IRS – reserve right to
revoke during life and in will
• Revaluation at death of first annuitant

CGA Donors
• You don’t have to give the ACGA rates
– Some organizations give higher rates (only 1.2%)
– Some donors try to negotiate
– Some donors take higher tax deduction because
they don’t need as much income
– Makes the donor feel closer to organization
• Check or deposit slip comes each quarter
– Deferred vs. immediate pay
– Flexible CGAs
– Who is your most likely next CGA with?
– State registration and egulations

Charitable Gift Annuity thoughts
• Mr. Gene Arous is subsidizing his mother in a
nursing home with after-tax dollars
• Fund a CGA with her as beneficiary
• He gets tax deduction
• Mother gets income payments from CGA at lower
tax rate (she has to pay income tax because she’s
not the donor)
• Charitable gift annuitants feel more connected. 2
donors gave large extraordinary current gifts

Relinquish a CGA
• Donor gives up right to future payments
• Alleviates future obligations for the non-profit
• May provide further tax deduction for annuitant
• If done prior to life expectancy
• Allows for a “donation” that doesn’t require any cash

Reinsuring a CGA
• “Charitable gift annuity reinsurance is simply a
financing technique whereby a charity chooses to
purchase a commercial single premium immediate
annuity as an asset to back its contractual life-income
liability owed to the donor. The term "reinsurance" is
both incorrect and unfortunate in that it has no
resemblance to true reinsurance — where one
insurance company cedes excess risk to another
insurance company for a premium. The term
continues to confuse the insurance industry and
regulators, but has become ingrained as part of the
charitable lexicon.” – Bryan Clontz, Charitable
Solutions, LLC.

Charitable Remainder Trust
Donor
Charitable
Remainder
Trust
Transfers Assets
Receives Remainder

Charitable Remainder Trust
 Income to donor (or other beneficiary) during life or trust
term (must be between 5-50% of either original value or
revalued assets)
 Trust term is life or a maximum of 20 years
 Charity receives the remainder interest
 CRTs are irrevocable but beneficiaries are not!!!!
 Immediate income tax deduction
 No capital gains upon transfer of donated long term
appreciated securities. (part of income may be taxed at
low capital gains tax rate)
 CRTs are tax-exempt although payments to beneficiaries
taxed under 4-tier, worst-in-first-out system

Federal Taxation of CRTs
• CRTs are tax-exempt although payments to
beneficiaries taxed under 4-tier, worst-in-first-
out system
• 1) ordinary income
• 2) capital gains (short-term first)
• 3) other tax-exempt income
• 4) corpus (tax-free)

Two types of CRT-
Charitable Remainder Unitrust
• CRUT income is a fixed percentage
(between 5-50%) of the value of the trust
assets each year.
• Additional contributions possible
• Trust may pay out the lesser of the unitrust
amount or the trust’s actual income (a net-
income unitrust)
• Makeup provisions permitted

Example of a CRUT
 Mrs. Phil Anthropist endows a fund with the NSO in
memory of her husband. She uses stock owned for
more than 12 months valued at $100,000 with a cost
basis of $30,000 (dividends are approx 2%). By
creating a 6% unitrust with herself as sole beneficiary
for life, she increases her income and realizes a net
tax savings of $52,699. In her 35% tax bracket, her
gift produces an income tax deduction of $18,445.
She also avoids the capital gain tax of $10,500
($70,000x15%) on the initial transfer.
 Initially she receives $6,000 and then 6% of the trust
assets as revalued each year.

Sample Payments on a CRUT
• Year 1: $100,000 x 6% = $6,000
• Year 2: Market investments increase value by
10% so $110,000 x 6% = $6,600
• Year 3: Market investments decrease value by
5% so $104,500 x 6% = $6,270
• Year 4: Market investments increase value by
17% so $122,265 x 6% = $7,336
• etc

Two types of CRT
Charitable Remainder Annuity Trust
• CRAT income is a fixed percentage of the
original value of principal (between 5-50%)
paid to beneficiary
• No additional contributions allowed
• Income tax deduction is the present value
of charity’s remainder interest (10% min.
required) based on ages of income
beneficiaries or max of 20 yrs

Example of a CRAT
• If Mrs. Phil Anthropist, 73 chooses an annuity
trust instead, her initial deduction will be
$49,446 and her resulting tax savings $17,306
(in addition to the capital gains savings). The
payments she receives from the trust will be
fixed at $6,000 and will never vary whatever
the stock market or interest rates do.

