The Planned Giving Blogger

The art and science of planned giving.

Planned giving with unusual assets.

with 5 comments

Bryan Clontz, President of Charitable Solutions, gave an eye-opening talk at last week’s National Capital Gift Planning Council Planning Giving Days.  According to Bryan, “more than half of affluent investors’ assets are held in non-cash assets; cash only represents 3-5%.”  Yet, of the $300 billion in donations last year, non-cash assets are estimated to be 3% or less.  Seems like the numbers are upside down.

So, why are we not spending some of our precious marketing real estate talking about unusual, non-cash gifts?  (examples include obvious things like art and collectibles but also unexpected assets such as patents, mineral and timber rights, and a seat on the NYSE).

It may be because it can be complicated to structure such a gift so that it’s advantageous to the nonprofit and to the donor.  It may also be, according to Bryan, that nonprofits are burdened by bureaucracy, in the form of gift acceptance policies/procedures that turn off nonprofits and donors alike.

Sounds like we need to get out of the way of a huge opportunity.  Guys like Bryan can facilitate such gifts and make the acceptance of these assets, and the resulting cash, easy.

Phyllis

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Written by Phyllis Freedman

May 18, 2010 at 11:56 pm

5 Responses

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  1. Another “unusual” asset is a Life Estate used as the corpus asset in a Gift Annuity (called a LEGA, a/k/a Gift Annuity for Home). Stephanie Buckley at Pepperdine is using them with a degree of success, so it can be done and done well. Senior managers and boards may want to re-examine their policy manuals to look at this a little closer. Please note: there is approximately $4 trillion in residential real estate owwned by seniors, many who are our donors or prospects. LEGA’s are a natural P/G vehicle.

    Steffan Cress

    May 19, 2010 at 6:59 am

  2. Thanks for passing this info along.

    For the purposes of these calculations, are gifts of securities considered non-cash? If we’re using the terms cash and non-cash, then I think gifts of securites are evidently in the non-cash group. It would then surprise me that securities are less than 3% of all gifts.

    It would be great if you had further details. Thanks again for a great blog.

    Heather Powers

    May 19, 2010 at 11:21 am

    • Hi Heather
      I don’t believe he considers securities non-cash, unless the stock is restricted. I believe when he refers to non-cash assets as assets that are, generally speaking, thought of as illiquid.
      Phyllis

      Phyllis Freedman

      May 19, 2010 at 1:51 pm

  3. My 20+ years of experience as a planned giving professional and fundraising consultant supports the fact that most solicitors ASK FOR CASH! It’s that simple.

    I agree that gift acceptance policies and internal finance office “rules” provide a lot of red tape. But that’s not the reason that only 3% of gifts come from non-cash assets. It’s because we don’t ask for non-cash assets.

    For major gift officers: “When was the last time your major donor proposal suggested non-cash assets as an alternative to cash?” A better question might be “Have you EVER asked for a gift other than cash or securities?”

    For annual gift officers: “Have you ever suggested a gift of stocks, securities or mutual funds, as an alternative to a check or credit card #?” Does your website provide instructions for transferring such instruments?

    For planned giving officers: “Do your marketing materials, newsletters and face-to-face conversations suggest that a non-cash gift as a legacy is welcomed?”

    Remember the fundraising rule: People give what they are asked for. Most of our appeals, written and verbal, suggest that cash is the only option. It may also be the basis of many a rejection – because the donor inferred your request as one for cash and he or she was unable to make a gift of cash at that time.

    I think this discussion is over-due as well as timely. In our present economic environment, even in an upswing; non-cash assets may be the perfect gift for certain donors. But it’s our job to help them consider it as an option.

    Katherine Swank, J.D.

    May 19, 2010 at 6:21 pm

    • Hi Katherine

      Thanks for, as always, a thoughtful and informative comment. I completely agree with you. Our marketing is a self-fulfilling prophecy. We get what we ask for. Part of the reason we don’t ask, in my opinion, is that nonprofits are afraid of these kinds of gifts and burdened by their own bureaucracy. As is often the case, nonprofits can’t get out of the way of their own success.

      Phyllis

      Phyllis Freedman

      May 20, 2010 at 6:33 am


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