PLANNED GIVING
PLANNED GIVING 101: ENDOWMENTS

Most charitable organizations are understaffed and spend the majority of their time on annual fund raising and major gifts. Their support group is the Board of Trustees, whose members are chosen by their status in the community and their willingness to serve. More often than not, both the staff and board members do not possess the expertise on planned giving concepts required for Endowment Building.

One of the biggest problems with endowment building is understanding the potential donor's personal profile. Most organizations deal with gifts of cash. However, most wealthy individuals do not possess a great deal of cash. Their wealth is tied up in their businesses, real estate, personal property, and/or stocks and bonds. So, we need to find creative solutions to unlock or reposition some of the assets in order to maximize their charitable giving potential.

There are many perception problems related to Endowment Building. One of the most common of these is that potential donors and their advisors believe that if assets are given to a charity, their heirs automatically receive less. The choice is not gift versus heirs, but gift versus taxes. Contrary to public opinion, studies have also shown that donors primarily give because they want to make a difference. However, many donors do not believe that charities do a much better job than the government. Finally, most donors feel that professional advisors are well versed on charitable giving techniques. This is also not the case. Accordingly, less than 10% of planned gifts can be attributed to efforts of professional advisors.

We need to find ways of educating the potential donors and their advisors to see different alternatives and to visualize the opportunities we all have in building dreams for ourselves, our families, our businesses, our communities, and ultimately to make a difference. The job of the development officer should be to fill the educational void that exists - - to educate the donors, financial advisors, and their community in general to their agency and its mission. We must approach this as a service for the common good - - to recruit as many people as possible to join and share in the mission.

Endowment building is a long-term approach, which requires a long-term commitment. Even in the case of the most sophisticated, well-staffed organization, the planned giving programs are usually designed using the traditional, "one-case-fits-all" approach. The new non-traditional approaches utilize innovative planning strategies to solve clients' problems and create opportunities for clients to be in a position to make major gifts. This work is best done through consultants who are experienced planners and motivators and have the technical support system required to finalize the gift process.

By ADO member ROBBY MORRIS, Insurance and Personal Planning, The Morris Group, 914-273-6301; www.robbymorris.com; morrisrw@ft.newyorklife.com.