3. What Are Legacy Gifts?
• Commonly, they are transfers of assets that
occur at death or when a trust terminates
• Often arise as very pleasant surprises- only
20% of bequests are known in advance
• Gifts with the largest dollar values
• Ultimate expressions of donor support
Legacy Gifts vs Planned Gifts?
4. Types of Legacy Gifts
• Bequests
• Beneficiary designations for Individual
Retirement Accounts and life insurance policies
• Charitable Remainder Trusts (income to
donor, remainder to charity)
• Charitable Gift Annuities (contract to make fixed
payments for lifetime to one or two annuitants in
exchange for a gift, remainder to charity)
5. Types of Legacy Gifts
• Charitable Lead Trusts (Income to a charity for a
term of years, remainder to heirs on a tax-
advantaged basis)
• Retained Life Estate Agreements (Donor gives
residence while retaining lifetime use; donor
responsible for upkeep and property taxes)
• Pooled Income Funds- (Charity offers one or
more funds similar to mutual funds; donors can
make gifts and receive lifetime income based on
the value of their shares in the fund)
9. Yale Tomorrow Campaign
$707 M in Planned Gifts- 20% of $3.886 B
Bequest Intentions
Realized Bequests
Life Income Gifts
Donor Advised
Funds
Charitable IRA
Rollovers
Other Planned Gifts
10. Legacy Gifts in Relation to Annual/Capital
Gifts at United Methodist Homes
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
Year 1 Year 2 Year 3 Year 4
Gift Annuities
Bequests
Current Gifts
11. Why Does an Organization Need
Legacy Giving?
• Potential for substantial long-term results
• Discussion about legacy gifts may identify
assets available for current gifts
• Opportunity for discussion with donors
focused on their goals, needs, and values
12. University of New Haven
Maxcy Legacy Society Members
45 Known Legacy Gifts
Bequests- 30
Trusts- 9
Life Insurance- 4
IRA designations- 2
Known Amounts = $8.7 M
Estimated amounts = $1.0 M
Total expectancies = $9.7 M
13. Why Build an Endowment?
• Permanence
• Financial stability during economic cycles
• Orientation to the future
• Offsets inevitable loss of steady donors as
they die
• Perpetuates donors’ charitable priorities- as in
• “Leaving a Legacy”
• An appealing option for many donors
14. Are You Ready for a
Legacy Giving Program?
Critical criteria-
A mature development program including:
• An active database of individual donors
• Staff and Board support (a Board Champion)
• Time commitment from staff
• Marketing plan and budget
15. Gift Acceptance Policy Guidelines
Who can negotiate and accept gifts?
What approvals are needed?
What assets are acceptable- Securities? Real
estate? Personal property?
What gift purposes are acceptable- e.g.
Permanently-restricted gifts for endowment?
17. Identifying Bequest Prospects
• Long-term, consistent donor
• Age 65+
• Children well-established financially, or no children
• Frequently a widow or widower
• Strong association with your organization
• They think of your organization as part of their
extended family
• Often not a wealthy individual
Also market to key volunteers, current and former
trustees, long-term staff
18. What Motivates a Donor?
• Gratitude for economic success
• Interest in facilitating positive change
• Personal contact
• Recognition and appreciation
• Influence or control
• Commitment to your organization
19. Focus on Bequests
• Write instructions with specific wording to
name your organization in a will;
Restricted Purpose Bequest:
I hereby bequeath to the University of New Haven, a tax-exempt
organization, located at 300 Boston Post Road, West Haven, Connecticut
06516, the sum of ________ dollars (or, alternatively, ____% of residual
estate, or include a description of property, assets, etc. that you wish to
bequeath). It is my wish
that this gift be specifically used to support [describe specific intent here –
scholarships, athletics, student services, etc.]. If it becomes inappropriate or
impossible to accomplish the purpose of the gift as described herein, then the
Board of Governors may designate this bequest to be used for the benefit of a
substantially similar purpose.
If you are considering a Restricted Purpose Bequest, we encourage you or your
attorney to contact the University of New Haven’s Office of Advancement so
that we can work with you on language that will insure we can meet your
intent.
20. Focus on Bequests
• Recommend specifying a percentage of the estate
as a bequest rather than a specific amount “so
that the beneficiaries of your estate, including
charities, will receive the proportion you
intend, even though your estate may increase or
decrease in value.”
• Put bequest wording on your website, and make
it available to staff and volunteers who have
contact with donors
• On annual fund reply cards, include options to
inform you of a bequest intention and to request
more information
21. Focus on Bequests
• Send periodic mailings and/or email blasts
with a reply mechanism; What happens when
a donor responds?
• Establish a method of tracking prospective
legacy donors and potential bequests
• Create recognition society; publicize it in your
annual report
• Consider an annual event for members, and
include them in other donor events
22. Focus on Bequests
• Ask each bequest donor to give a testimonial;
use testimonials in
mailings, newsletters, website
• Train fundraising staff (paid and volunteer) to
ask loyal donors: “Have you provided for any
charities in your estate plans? Would you
consider including a bequest for our
organization in your estate?”
