Giving Gap (Fidelity high net wealth survey) – What can we learn?


Fidelity came out earlier this year with a very interesting survey entitled The Giving Gap – which looked at “awareness and use of charitable giving methods and vehicles among affluent and high-net-worth donors, and how wealth, stage of life, age, and advisor relationships impact how they give.” Click this link to see the entire report:

There is too much to address in this blog post so I will focus on the above graphic: bottom line is that higher net wealth individuals are not as knowledgeable about giving options as you would think.  WE need to educate!

Here is one more graphic from the report – To me, the story of the below chart is the two lowest percentages of “use” on the chart both have to do with IRA and retirement accounts – that’s one huge area of education that you and your fundraisers should be talking up!giving-gap-image-2

Read that report and let it digest. So far, my take is that we need to really step up our efforts to introduce the basics of gift planning options to all of our prospects.


What’s wrong with this picture?

Clinton Foundation snap shot

Yes, the Planned Giving Blog is apolitical but there are times when I can’t resist getting into the spirit of politics – especially Presidential elections when they cross over into my territory! (For fun and a little education, of course!)

What caught my attention?  A little article this morning on entitled “Half of Clintons’ charitable giving in 2014 went to their own foundation.”  Check out the article by clicking on the title and then come back here to read the rest!

So, I got into investigative reporter mode this morning and starting checking out the most recent 990s.

Here is what I found.

#1 – Yes, the Clintons contributed $3 million or so in 2014 to their small private foundation – The Clinton Family Foundation (CFF).

#2 – CFF granted out around half of its holdings to nonprofits in varying amounts between $5,000 and $200,000 to various good causes (I’m sure – it included a client of mine!) around the country.

#3 – The other half did stand out  for 2014 Calendar Year: a grant of $1,865,000 to The William J. Clinton Foundation (PC – Public Charity)

Now point #3, of course, is strange. Presumably, the Clintons are involved plenty already with this public charity, The William J. Clinton Foundation (now doing business as the Bill Hillary and Chelsea Clinton Foundation – let’s refer to it as BHCCF).  Why not just donate that $1.865 million directly to BHCCF, a full fledged public charity? Maybe a little better deduction on their tax returns?  Actually, there is no difference for them on the surface.  The charitable deduction is not affected either way. And, BHCCF’s public charity status seems pretty solid (at least on this issue!) – this $1.865 million won’t impact it as far as I can see with their public support test.  Hmmm – why all of the subterfuge?

#4 – The above picture – here it is again (click picture to see larger view):

Clinton Foundation snap shot

This is a snapshot from BHCCF’s 2013 990 tax return. It is showing the totals of their fundraising events in 2013.  Did you notice that their 14 events or so actually lost money?

You could say that is certainly not out of the norm but not at this scale.  To run 14 or more high end events like these, with the costs and revenue associated with them, you would need a team – a pretty big team of full time staff working their tails off. And, for what? To lose over $800,000 for the organization.  What about the cost of probably 10 or more full-time staff members dedicated to running these events?  The loss is probably more like $2 million, if you add in real staff costs like salaries!

If I were investigating this foundation, I would want to know why they are spending so much money and effort on so-called fundraising events when they are clearly not designed to actually raise money.

In other words, what I am looking for is whether these events are not really to support the charitable mission of the foundation (obviously not doing the job financially) but rather some other purpose (i.e. getting someone elected President – which actually is a pretty big issue for a public charity whose status also rests on the fact that politics must be severely limited if you want to keep your public charity status).

Last lesson – Step Transactions.  I was an attendee of the S. Prestley Blake Law Center (building name of my law school), who just happens to be the founder of Friendly’s Corporation and also the taxpayer in one of the most infamous tax law cases (Blake  v. Commissioner of Internal Revenue Service). That case set down the principle of step transactions, which means that you cannot do something indirectly that you couldn’t do directly (i.e. gift funds for a deduction to one entity that sends it to another which really shouldn’t have public charity status after all). Is this the answer as to why bother funneling funds through CFF?

Alright, this was a fishing expedition.  I was just wondering if any nefarious tax or charitable issues would jump out at me.  That event spreadsheet in the 990 hints to some serious issues with the public charity status of the BHCCF – which on its face should be questionable in any case.  Someone seeking higher office, has huge “public charity” foundation at her beck and call, and runs presumably high end events that lose money hand over fist.  Maybe, just maybe, much of the rest of the BHCCF activities are way over board towards helping Hillary’s election campaign.  Of course, this isn’t a headliner issue, is it?  Oh well, maybe next time.

New Planned Giving Insights

If you have a free hour, check out this link to a fascinating web presentation from Dr. Russell James (sponsored by about some really cool, new Planned Giving data: WHAT THE DECINE OF WILLS AND ESTATE PLANS MEANS FOR PLANNED GIFT MARKETING Presented by Dr. Russell James J.D., Ph. D, CFP

Presented by Dr. Russell James J.D., Ph. D, CFP

I actually plan on watching the webinar over again, taking better notes and reporting back on each of the major findings.

Here is a teaser of some of the points I gleaned from my not-so-clear notes:

  • The top trigger for people to add a nonprofit to their estate plans (will, trust or account beneficiary designation) was experiencing any apprehension of death (i.e. facing one’s own mortality).  Cancer and other major health declines also made the top 10.  Family structure change (death of spouse, divorce, etc…) was next.  Not that surprising but read the next point…
  • The top triggers for people to remove a nonprofit from their estate plans were essentially the same as the triggers to add a nonprofit!  In other words, anything that motivates a change of one’s estate plans could be good or not good for a nonprofit (now you understand why we emphasize stewardship!).
  • Most charitable plans are added within 5 years of death!  Wow.  If that is true, not only is it a case for stewardship but it’s a huge case for traditional PG marketing (i.e. newsletters!).
  • Planned giving is currently experiencing the Baby Bust!  As Robert Sharpe has warned for the last 20 years or more, there was a serious drop in births in the late 1920s and 1930s.  And, any positive impact by the Baby Boomers on planned giving is 5 years away!  Meaning, planned giving programs need to gear up for the impact of the Baby Boomers.

That webinar was so full of cool stuff, I plan on releasing and analysing the data points over the next few months!

If you have enjoyed reading this blog and would like to add a positive testimonial (sorry, negative stuff won’t go up), check out my new tab for testimonials under the Clients tab and please comment away!

UK Getting Into Planned Giving?

When asked about overseas planned giving, I usually reply that it is basically a U.S. phenomenon.  Outside of the U.S, philanthropy is not so strong in general, with almost no legacy giving in particular, and very little tax incentives to encourage legacy giving (or any giving!).  So, for the most part, I almost exclusively work on U.S. based planned giving situations.

independent_mastheadBut this very interesting story from a British newspaper may be showing a changing trend, at least in the United Kingdom:

What is interesting about this story is that it reports that about 5% of individuals generally leave charitable bequests – the exact percentage often reported in the U.S. for bequest giving. But, when prompted (i.e. asked!) the percentage jumped to %10 and when raising the conversation to which causes respondents were passionate about, the percentage jumped to 15%!

The results of the U.K. study mentioned in the article seem to compliment Professor Russell James’ work on Planned Giving and the Brain (see previous post or click here).  Here is the bottom line on planned giving promotion gleaned from these two studies:

  • Start talking about legacy giving with your prospects – US. based or wherever!
  • Start tapping into their passion for your cause and how they can create their own legacy with their commitments!
  • Legacy giving is not just a U.S. phenomenon!