A Planned Giving Program Primer

April 2, 2019

What is Planned Giving?

• Part of your overall development plan but expands

your focus to include deferred or future gifts

• Planned gifts have some complexities and unique

considerations • More planning required

• Involvement of advisors and other professionals

• Part of strategic philanthropy – seeing the whole

donor, their full philanthropic plan

Common Planned Giving Vehicles

• Bequests – gifts in wills

• Gifts of publicly-traded securities

• Life Insurance

• Retirement Assets (RRSPs/RRIFs)

• Charitable Remainder Trusts

• Gifts of Residual Interests

• Charitable Gift Annuities

Why Create a Planned Giving Program?• Bequests are a great way for average people to leave

above average gifts!

• Plus, bequests are one of the least expensive gift vehicles

for organizations and make up the majority of planned

gifts

• Committed current donors may already have included

your organization in their estate plans

• Help build the long-term sustainability of your

organization

• Gain a fuller understanding of your donors’ philanthropic

interests and plans while increasing their giving options

Are You Ready for Planned Giving?

• Assess your organization’s readiness

• e.g. maturity level

• e.g. reputation

• Review your base of support

• Is your leadership willing to invest in Planned

Giving?

• Does your organization have the capacity to

administer a Planned Giving program?

• Obtain board approval

• Appoint a planned giving committee

• Develop policies and guidelines

• Identify types of gifts to accept

• Develop a marketing plan

• Know your audience

• Importance of Stewardship

Steps to create a Planned Giving Program

Making the Case to your Board

• Planned Giving programs allow for long term

planning and to build sustainability

• Donors often have a greater capacity to give at

death than during their lifetimes

• Opportunity for donors to self identify

• Once identified, you can thank donors while

they are still living, which can encourage more

current giving

• Start with a modest planned giving program

Structures, Policies and Supports

• Ultimately, your board is responsible for

planned giving, gift acceptance and conditions

• Decide types of gifts that will be accepted

• Identify who can approve planned gifts

• Build internal expertise

• Identify external supports e.g. financial advisors

• Consider committee structure

• Budget for professional guidance

Committee Considerations:

Committee roles• Oversees the planned giving program and the work

of staff on behalf of the board,

• Provides advice and guidance to staff,

• Advocates for the program

Staff roles• Hire additional or responsibility of an existing staff

person to devote a portion of their time to program

• Limited scope for the program is recommended at

least initially, focus on outright gifts and bequests.

Gift Acceptance Policy:• Important tool to anticipate and avoid legal and ethical issues

• What conditions or restrictions are acceptable to your

organization?

• Almost all charities accept unrestricted bequests and

unrestricted marketable securities

• Some charities do not accept more complicated planned

gifts (e.g. annuities)

• Consider your capacity (internal and external)

• Reviewed by an expert and adopted by your board of

directors

Additional policies and guidelines

to consider

• Code of Ethics

o CAGP resource

• Bill of rights

o AFP resource

• Working with people who may be in a vulnerable

circumstance

• Best practice to meet in pairs if possible (protects the

donor and your organization)

Types of Planned Gifts

Bequests - Some considerations

• Gift is deferred – commitment might be made

but you will not receive the gift for many years

• Need file protocols

• Manage leadership expectations

• donor doesn’t see impact of their gift

• Cannot thank donor if wait until gift is received

Bequests - Some considerations

• Bequests are largely unknown

• Gift is revocable – donor can change their mind

• No current tax benefit to donor

→ Create opportunity for donors to tell you

→ Create opportunity to engage them now

Types of Bequests

Specific: A distribution of a specific dollar amount to a

specific charity

Conditional: A distribution made after other conditions or

directions are met

Residual: A distribution made after other payments, debts

and gifts are fulfilled

Designated: A gift directed to a specific area or program

Undesignated: A gift that is not directed to a specific area or

program

Sample Will Wording

Undesignated/unrestricted – either specific or

residual

I give The Winnipeg Foundation the sum of $ ____ [specific] or ____%

or the residue of my estate [residual] to establish the _____ Fund. It is

my wish that this gift be held in perpetuity and that the annual

grantmaking therefrom as determined by the Spending Policy of The

Winnipeg Foundation shall be used for general purposes at the

discretion of The Foundation’s Directors.

Estate Administration

• Learn the administration process

• Even once realized an estate gift can take more

than a year to be fully finalized

• keep good files and records

• Review mail or other communication

immediately -> time sensitive deadlines

• Invest in legal counsel for your first bequest and

any complicated gifts

Estate Administration

• Know information you are entitled to as beneficiary– Specific gifts: request copy of Will or at least provision

– Residual: request copy of the Will, Inventory of Assets, full and

final accounting

• Releases – release of rights, not just payment– Know who can sign for your organization

– Interim vs. final

– Review carefully and seek legal advice if you do not understand

• Signing off on fees (lawyer and executor)– As beneficiary your consent to fees charged is required

– Review rules for what lawyers and executors are allowed to charge

Did you know?

