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May 2018 Newsletter

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Planned Giving Mentor

S. Renee Brida, JD Senior Associate and Attorney

Professional Partnerships: Hospice Philanthropy Group L.L.C.


Quote for the day: It is only in the giving of oneself to others that we truly live.....Dr. Ethel Percy Andrus founder of AARP

Quickie quiz:....A Florida couple ages 68 and 72 gift your charity $16,255.00 in cash and stock during the year and make minor gift to their church. Will the couple be able to deduct their charitable gifts? YES or NO (answer below)

Senior Spirit.....Click the Senior Spirit link (below left) for a copy of the latest articles from Certified Senior Advisors

Past issues of the Newsletter are available in the Newsletter Archives

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7 Charitable Strategies to Decrease Taxes and Increase Income.....Is the title of my new educational seminar for prospects and financial advisors. Plan ahead to prepare your prospects for the effect of the new tax laws. The seminar covers the recent tax law changes that effect charitable giving, the stages of income and estate planning, reviews good and bad gift assets, and provides 10 examples of gift techniques. PowerPoint presentation covered in 49 slides.

The seminar should be scheduled for 1.5 hours to allow sufficient time for discussion and questions.

The cost is $2,500 per presentation day plus a maximum of $500 in additional travel costs. Individual consultations with prospects may be arranged to follow the presentation or you may secure another consulting day at an additional cost.

To reserve a summer or fall date for this seminar simply send me an E-Mail.


Fundraising under the new 2018 income and estate tax the name of a White Paper I created at the request of the Association for Healthcare Philanthropy (AHP). It provides a specific overview of those aspects of the new Tax and Jobs Act. This specifically effects, our work in raising capital for the mission of your charity.

After a summary of the law, the paper lists what fundraisers should do to explain the impact of this new law and specific gift strategies your program should include. Eleven (11) specific examples are cited as opportunities for donor support. This paper builds upon the excellent work of others in the fundraising field who analyzed the important changes in the Tax and Jobs Act.

I appreciate the editing of Wayne Olson of Wayne Olson Consulting LLC. One important note about this paper, it was created before the ACGA announcement on the July 1st rate increases for gift annuities.

Download White Paper here


Marketing Idea #1....Don’t overlook promoting Testamentary Charitable Gift Annuities.....I recently developed a bequest handout for a client and was reminded about the unlimited potential of Testamentary Charitable Gift Annuities to advance a legacy program.

A person’s will or revocable trust may contain wording to establish life income payments to beneficiaries. Why would anyone consider this approach? The choice is obvious, would the deceased like to provide a onetime outright gift to the beneficiary, i.e. $100,000, or life income payments, where the proceeds will ultimately support their favorite charity?

One time gifts get spent quickly and are shortly forgotten. Continuing quarterly payments are a constant reminder that dear old "Uncle Sal" is providing guaranteed lifetime payments for years while remaining an important part of one's life.

A recent Georgia client, Gwinnett Medical Center Foundation received two testamentary gift annuities. One for $867,435 payable to a long time care giver, age 65, and one for $1,000,000 to the sister, age 69, of his deceased spouse. Both agreements provided 5% payments and were partially reinsured.

The estate receives an estate tax charitable deduction which under the recent estate tax changes may not be a significant financial incentive. The major incentive especially for spendthrift relatives, as mentioned above will be supporting their favorite charity.

The wording is complicated, but here is sample wording to share with advisors.


Marketing Idea #2...Bequest of saving bonds.....Individuals owning saving bonds often ask if they may transfer the bonds to charity and avoid the tax on the accumulated interest. The most common variety of saving bonds are the Series EE bonds (formally Series E bonds). Any attempt to transfer bond ownership during life will trigger all of the untaxed accumulated interest to the owner.

In most cases only at death of the owner may the bonds be transferred to charity without triggering tax liability. These instructions need to be stated in the will of the deceased that the saving bonds will become the property of the named charity or a charitable remainder trust after the owner’s death.

If your charity has a charitable gift annuity (CGA) program try this approach. 1) Owner cashes bonds triggering the accumulated interest. 2) Establish a CGA with the charitable deduction equal to the amount of accumulated interest. 3) If the owner does not need the payments immediately consider a flexible deferred CGA to increase the deductible amount. DONOR MUST BE ABLE TO ITEMIZE THEIR TAXES. If the donor does not itemize maybe the increased income from the CGA will be sufficient to pay the taxes. You truly need to run the numbers in all cases.


Do you know how much the S&P performed since 2009?....Click to download performance chart in PowerPoint format.


