planned giving

Tax Bill Imminent – Time to Take Action?

Image result for musical chairs winners losersThere still needs to be some negotiations between the House and Senate to come up with a final bill but they are pretty close. My accountant even told me to make sure I pay up my back state taxes owed since 2017 is probably the last year I can deduct them.

Ok – for Nonprofits – what is the bottom line?  Anything terrible? Any advice for our donors?  Good, bad or ugly for planned giving?


Here is my take on a few provisions that might be relevant to nonprofits:

  1. The “standard deduction” is definitely going up – probably doubling. As a head of household, I will get around a $24,000 standard deduction.  Seeing that I will still get the mortgage interest deduction as well as up to a $10,000 deduction on my real estate tax, I probably will still be an itemizer.  In other words, donors who have significant expenses like mine will likely not be impacted. My verdict: no impact on nonprofit fundraising.
  2. 529 plan expansion –  Under the House bill, parents may set up 529 plans for unborn children. Additionally, up to $10,000 per year of plan funds could be used for private elementary and secondary school expenses. Under the Senate bill, 529 savings plans could be used for public, private and religious elementary and secondary schools, as well as home school students. My verdict: might be very good for private schools – families with extra funds will be encouraged to park large sums in 529 plans to be used throughout private elementary and college years as a tax-free (on growth) fund.  No impact on fundraising that I can see unless people tell you that they are funding 529 plans instead of giving you charitable gifts.
  3. Estate tax repeal – Under the House plan, the federal estate tax would be phased out and completely disappear after 2024. Under the Senate plan, the federal estate tax would remain, but the exemption for federal estate and gift tax would double.  In other words, we will have an estate tax, just applying to even less people. My verdict: not great for planned gifts like Lead Trusts which are driven by estate tax avoidance but no impact on planned giving as a whole or other vehicles.
  4. Excise tax on big University Endowment Investment Income – Under House proposal, private universities with assets of more than $100,000 per student will pay a 1.4% excise tax on their net investment income. Small colleges will be exempt from the tax.  Not sure how the Senate addressed this issue but I suspect it won’t end up in the final bill.  For some reason it was not brought up in the Forbes article, it only impacts the biggest private schools (around 100 of them). My verdict: not sure.

I have been through too many “feared” tax law adjustments to be overly concerned about the impact on nonprofit fundraising. Since they are not tampering with the charitable income tax deduction, my hope is that those who benefit from the changes will be give more to nonprofits.

Still, there’s a lot of musical chairs scrambling going on here (fooling around with tax code under the current condition that is must be revenue neutral means there has to be winners and losers) so we won’t know the impact of the law for years to come.


It’s started…..

Tax reform – yikes! Always supposed to simplify but always ends up being more complicated!

If you are a nonprofit/fundraiser, you should be concerned. Presidential proposals in the past have been very frightening to nonprofits who rely mainly on tax deductible gifts. So, what are we facing?

  1. Firstly, we are a long way from anything actually happening but we do have some details on the Administration’s’ proposed plans.
  2. Good news – It’s official – the income tax deduction isn’t being tampered with.
  3. Not sure news – the standard deduction would jump a lot (ie… 2016 for married joint return is $12,600 – would jump to $24,000). In other words, many more people will no longer “itemize” on their tax returns – maybe this deincentivizes those from giving because their gifts no longer get them a cash rebate?  More on this below.
  4. Also not sure news – no more death tax.  Ha ha. Last time a president fulfilled his promise to eliminate the estate tax (2001), he actually increased it in many places and it almost swung back to huge rates in 2011. In any case, the roller coaster years of ending estate tax to the snap back year to a decent fix actually didn’t impact planned giving numbers! I don’t think there will be an impact on bequest dollars to charities but I do think I may be very busy dealing with whatever cockamanie scheme they come up with (ie…return of carry-over basis 🙂

Back to #3 – I already saw a Forbes article claiming that the increase in the standard deduction “could decimate charitable giving.” Click here for that article but please read my response!

I totally disagree with that article’s point.

Here is another quote from the article:

The House tax reform blueprint said that a $24,000 standard deduction for joint filers would reduce the percentage of American taxpayers who itemize and take the charitable deduction from 25% (one out of four taxpayers) to 5% (one out of 20).”