CRUT or CRAT?
• If you think the market is going up, use a CRUT
• If you are older and more worried about
steady income, use a CRAT
• CRUT hedges against inflation
• CRUT more flexible
• If you don’t like volatility, use a CRAT

Charitable Lead Trust
Donor
Charitable
Lead Trust
Transfers Assets
Family
Receives Remainder

Charitable Lead Trust
 Income to charity for life or trust term (either annuity or
unitrust amount)
 May be paid to one or more charities – revocable?
 Assets return to heirs at end of term tax-free or
substantially reduced taxes
 Can be set up during life or at death
 2 types
 Grantor lead trust
 Nongrantor lead trust (such as the ones used by
Teresa Heinz Kerry and supposedly by Jackie Kennedy
Onassis)
 Great way to avoid generation skipping tax
 GST is in addition to gift or estate tax
 Currently 40%

Grantor Charitable Lead Trust
• Donor receives a charitable income tax
deduction for the present value of the payments
the charity is to receive from the trust for a
specified amount of time.
• Donor continues to be taxed on the income
earned by the trust each year (including the
amount distributed to charity)
– For this reason the trusts often invest in tax-
exempt securities
• At end of trust term, the assets are returned to
the donor or other beneficiary

Nongrantor Charitable Lead Trust
• Does not provide donor with a charitable income-
tax deduction but neither is s/he taxed on any of
the income earned by the trust.
• Similar to creating a temporary family foundation
for the benefit of the Kennedy Center
• At the end of the specified trust term, the assets
remaining in the trust are distributed – generally
to children or grandchildren
• Reduces or even eliminates the gift and estate
tax that would be liable when leaving money to
heirs

Initial amount Term of years Charitable Deduction Payout Rate Annual Amt to KC Total Amt to KC Amt left for heirs
$5,000,000 15 $5,000,000 8.00% $400,000 $6,000,000 $3,743,549
$5,000,000 15 $4,530,984 7.00% $350,000 $5,250,000 $5,000,000
$5,000,000 15 $3,883,701 6.00% $300,000 $4,500,000 $6,256,451
$5,000,000 15 $3,236,417 5.00% $250,000 $3,750,000 $7,512,902
$5,000,000 10 $3,619,988 8.00% $400,000 $4,000,000 $4,309,178
$5,000,000 10 $3,167,489 7.00% $350,000 $3,500,000 $5,000,000
$5,000,000 10 $2,714,991 6.00% $300,000 $3,000,000 $5,690,822
$5,000,000 10 $2,262,492 5.00% $250,000 $2,500,000 $6,381,645
$5,000,000 5 $1,899,541 8.00% $400,000 $2,000,000 $4,712,463
$5,000,000 5 $1,622,098 7.00% $350,000 $1,750,000 $5,000,000
$5,000,000 5 $1,424,655 6.00% $300,000 $1,500,000 $5,287,537
$5,000,000 5 $1,250,000 5.00% $250,000 $1,250,000 $5,575,074
$10,000,000 15 $10,000,000 8.00% $800,000 $12,000,000 $7,487,098
$10,000,000 15 $9,061,969 7.00% $700,000 $10,500,000 $10,000,000
$10,000,000 15 $7,767,402 6.00% $600,000 $9,000,000 $12,512,902
$10,000,000 15 $6,472,853 5.00% $500,000 $7,500,000 $15,025,804
$10,000,000 10 $7,239,976 8.00% $800,000 $8,000,000 $8,618,355
$10,000,000 10 $6,334,979 7.00% $700,000 $7,000,000 $10,000,000
$10,000,000 10 $5,429,982 6.00% $600,000 $6,000,000 $11,381,645
$10,000,000 10 $4,524,985 5.00% $500,000 $5,000,000 $12,763,290
$10,000,000 5 $3,799,081 8.00% $800,000 $4,000,000 $9,424,926
$10,000,000 5 $3,324,196 7.00% $700,000 $3,500,000 $10,000,000
$10,000,000 5 $2,849,311 6.00% $600,000 $3,000,000 $10,575,074
$10,000,000 5 $2,374,426 5.00% $500,000 $2,500,000 $11,150,148
*The above illustrations assume a 7% annual earnings rate for the Trust
Charitable Lead Trust Illustrations

