Planned Giving Goes Hand in Hand with the Holiday Season
November 06 2015 • Mark Brewer
This article was recently published in the November/December 2015 issue of Orlando Arts Magazine.
It’s that time of year again. The holidays remind us of the joy of giving, and December 31st looms as the end of the tax year. Everywhere I go people are talking about “planned giving.” So now seems like the perfect time to review the benefits and the importance of these gifts to the arts ecosystem of Central Florida. The misconceptions of planned giving can be confusing for both sides.
The most important aspect of a planned gift is the donor’s planning, rather than the organization’s need. Donors and arts organizations connect through gifts all year long. However, a planned gift is an entirely different entity from events, ticket sales and major gifts. Planned giving also results in specific kinds of gifts at the best time for the donor. Often these are major gifts of legacy or creations of sustainability for a beloved mission.
The planning of a gift usually starts with a family discussion or a meeting with a professional advisor to talk about a liquidity incident, income or estate-tax planning, or transfer of wealth planning. Sometimes family foundations think about completing their annual required grant distributions with special dispersals to arts organizations to further the legacy of the grantors. While it is hard to track all of this activity, indications are that a quarter of the region’s annual giving - almost $1 billion - happens at this time of year.
While generous donors sometimes surprise arts groups, the DNA of planned gifts can provide insight. The most common planned gift is still a bequest at the death of a donor to create a legacy or continue the involvement of the family in the mission. Given the choice, many bequest donors would rather give while they are still alive, but that is where deeper planning and communications with arts organizations comes in. Donors should reach out to organizations that they care about to discuss their plans or ideas, and ways to make their gifts more useful. Arts organizations should have a strong bequest program in place to accommodate patrons and donors and make it easy for people updating wills or trusts to get the necessary language for creating or updating the documents. It’s even better when this language is available online. Unlike other kinds of planned giving, bequest giving is usually a very private thing. But the trend now is for donors to make life gifts or split gifts between life and death, realizing that the joy of giving is lost on the departed.
If you’re interested in engaging in a planning process for a special gift, look for arts organizations where you can provide a bridge to success or a legacy with your gift. The vehicle is not as important as the intent of the gift. The most popular kinds of planned gifts are deferred gifts, endowments or bequests, followed by trust-driven gifts that manage assets over a longer period of time. All of these contributions provide needed capital for arts organizations and important tax advantages for donors, with the added advantage of making the holiday season a time of giving.
A great resource for more information on planned giving is the Central Florida Foundation, which serves as a philanthropic home to more than 400 charitable funds. It manages and invests funds, offers personalized service and expert giving advice, connects caring people, businesses, governments and organizations to local initiatives that build and inspire community, and empowers them to make informed decisions that make a difference - now and in the future. Visit us at www.cffound.org for more information.