Sounds catastrophic except for the fact that most charities receive 80% or more of their fundraising dollars from the top 20% echelon of their donors – and those 20% will likely continue to itemize.  Trust me, your major gift donors have more than $24,000 in itemized deductions! I have way more than that!!! (and I’m not anywhere near being a major gift donor – nowhere near it in fact;(

Anyway, take a look at these charts from my training programs:

One Day Boot Camp - AM Session 1 Introduction and OverviewOne Day Boot Camp - AM Session 1 Introduction and Overview 2

Americans give consistently – regardless.  2% of disposable personal – 2% of the economy.  The dips happen when people are poorer – not upset about taxes.  SO, the administration argument that people doing better in general is better for nonprofit fundraising is TRUE!!!!  Put more money in their pockets and they will give more.  This next slide on total US giving – inflation adjusted since 1975 – makes that point especially in light of the above slides. Giving over those years just went up and up but the percentages of disposable wealth and GDP stayed flat!!

One Day Boot Camp - AM Session 1 Introduction and Overview 3

Ok, so how could charities get hurt by the increase of the standard deduction? Well, older people might be impacted who don’t have all of the deductions that younger folks have.  They may start getting less benefit from their charitable giving – that is true.

Ah, older meaning age 70.5 and up – just happens that at that age, you are eligible to make direct IRA rollover gifts – no taxes.  This is already a great deal for seniors who don’t itemize and if this change happens, you need to step up the IRA rollover marketing!

Maybe we can convince the government to allow direct rollover IRA giving from age 59.5!! That would be really cool.

We’ve just begun with the big tax changes. Stay tuned!

Watch Free Webinar on the Great Wealth Transfer


Check out this free webinar on the Great Wealth Transfer!  (NOTE: the first minute or two didn’t get recorded but it picks up on the first slide)

If you have any interest in receiving a copy of the actual powerpoint (with slide data accessible) please email me at

Also, don’t forget to check out our summer planned giving training programs!

The Planned Giving Boot Camp (starts July 12th)

Beyond the Planned Giving Boot Camp (part II of the Boot Camp) (starts July 20th)

Thank you as always for checking out our programs!






Man’s Search for Meaning and Philanthropy

I’ve been thinking for several weeks about this book and what it has to do with philanthropy in general and planned giving in particular.  Something just struck me so please humor me and read on.

Firstly, if you’ve never read Man’s Search for Meaning by Viktor Frankl, you need to.  It is an unbelievable, true story with a far reaching message – one for those who work in philanthropy in particular need to ponder.  The story is of Frankl’s first hand experiences as an inmate in a concentration camp but Frankl is no ordinary victim. He was an up and coming Austrian neurologist and psychiatrist when he was swept into the Holocaust.  His life’s work having to do with a theory that people  have an inherent need to seek meaning in life.  And, he observed first hand – under the most horrific conditions – the impact of one’s being able to maintain meaning as a source of drive to remain alive (and the loss of meaning and almost assured death).

Frankl eventually becomes his own prime case study when he himself loses his research papers – the papers that gave him meaning and drive to live, and how he somehow finds meaning to live.  Eventually, he does survive and his theory changed the face of psychiatry and the world.

So what does Frankl’s story and work have to do with philanthropy or planned giving?

Think about this field we are in – philanthropy, fundraising. We represent various non-profit institutions and/or programs that receive significant funding through gifts from individuals.  Someone sees a request (perhaps in a letter or email or personal meeting), considers the worthiness of the cause, weighs how much to give this particular cause at this time, and writes a check or gives cash or something else of value. And, when it comes to planned giving, that same person is deciding to leave something after they are gone for this cause.

Why should anyone do this? What is the core reason for philanthropy?

I would like to suggest that Frankl’s theory is at the heart of the matter. Deep down in a person’s head, perhaps in the subconscious, there is something that drives a person to seek meaning outside of themselves and it often finds expression through charitable giving.  Giving to help others and/or to a cause greater than oneself. It gives meaning to our own lives.

So what does this mean to us “professionals” in the business of raising money?

Let me suggest that our job is to offer – on behalf of our respective institutions – meaning to the lives of our supporters.  In other words, we need to communicate clearly what our institutions are doing for our community and the rest of mankind.  We need to show our supporters that their dollars play an important role – that they are partners with us (the institutions) in addressing whatever needs we are focusing on.  That the funds are well spent and that the institution is making a difference.  And, that our current, short-term and long-term goals are in line with what we have promised to accomplish – on your (our supporters’) behalf.

In other words, let’s find a way to treat every donor – not just the top ones – like shareholders in the enterprise of correcting the world or whatever corner of the world we happen to be focussing on.

And, if we do that job well, besides receiving larger and more consistent gifts, more supporters will make the ultimate gift in their estate plans – establishing their own life legacies by connecting to institutions and causes  after they will no longer be here.

The gifts during life are small down payments on various levels of meaning our donors seek through their generosity.  And, the gifts upon death are often the final balloon payments to the most important, impactful conduits of meaning during our lives.