planned giving challenges

Careers in Planned Giving – Part 3 – The Partial Planned Giving Officer

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We left off last week on the generally understood phenomenon that full-time planned giving officer positions are not widespread.  My hunch is that this will change, especially as baby-boomers move into planned giving territory (for another post).  But, for now, if you are interested in planned giving (career-wise), you are probably best advised to work in fundraising and pick up some planned giving responsibilities.

This works in a few common scenarios.

Director of Major Gifts and Planned Giving – This a common position that seeks a major gifts fundraiser who will also cover planned giving. I choose my words carefully.  Most of these positions are primarily major gifts. The problem with these scenarios is that the major gifts piece usually consumes the fundraiser – leaving little or no time for much planned giving to happen.

In fact, these scenarios are usually recipes for planned giving mediocracy since the person who is supposed to implement the planned giving program is only judged on their major gift success.  So, for organizational leaders reading this post, think carefully before throwing planned giving into your major gift director’s lists of responsibilities.  If you have potential in planned giving, you may be severely hampering your organization in this area.

What you can you do as a major gifts fundraiser (you better be one or else you may not have a job for long) who has planned giving in your title and responsibilities to succeed on the planned giving front?

  1. Learn how to integrate planned giving into your major gift asks!  Make it part of the equation for most donors. Get used to using  your “legacy opener” with as many donors as possible (you’ll have to take our planned giving boot camp to find out more about that!) This may take some practice but it works.
  2. Learn to use outside vendors to get planned giving pieces out!  This may cost a few extra dollars but may save a ton of time and if done well, could bring in so many planned giving prospects that someone on staff may need to become full time in planned giving!
  3. Learn how to quantify all planned giving commitments. The majority of planned gifts are simple bequests -with no dollar figure until the donor passes.  Change that paradigm.  Create incentives for donors to reveal approximately what they plan – maybe matching gift campaigns or inclusion in a capital campaign.  Or, come up with an average bequest size.  If that is too difficult, use $50,000 as an average bequest size.

Director of other areas of fundraising (like annual fund or general fundraisers) that have planned giving as an extra responsibility.  This is even further removed from actually being required to do any planned giving since it isn’t even in your title.

You can always implement the three above suggestions and try to find ways to get the organization to at least add it to your job title. The key is to show results and potential.

In other words, money – get their attention with large planned gifts!  It works almost every time.

In the meantime, you can take training courses (like my boot camp!), join your local planned giving council, and also train yourself in personal financial planning!

When the time comes, if you have any planned giving donor experiences to share or other planned giving successes, you will be ready for a planned giving only job (pg director or pg officer). You don’t need certifications or fancy titles – just experience with donors and planned gifts.

Anyway, I am telling you right now – the nonprofit world is waking up to the need to staff-up in planned giving.  Get yourself some hands-on experience while working the annual fund or various other levels of donors and you will be good to go.

Next post: The Planned Giving Tidal Wave – How soon?


Don’t Forget Those Gift Receipts and Don’t Forget the “No Goods/Services” Stmt

The timing and content of gift receipts by nonprofits for charitable gifts over $250 can mean the difference between a generally happy situation and a very unhappy one (where your donor loses his deduction, with significant legal costs no less!).

The gift acknowledgement rules are simple:

  1. Donor must receive gift receipt (for gifts over $250) by the time he files his tax return covering the year of the gift (filing date or due date – whichever is earlier).
  2. The gift receipt must include language that clearly states that no goods or services were offered in return for the gift being acknowledged.

Miss either of these rules and you are looking for trouble.  And, that is exactly what the charity in a recent tax case must be going through right now.

What was the case?  Charity sent a thank you letter to the donor for $22,000+ in gifts soon enough after the gift but it didn’t include the “no good or services” statement. Then, a year later, the charity gave the donor a letter with the right language about goods or services.

Easy case: deduction denied by the tax court.

There are times a taxpayer can get away with “substantial compliance” but not here.  If you want to read the case, click here: Chartiable Contr Deduction Durden TC Memo 2012-140.  Otherwise, get the right language into your gift receipts!

Planned Giving Challenges – Source for CGAs in the IRS Code

One of the most annoying challenges you may face as a planned giving professional is an attorney or an accountant of a donor who is requesting the source in the IRS code for charitable gift annuities.

What makes this such a difficult question (besides the fact that an entire industry uses these things – they work and are accepted!!) is that CGAs were not a one time creation under the IRS Code like charitable remainder trusts. So, we can not point to one CGA section in the Code.

Anyway, I got this question this week and I wanted to go through the roof. At first, I scanned and emailed the entire chapter on CGAs from Tax Economics of Charitable Giving (lots of sources to look up quoted by them). But, I also called a top planned giving attorney to see if he had the info handy. Sure enough, the question was common enough that he went right through the 4 primary sources in the IRS Code and Regulations for CGAs. Here they are:

Section 642(C)(5) – the definition and basic rules for CGAs

Section 501 (M) – Exempts CGAs from being treated as commercial insurance products (as long as the charitable deduction is greater than 10% of the gross gift amount)

Section 72 – This section really deals with commercial annuities but is also the source for how the “tax-free” portion of CGA payments are determined. (note: even though 501(M) says CGAs are not commercial annuities, the code has no problem using section 71 on commercial annuities to help define income issues with CGAs even though they are not supposed to be commercial annuities!)

Regulation 1.1011-2(b), example 8 – This example in the regulations has been an important source for 40 years or more for how CGAs work and how the code treats them as Bargain Sales and this in turn helps us determine the charitable deduction.

I would bookmark this page or print it. Someday you’ll need it.