• A bequest can be made to The Winnipeg Foundation and

directed to your Agency Fund in the Will

• If bequest is being directed to an Agency Fund here we

can record the commitment and include your donor in

our stewardship efforts

• If bequest is coming directly here in the Will we also take

care of all estate administration

• Questions about responding to inquiries from donors?

Contact our team and we can help you respond!

Gifts of Securities

• Publicly-traded securities

• NB: shares in private companies are treated differently under the

Income Tax Act and by CRA

• Donor may transfer the shares themselves (in kind)

to your charity and receive a tax receipt for the

fully appreciated value of their gift without paying

capital gains tax

• Receipt value is based on the closing share price

on date of transfer

Benefits to the DonorSell Shares &

Donate Cash

Donate Shares

Directly

Fair Market Value $10,000 $10,000

Cost Basis $2,000 $2,000

Capital Gain $8,000 $8,000

Taxable Gain $4,000 (50%) $0 (0 %)

Tax credit (assuming

25%)

$2,500 $2,500

Tax on gain (at 50%) $2,000 $0

Tax Savings $500 $2,500

Attractive option for:

• Investors of any age who have appreciated stocks or

securities and wish to donate them

• Donors who wish to simplify their affairs by divesting

themselves of some of their holdings

• Estates - transfer securities instead of liquidating

investments and making a cash gift*

• Donors who intend to leave a bequest may consider

advancing their gift through a gift of securities

*This option may depend on how the Will is worded. Good to raise with

a donor before they see their lawyer to draft their Will.

Gifts of Securities – considerations

• Requires a brokerage account

• Work with broker to develop transfer process,

including transfer forms

• Have a staff point person

• Provide information on your website.

• Be aware of timelines

• NB: Donors can transfer publicly-traded securities

electronically to your Agency Fund at The Winnipeg

Foundation via our broker at no extra cost

Life Insurance:

• Understand the 3 Ps – proceeds, policy and

premiums

• Gifting the Proceeds vs. the Policy

• Gift of Proceeds – charity is named to receive

the proceeds paid out on death• Revocable designation

• Donor retains control and ownership

• Receipt for the proceeds once received

Life Insurance• Gift of Policy – charity becomes the owner of the

policy and the beneficiary of the proceeds

• New policy – typically receipt future premium payments

annually

• Existing Policy – typically receipt for cash surrender value

of policy at time of ownership transfer plus any future

annual premiums paid

• Always review the policy prior to acceptance

• Premiums - obtain confirmation from issuer (e.g. copy of

statement or receipt) of amount and who paid

Life Insurance

As a general rule:

• If charity named as beneficiary only -> proceeds

are a gift. Tax receipt issued to owner of policy (i.e.

the estate)

• If charity owns the policy -> proceeds are not a

gift. No tax receipt

(Receipt was issued when the policy was donated and/or for

annual premiums)

Retirement Assets

• Retirement plans (RRSPs/RRIFs) may be

donated

• By beneficiary designation

– Revocable during lifetime

– Receipt proceeds when received

• By bequest

– If there is no beneficiary designated, retirement plan

assets becomes part of estate assets and should be

dealt with in Will

Marketing your program:

• Create a fact sheet that explains planned giving

• Provide information on the vehicles that your

organization accepts

• Provide testimonials, contact information and

sample bequest wording

• Ensure your correct legal name and charitable

registration number is clearly listed on your

website

Marketing your program:

• Use existing publications

• Reminders at events

• Add a check box on pledge cards

• Signatures on email messages “Would you like

more information on how to include a gift in your

will?”

Your Audience:

• Current and former employees

• Board members

• Longtime donors

• Donors, friends, retirees, volunteers or past

volunteers of your organization

o Particularly in the age 45 – 55

o Donors thinking of retirement as estate plans

are often revisited

Stewardship:Ongoing in Planned Giving cycle:

• Thank and appropriately acknowledge donorso Personal notes

o Cards

o Phone calls

o Visits

• Ensure gifts are used as intended

• Maintain confidentiality

• Demonstrate impact

o Build awareness of organizational needs

o Share stories based on donor interest

Resources• Community Foundations of Canada – 6 Gift Options for Canadian

Donors (https://www.communityfoundations.ca/guide/professional-

advisors-eresource/six-gift-options-for-canadian-donors/)

• CAGP Code of Ethics (https://www.cagp-acpdp.org/en/code-of-ethics)

• AFP Bill of Rights (https://www.spelman.edu/docs/giving-docs/donor-

bill-of-rights.pdf)

• Community Legal and Education (CLEA)- Wills and Estates

(https://www.communitylegal.mb.ca/unrepresented-litigants/wills-and-estates/)

• Public Guardian and Trustee of Manitoba - “Deceased Estate

Handbook”(https://www.gov.mb.ca/publictrustee/pdf/deceased_estate_handbook.en.pdf)

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