23. Website Tips
• Make it simple, clear and easy for older
individuals to use
• Use simple font styles and basic colors
• Avoid bright backgrounds with reversed text
• Use a minimum font size of 12 point, but
know that showed studies show that 14 point
is ideal
• Avoid multilevel menus and complicated
navigation
24. Health and Retirement Study Data
• Federally-funded longitudinal study of 26,000
diverse Americans over the age of 50
• In-depth interviews every two years about
income, work, assets, pension plans
• Links lifetime responses to distributions after
death (10,000 survey participants who have died)
Analysis of charitable giving data by Russell
James, professor, Texas Tech University, and Jackie
Franey, Sales Director, BNY Mellon Wealth
Management
25. 30%
35%
40%
45%
50%
55%
60%
65%
1995/6 1998 2000 2002 2004 2006 2008 2010 2012 (p)
55-64
65-74
Age 75+
US Population Age 55+
Use of Will Alone, By Age Segment
Analysis by Russell James and Jackie Franey
26.
27. Increasing use of living trusts funded during
lifetime, despite:
• Increasing estate tax exemptions and
• Increasing availability of non-probate
transfers, such as pay-on-death options
28. Distributed Estates Where Decedent
Reported Having a Written and
Witnessed Will (n= 6,063)
16%
38%
10%
19%
11%
6% No will found
Will probated
Unprobated will; nothing
much of value
Unprobated will; estate
otherwise distributed
Unprobated will; trust
distributed
Unprobated will- other
Analysis by Russell James and Jackie Franey
29. Talk with donors about non-probate
transfers, such as:
• Beneficiary designations on retirement
accounts and other assets
• Remainder interests in living trusts
30. Gift of an IRA as Part of an Estate Plan
Securities
to UNH
IRA and other assets
to children
$100,000 $1.9 million (Consisting of the $100,000 IRA, plus the
home, cash and stock totaling $1.8 million)
Income tax $0 $25,000 (Assumed tax bracket of children = 25% x
$100,000 equals $25,000)
Net $100,000 $1,875,000
Option 1: Give the IRA and other assets to the children and $100,000 in securities to UNH
IRA to UNH Real estate, cash and
stock to children
$100,000 $1.9 million (Consisting of the home, cash and stock)
Income tax $0 $0
Net $100,000 $1,900,000
Option 2: Give the IRA to UNH and the cash and stock to the children
John, a widower, has a $2 million estate, including a home, securities and cash totaling
$1.9 million, and an Individual Retirement Account of $100,000. John wants to leave $1.9
million to his children, and $100,000 to the University of New Haven. John’s estate is
exempt from the Federal estate tax, which in 2013 applies to estates larger than $5.25
million. Depending on where John resides, there may be State estate tax considerations.
31. National Committee on Planned
Giving Survey
• 89% of all Americans give to charity annually
• Only 8% of Americans include a bequest to
charity in their will
• When polled on the reasons have not planned
to leave a gift to charity, they responded:
– All assets left to family
– Not enough assets
– Not familiar with bequests
– No one asked them to make a bequest
32. A person age 65 today has a one in four chance
of living until age 90
33. Take the Long View
• A 65-year-old who creates a will in 2013 will
revise it at least once; precipitating factors could
be the death of a spouse, the birth of
grandchildren, tax reforms and health issues
• Even if charitable interests are included in the will
of a 65-year-old, those charitable interests do not
change, and the anticipated amount for
charitable bequests remains available, the
bequest may not be received for 25 years or
more
34. Steward Your Legacy Donors
• Invest time comparable to time spent on top
outright donors
• Personal visit or phone call at least once/year
• Send birthday cards and holiday cards
• Include in other donor events
• Continue to contact even if they stop annual
giving
35. Legacy Gift Donors Want…
• To be appropriately thanked
• To be kept informed
• To have personal information kept confidential
• To be listened to
• To be remembered
36. The Role of the Board
Approve the gift acceptance policies
Allocate resources for legacy giving program
Promote the effort
Lead by example
37. The larger the gift commitment, the
more likely that it includes a
bequest, a charitable trust, or other
legacy gift
38. Advanced Planned Giving
Charitable Gift Annuities
• Evaluate your organization’s readiness to
accept, manage and market gift annuities
• ACGA suggests annuity rates
• How will your annuities be invested during the
donor’s lifetime?
• Who will explain gift annuities to prospective
donors, write gift annuity contracts, and
communicate with donors and annuitants?
39. Advanced Planned Giving
Charitable Remainder Trusts:
• Your organization can receive your remainder
interest in a trust without having to be involved in
creating or managing the trust
• Evaluate whether you want to offer information
about planning charitable trusts, either by hiring
knowledgeable staff or using a consultant
• Evaluate whether your organization has the size
and financial sophistication to offer trust
management
40. Advanced Planned Giving
Provide training so development officers have a
working knowledge of gift planning strategies,
and can recognize opportunities when a planned
gift will complement a major capital gift
41. Set Expectations and Measure Success
Track the number of revocable gifts (bequests,
IRA and insurance beneficiary designations, trust
distributions)
Set goals related to:
• Number of members of your legacy society
• Number of prospects who are asked to
consider a bequest
43. Building a Legacy Giving Program
for Your Nonprofit Organization
Bob Congdon
Director of Development
University of New Haven
300 Boston Post Road
West Haven, CT 06516
203-479-4295
rcongdon@newhaven.edu
