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Planned Giving, Simplified

Mark Eshman

Director of Endowments & Foundations Group, Sr. Wealth Advisor

Summary

If you’re on the board of a nonprofit organization or family foundation, Mercer Advisors can help your organization create a planned giving strategy.

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The Endowment and Foundations Group at Mercer Advisors has a vision for helping small and midsize nonprofit organizations and family foundations fulfill their mission through education and value-added advice. To make this vision a reality, we’ve hosted conferences around the U.S. where nonprofit communities can receive education in the areas of investment strategy, fundraising, board governance, and planned giving.

 

Understanding planned giving

At our recent Planned Giving Made Simple conference in Boise, Idaho, we hosted over 50 nonprofit executive directors, development professionals, trustees, and donors. The first aim of the event was to help define planned giving, because the term seems to confuse and even scare organizations that are seeking to build capacity. One of our panelists defined it as giving that takes forethought. In other words, it’s a strategy that goes beyond annual gifts or capital campaign donations. More to the point, planned giving can fulfill a person’s philanthropic intent over their lifetime, and even after their death.

Planned giving is done through family foundations, donor-advised funds, charitable remainder and lead trusts, qualified charitable distributions, bequests, and life estates, to name a few. Almost any asset can be given to charity, including public and private securities, real estate, life insurance, retirement plans, personal property, and even business interests.

Universities, hospitals, museums, and community foundations encourage planned gifts to help fund their long-term commitments, such as capital projects, scholarships, and endowments. While a donor can enjoy tax benefits through planned giving, their philanthropic intent is the most important determinant of whether they’re a good candidate for this strategy. Therefore, nonprofit organizations should focus their planned giving efforts on prospective or existing donors who have a consistent history of giving, as opposed to those who are primarily seeking a tax break.

 

Getting started with planned giving

The “how” of planned giving often seems to confuse donors and the development professionals at nonprofit organizations. This is where a skilled estate planning attorney can be helpful. If a donor wants to incorporate planned giving in their estate plan, or simply make bequests outright through a will, working with an attorney and wealth advisor can be an effective way to navigate the jargon-filled world of this strategy. Once their strategy is defined, the donor will likely be able to determine which giving vehicle makes the most sense for them and the nonprofit.

Digital planned giving is an exciting and relatively recent innovation, and FreeWill is one company that’s specializing in it. Its tool is designed for nonprofit organizations to use with their websites, as a first step in the planned giving journey. An organization can use analytics from the tool to help gain deeper insights into their donors and formulate a more impactful stewardship strategy, which is critical to developing long-term giving relationships.

 

Three key takeaways for planned giving

  1. Donors and nonprofit organizations benefit tremendously from ongoing education about trends and techniques in planned giving.
  2. Donors need to be clear and thoughtful about their philanthropic intentions, which, in turn, will help in determining the best planned giving strategy for them.
  3. Professional advice is essential for simplifying the planned giving process. An experienced estate planning attorney or wealth advisor should be current with changes in the tax code and public policies that can impact philanthropic giving.

In planned giving, every contribution, regardless of size, has significance. Initiating the planning process early is key, and simplicity can enhance the effectiveness of your charitable gifts. If you’re on the board of a nonprofit organization or family foundation and want to learn more about how Mercer Advisors can help you create a planned giving strategy, reach out to your wealth advisor.

Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.

Mercer Advisors has entered into a strategic relationship with FreeWill to provide access to estate planning software and self-help materials. FreeWill is not a law firm, investment advisory firm, or an accounting firm.