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April 2019 Newsletter

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Planned Giving Mentor

Wayne Olson, JD Consulting Associate (Eastern Division)

S. Renee Brida, JD Senior Associate and Lawyer (Western Division)

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


Quote for the day: No matter how educated, talented, rich or cool you believe you are, how you treat people ultimately tells all. Integrity is everything. Source: Unknown

Quickie quiz:..........How many billionaires were there in the US at the end of 2017? ....52...102...324...444... or ...747 (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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Giving USA Results are in....and they are creating quite the buzz because the results indicate giving may have been effected by the recent tax law changes.

I was going to write a review of the results but then a Stelter Blog appeared and it states many of the points I was going to highlight:

Start - "Numbers can be interpreted to mean dramatically different things. A good example of this in the planned giving world: the latest numbers from Giving USA."

Finish - "These Giving USA 2019 numbers show that planned giving is a critical component of your fundraising efforts. If your organization does not have a planned giving program, use this latest data to garner support from your board of directors. If you are in the process of growing your planned giving program, contact Stelter to learn how you can better engage and inspire your donors to support your mission."

For all the information in between use this LINK


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 2018 tax laws changes. 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 to increase income and decrease taxes. This PowerPoint presentation is 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 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 spring, summer or fall date for this seminar simply send me an E-Mail.


Free Will featured in AARP article.....results in $100 million in charitable bequests. The monthly magazine from AARP featured a one page article "Your 15 Minute Will" which compared Free Will (see my January Newsletter) to other services.

Patrick Schmitt, Co-CEO of FreeWill responded on the National Committee of Charitable Gift Planners forums "That article actually helped to generate nearly $100 million in bequest commitments, which was a joy to see."


Marketing Idea #1....Add a codicil to your will...

I have been on several web sites recently and noticed many are adding a codicil that may be downloaded on their bequest information site.

St. Elizabeth Healthcare Foundation, Edgewood, KY, codicil example

Haven Hospice, Gainesville FL, codicil example

Community Foundation of Northern Shenandoah Valley, Winchester, VA codicil example


Marketing Idea #2......Personalize your public newsletter to fit your mission.....There are many ways to show the public the profile of your estate program. When you combine exposure with a personal story of commitment the results are one of the most powerful presentation methods.

That is what Munson Healthcare Foundations did recently with the "Focus" article on "Leaving a Legacy." (see page 11) It presents a survivor story after his spouse died. It also talks about the need for planning early in your financial lifecycle. It is written by Glenn who is a skilled writer.

Too often our bequest stories are after the fact. Search your donor base and identify someone with a commitment to legacy support and see if they will step up and tell their personal story.


Create a Virtual Planned Giving Office for less than $10 per day.....Our basic Telephone Lite service provides an Economical service with less Risk and greater Technical expertise from our team's decades of experience identifying, planning, solicitation and completing planned gift agreements.

  • Outsourcing expertly handles the technical side of planning giving while the development staff can concentrate on building donor relationships
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  • Six month minimum engagement at $1,800 payable in advance

Download Virtual Flyer here - Download "What a planned giving consultant can do for you" here


The best planned gift may be an outright gift.....Janet L. Hedrick, Director of Development, The Radiation Oncology Institute, Arlington, VA received a blended outright gift of $250,000 from a Texas female donor, Dr. K, age 76. Sometimes the best planned gift is an outright gift after all options are explained to donors and advisors.

The gift began when the donor indicated she wished to establish a Research Award in her deceased husband’s name. Exploring her assets there was no longer a need for a $250,000 paid up whole life insurance policy.

Several steps followed. In order to transfer the policy the Institute would need to become the policy owner and beneficiary. The company would supply the form to make this change. A valid appraisal would be required paid for by the donor, to determine the income tax charitable deduction for the transfer. IRS form 8283 would be completed by the donor, the appraiser and signed by the Institute. The charitable deduction would be limited to 30% of the donor’s AGI for this non-cash gift. The Institute would then determine if it would keep the policy in force to receive the future death benefit by doing a future value analysis, or cash it in for the current value.

Ultimately, the donor decided she wished to see the impact of her gift today. Upon the advice of her investment advisor and her CPA, the donor cashed in the policy and combined with her outright check of $60,000 and her personal check for the insurance proceeds of $190,000 the Research Award was established. The donor will be subject to income taxes on the accumulated dividends in the policy but the charitable deduction she will receive will more than offset any tax liability. Both her cash gifts will be deducted up to 60% of her AGI.

IRA SECURE ACT......The Setting Every Community Up for Retirement Enhancement (SECURE) Act, passed the House of Representatives by a 417-3 vote. It makes it easier for small businesses to offer retirement plans and raises the required minimum distribution (RMD) age to 72 from 70 1/2. A Senate committee is considering similar legislation, the Retirement Enhancement and Savings Act (RESA).

See attached article "A Kinder, Gentler IRA" for how the SECURE ACT may effect withdrawals and the starting date for prospects to delay their Qualified Charitable Distributions (IRA Rollovers).

Note: the act is not the official law of the land yet.


Many Years to Spend.....I was struck by the following table and how it might effect planned gifts and fundraising in general. It is a fact individuals are living longer. There are many reasons for the increased life expectancy. As individuals age up, one of their major concerns is will they have sufficient financial resources to live a comfortable lifestyle during their senior years.