Gift annuity rate update and laminated gift annuity rate charts.....If you would like a laminated rate chart for the most recent ACGA July 1,2018 rates simply request one using the following E-mail request and put Laminated Rate Chart in the subject line and be sure your signature line has your full address. As of this writing the rates have been announced and the charts will be mailed for use beginning July, 2018.

Download a PDF chart of single life $10,000 cash gift and two-life $100,000 security gift for ages 60,65,70,75,80 here.


Social security averages per age .....Nationwide survey finds that people over age 50 think Social Security will cover more than 50% of their expenses in retirement. However, the reality is that Social Security is designed to replace only 40% of the average worker's pre-retirement income.

As of December 2017, it may be helpful to know that many of your direct mail and other donors are receiving Social Security payments in the following amounts.

Recipients who are age 62, 66, and 70 are receiving an average of $1,112, $1,383, and $1,510, respectively, per month or $13,334, $16,596 and $18,120 per year. Remember up to 80% of social security payments may be taxed depending on a donor's personal income situation.


Position opening....Orange County Community Foundation - Director of Gift Planning.....Working directly with the Vice President, Philanthropic Planning and External Relations, the Director of Gift Planning is responsible for developing and executing strategies to cultivate donors and build strong relationships with professional financial advisers and their clients.

Orange County Community Foundation works with generous individuals, families and businesses to improve life for the people who call Orange County home. It is located in Newport Beach and is the 8th largest community foundation nationally.

Full position announcement


Quiz Answer....NO. The standard deduction amount increases for individuals over the age of 65. A couple filing jointly both over age 65 will have a standard deduction threshold of $26,600 before they may itemize their taxes.

The major components that may be credited toward itemization are State and Local Taxes (limit $10,000), Mortgage interest, Medical expenses exceeding 7.5% of adjusted gross income, and Charitable gifts.

There is no state income tax in Florida so the only deductible amount will be property taxes which are modest for retirees. Most retired folks do not have a mortgage, and hence no mortgage interest deduction. Medical expenses did not exceed the 7.5% of AGI. The only deduction left is the discretionary charitable gifts and with total gifts of $16,655 their deduction were significantly lower than the $26,600. Hence the government did not share in the gift by giving them a reduction in taxes.


News and Notes....

SKILLS REQUIRED - 28% of American jobs do not require any formal educational credential, i.e., not even a high school diploma (source: Department of Labor).

WILL IT WORK? - 2 states (New York and New Jersey) have enacted legislation that creates a workaround from the $10,000 “state and local tax” (SALT) deduction limitation that is part of the 2017 “Tax Cuts and Jobs Act.” The IRS has yet to rule on the legality of the arrangement in which state taxpayers make a “charitable contribution” to a fund set up by their city, allowing them to receive a “tax credit” against their property taxes (source: BTN Research).

OUT OF MY LEAGUE - The median sales price of single family homes for sale today in San Jose, CA is $984,000 (source: Zillow).

A LOT IN A LITTLE - The top 10% of American households, i.e., 10% of 120 million US households, own 84% of the stock market wealth in the country (source: Federal Reserve Bank of New York).

ACTUAL VS. EXPECTED - Only 36% of workers surveyed anticipate that their monthly Social Security benefit “will be a major source of income” during retirement. However, 67% of retirees surveyed have determined that their monthly Social Security benefit “is a major source of income” during retirement (source: Employee Benefit Research Institute 2018 Retirement Confidence Survey).

CONCENTRATED AT THE TOP - Prior to the 2007 global real estate crisis, 24% of the “housing wealth” in the United States (i.e., real estate equity) was owned by American seniors at least age 60. Today, 41% of the “housing wealth” in the United States is owned by American seniors (source: Federal Reserve Bank of New York). Major reason to do real estate gifts.

THE REALLY RICH - The top 0.1% of US taxpayers (i.e., top 1 out of every 1,000 taxpayers) paid 19.5% of all federal income tax that was collected nationwide for the 2015 tax year (source: Internal Revenue Service).


Kudos Corner - Celebrating gifts of all types and sizes

In this section I periodically highlight some recent gift expectancies and gift program elements I think will be helpful and informative, not all gifts are included.

(Check back next issue for list of achievements


James E. Connell and Associates is a national consulting service which has been devoted to increasing

resources for charities using the power of charitable estate and gift planning techniques for over 40 years.

Pinehurst office: PO Box 3335, Pinehurst, NC 28374
Phone: 910-295-6800

Northeast office: 20982 Bayside Avenue, Rock Hall, MD 21661

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