Life insurance
• Many people own life insurance for purposes
that are no longer relevant
– Children’s education
– Estate taxes (which may or may not exist at
current levels)
– Ex-spouse who re-marries
– Mortgage
• It’s often thought of as extra money
• Change of purpose - Insurance can be used to
replace the value of a gift to the Kennedy Center
• Life Insurance can be used to fund an annuity

Non-cash gifts
Real estate as a charitable gift
• Retained life estate
– Donor deeds personal residence or
agricultural property or 2nd or 3rd home to
charity.
– Donor (and or family) may continue to occupy
residence, operate farm or rent the property
– Capital gains avoided
– Charitable deduction for the present value of
the remainder interest

Give the land, Keep the Income
• You want to move into a retirement home
or downsize but don’t want to pay the
capital gains on your current property
• Set up a charitable remainder unitrust
• Place property in the trust and receive
income (funded by rent)
• Receive charitable tax deduction
• Avoid the capital gains on the appreciation
in value

Donate a partial interest
• Give a “partial interest” in a home to the
Kennedy Center and receive an immediate tax
deduction ie. 10% of a vacation home.
• When the property is sold (during life or
afterwards), KC receives its share of proceeds
• Donor receives tax benefit but no change in
living situation

Be ethical and
Act in the interest of you donor
Discussion:
Donor wants to be recognized by have name carved on
$1,000,000 wall.
He is not a current donor.
He plans to leave $5,000,000 as a bequest.
What kind of planned gift might you suggest?

Endowment Gifts
• Sources
– Planned Gifts
– Endowment campaign
• Feasibility study
• When is the right time for an endowment?
– Must have a good argument for large gift
– Appropriate recognition
– You’ve built a strong annual base with consistent givers
– Mission makes sense
– Finances are in place and fiscally sound management
• Restricted – permanently, temporarily
• Unrestricted

Memorial Gifts
• Gifts in memory of a spouse
• Named concert in memory of someone
• From ushers and volunteers
• Donor profiles
• Scholarship for new works etc

Legacy Society Benefits
• Ticket concierge service
• Admittance to the Circles Lounges
• Membership card showing legacy society name – undated
• Legacy Society membership pin
• Annual appreciation event
• Playbill listing in appropriate legacy society
• Warm fuzzy feelings of connection

If you remember nothing else…
1. Bequests are the most common planned gift
2. You can’t receive a bequest if there’s no will or
beneficiary designation
3. The easiest type of planned gift – IRA
4. A planned gift is planned and given on the donor’s
schedule, therefore, remind people ALL the time
5. Don’t dismiss someone who isn’t wealthy
6. Childless older donors are your best prospects
7. Encourage appreciated securities
8. Tell the story
9. Listen
10. Thank them!

Resources
 www.rrnewkirk.com
 www.sharpenet.com
 www.pentera.com
 www.plannedgiving.com
 http://www.stjudelegacy.org/index.php
 http://www.redcrosslegacy.org/index.
php
 www.leavealegacy.org
 Virtualgiving.com
 Futurefocus.net (also has free pg
pages for non-profits under $500k)
 http://ncgpc.org/
 www.acga-web.org
 http://www.raise-
funds.com/library.html
 www.taxpolicycenter,org
 Kennedy-center.org/plannedgiving
 www.michaelrosensays.wordpress.co
m
 http://www.caringinfo.org/i4a/pages/in
dex.cfm?pageid=3293
 http://www.philanthropy.iupui.edu/insi
ghts-newsletter
 http://www.realestateforcharities.org/
Maya Weil
mweil@kennedy-center.org

Planned Giving | Maya Weil

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