The guaranteed payments from commercial products, social security and charitable gift annuities help with a lifestyle sustaining income in retirement.

The table below from AARP shows people who reach age 70 have many years to spend as they reach milestone birthdays.


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.


Nothing in retirement?! - 45% of the 76 million “Baby Boomers” in the USA have no retirement savings. “Baby Boomers” were born between 1946 and 1964, i.e., the oldest “boomers” turned 65 years old in 2011. “Boomers” reaching age 65 in 2019 represent the 9th year of 19 years of “Baby Boomers” (source: Insured Retirement Institute).


Quiz Answer....The number of U.S. billionaires has grown swiftly of late. There were an estimated 747 of them in North America in 2017, up from 490 in 2010, according to a study. At the same time, long-term economic data suggest the 10-figure crowd and those just behind them control ever-larger pieces of the economic pie. The wealthiest 1% control 37.2% of the country’s personal wealth, while the bottom 50% control nothing.


News and Notes....AGING POPULATION - Between 1950 and 2018, the US population doubled from 159.1 million to 332.8 million while the number of Americans at least age 65 quadrupled from 12.8 million to 52.4 million (source: Social Security 2019 Trustees Report).

MORE YEARS IN RETIREMENT - From 1950 to 2018, the life expectancy of a 65-year-old American male has increased from 12.8 years to 18.1 years, i.e., an increase of 64 months. From 1950 to 2018, the life expectancy of a 65-year-old American female has increased from 15.1 years to 20.6 years, i.e., an increase of 66 months (source: Social Security).

MAYBE NEVER? - 34% of American workers surveyed anticipate that they will be at least age 70 before they retire (source: EBRI 2019 Retirement Confidence Survey).

NOT WHERE YOU’D THINK – The state of North Dakota has the highest percentage of adult residents who have a net worth of at least $5 million (source: Internal Revenue Service).

TOP TAXPAYERS - The top 3% of taxpayers in tax year 2016 made $256,673 of adjusted gross income (AGI), received 29% of all AGI nationwide, and paid 51% of the federal income taxes paid by all US taxpayers (source: Internal Revenue Service).

SIMPLER RETURN - As of 12/31/17, there were 77 million homeowners in the USA, of which 34 million claimed a mortgage interest deduction on Schedule A of their 2017 Form 1040. As of 12/31/18, there were 79 million homeowners in the USA, of which just 14 million claimed a mortgage interest deduction on Schedule A of their 2018 Form 1040. The reduction in the use of the mortgage interest deduction was the result of the increased standard deduction created by the “Tax Cuts and Jobs Act of 2017” (source: Tax Policy Center).

IRS AUDITS - There were fewer audits during fiscal year 2018, the IRS Data Book for 2018 showed. The IRS audited more than 892,000 individual income tax returns during the fiscal year, down slightly from the previous year. The IRS audited 0.6% of all individual tax returns filed in calendar year 2017, and 0.9% of corporate income tax returns, not counting S-corp returns. The majority of fiscal year 2018 audits, 74.8%, were conducted by correspondence. The other 25.2% were conducted in the field. Of the nearly 1 million examinations of tax returns, more than 22,000 taxpayers didn't agree with the IRS examiner’s determination, totaling an agreed recommended additional tax of almost $10.2 billion.

SOCIAL SECURITY - Older Americans rely too much on Social Security as a main source of income
A survey by Nationwide Retirement Institute has found that 47% of people aged 50 and above consider Social Security a primary source of income in the golden years, according to this article from USA Today.

DEBT-FREE - 40% of US homeowners own their home free and clear of any mortgage debt or home equity loan. Of the 60% of homeowners with an outstanding debt balance, the median debt total is $126,000 (source: American Housing Survey).

ARE YOU BETTER ON YOUR OWN? - The average American worker who retires next year (in 2020) will have paid $135,000 in Social Security taxes during his/her working lifetime, less than the $193,000 in Social Security retirement benefits that he/she is projected to receive (source: Urban Institute).

YOUNG AND OLD - By the year 2035, the number of Americans at least age 65 (projected to be 78.0 million) will exceed the number of Americans under the age of 18 (projected to be 76.4 million), the first time in our nation’s history that has occurred (source: Census Bureau).


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.

Sharon Jones FAHP, Vice President Development, Haven Hospice, Gainsville, FL received a beneficiary designation of a revocable living trust from a deceased 91 year old donor in the amount of $2,035,483. The trust benefits two living individuals and upon their death 100% of the residuum will benefit multiple hospice programs.

Jason Chandler, President, Gwinnett Medical Center Foundation, Lawrenceville, GA secured a $100,000 cash funded charitable gift annuity from a female donor, age 97, her third stock and cash funded agreements now total $382,675

Lindsay Rhodenbagh, President and Chuck Desch, Director of Development, Bayhealth Foundation, Dover DE secured the following CGAs and FDCGA, a 2 life $30,000 agreement, ages 90/82, a 1 life $20,000 Flexible Deferred CGA from a medical center employee age 60.

Deborah P. Schuchmann, Associate VP and Chief Development Officer, Beaufort Memorial Hospital Foundation, Beaufort, SC received a $260,000 bequest from a 83 donor for the Foundation's general endowment.


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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