Planned Giving Boot Camp for Major Gift Officers! – LAST WEEK TO REGISTER YOUR TEAM!

This new 3-part webinar series is for major gift fundraisers who are looking to add planned gift cultivation to their repertoire without getting into the weeds of the technical stuff!!  Our goal is…

Source: Planned Giving Boot Camp for Major Gift Officers!

Pick your poison – Trump or Ryan tax proposals

Image result for trump ryan tax plan

I hate jumping into tax policy debates too early – Trump isn’t President yet and we really have no idea how things will shake out with him and Congress, or whether Democrats will somehow block things (hard to see that as they are not in majority!).

But, a big but….  I just took a look at a good article on CNN/Money (looks pretty nonpartisan to me) comparing Trump’s tax reform ideas with Paul Ryan and House’s – pretty fascinating and a little scary for nonprofits.

I point you to one huge impact area for nonprofits – here is the direct quote from the article:

Kill most itemized deductions

The House plan would eliminate all itemized deductions except those for mortgage interest and charitable contributions.

Trump’s plan, by contrast, keeps itemized deductions, but caps their total value at $100,000 for singles or $200,000 for joint filers, a more costly proposal.

Wow. Read that carefully.  The House plan would be AWESOME for nonprofits! Charitable deduction left along with mortgage interest!!!  No other deductions!

But, then read the second paragraph carefully (Trump’s idea): ouch!!  Capping deductions? What a DISASTER that would be for nonprofits. Remember: the rule of thumb is 80% of charitable funds come from 20% of the donors (or something like that).   Maybe this would be good for planned giving (sorry nonprofits, I know you don’t want to exchange today’s $ for tomorrow’s planned gifts)?

Here is another quote from the article that deserves some attention:

Cut investment income taxes

Today, individuals pay up to 20% on their long-term capital gains and dividends. And their interest is taxed at ordinary income rates — so, up to 39.6%.

House Republicans want to change that. Under their plan investors would deduct half of their gains, dividends and interest. That effectively reduces the top rate on that income to either 6%, 12.5% or 16.5%, depending on one’s tax bracket.

Trump would largely leave the current investment income tax rates in place.

Cutting capital gains taxes is not good for planned giving, plain and simple.  That extra incentive – especially when it was at 20% or more in the 1990s – fueled planned gifts like CRTs and CGAs.  The rates have been low since 2001 and both types are on the downslide.

I’ll take Trump on this one!

Lastly, what about the estate tax?

Kill taxes Republicans rail against

House Republicans want to repeal the estate tax, the Alternative Minimum Tax and key Obamacare taxes.

Trump is on board with all three repeals, but his plan would tax people’s capital gains above a certain amount when they die.

I’m fine getting rid of the AMT and Obamacare. Not fine getting rid of the estate tax.  It is the easiest tax to avoid.  If it affects you, you are forced to think about whether you want to leave a charitable legacy (and still leave your heirs fabulously wealthy) or a legacy of a large payment to the IRS after death.  The incentive is still important to move people in the right direction.

If you are political junky like me – on tax and other issues – you have to be waiting anxiously for this inauguration to finally be over.

Planned Giving Boot Camp for Major Gift Officers!

This new 3-part webinar series is for major gift fundraisers who are looking to add planned gift cultivation to their repertoire without getting into the weeds of the technical stuff!!  Our goal is…

Source: Planned Giving Boot Camp for Major Gift Officers!

Do you really need planned giving staff or even a program?


Take a close look at this slide from an assessment I recently worked on.  Notice that this University went from $19.7 million/185 bequests in FY09 to $3.1 million/34 bequests in FY16.  And, the previous planned giving director (who left a few years ago and wasn’t replaced) told me that prior to 2009, they typically saw between $12 and $20 million in planned giving revenue annually (from early 2000s to 2009).

The question is:  How did a top planned giving program like this ($20 million a year is a TOP planned giving program in almost any circle) drop off so badly, and so quickly?!

Here are my takes:

  1. Financial shakiness – 2008-09 hit a lot of places very hard but this one sustained enough negative PR that dragged on and on, even to this day!  It’s hard to sell eternity when people are wondering if you will be around much longer. It may just be perceptions but perceptions mean quite a bit to those planning their estates.
  2. De-staffing – The planned giving director first went part-time (At the time, I couldn’t understand how such a big PG program could do that), then left and wasn’t replaced!  4 or 5 years without a full time PG director for such a program is tantamount to closing it down!
  3. Divestment – the unnamed university stopped investing (particularly without a PG director to fight for funds for marketing).
  4. Short-term thinking – Finally, when finances get tough, the accountants often take over.  And, accountants are generally not trained to think beyond columns adding up. Planned giving – an investment that may or may not pay off in a distant future – clearly doesn’t appeal to the accountants of this world.

Lastly, this is just another example of how at the moment of pressure and financial stress, nonprofit fundraising drops planned giving.  I see it all the time.  They love me, they hire me, they say they want to get planned giving moving, but end up spending their time and money on the “here and now” and leave the lonely planned giving consultant in the corner wondering what to do.

New Major Gift Officer Planned Giving Training! Please click here to see more about my newest 3-part Planned Giving Boot Camp, just for Major Gift Fundraisers!