Planned Giving Workbook - download.e-bookshelf.de€¦ · Planned Giving Workbook RONALD R. JORDAN KATELYN L. QUYNN John Wiley & Sons, Inc. Jordan **FM (i-xvi)1R 6/2/02 12:14 PM Page

Planned Giving Workbook

RONALD R. JORDAN

KATELYN L. QUYNN

John Wiley & Sons, Inc.

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Also by Ronald R. Jordan and Katelyn L. Quynn:

Planned Giving, Second Edition: Management, Marketing, and Law(ISBN 0-471-35102-4)

Invest in Charity:A Donor’s Guide to Charitable Giving(ISBN 0-471-41439-5)

Planned Giving for Small Nonprofits(ISBN 0-471-21209-1)

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RONALD R. JORDAN

KATELYN L. QUYNN

John Wiley & Sons, Inc.

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This book is printed on acid-free paper. ��

Copyright © 2002 by John Wiley & Sons, Inc., Hoboken, New Jersey.All rights reserved.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic,mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers,MA 01923, (978) 750-8400, fax (978) 750-4744. Requests to the Publisher for permission should be addressed to the Permissions Department,John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030,201-748-6011, fax 201-748-6008, e-mail: [email protected].

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best ef forts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specif ically disclaim any implied warranties of merchantability or f itness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of prof it or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

Designations used by companies to distinguish their products are often claimed as trademarks. In all instances where John Wiley & Sons, Inc., is aware of a claim, the product names appear in initial capital or all capital letters. Readers, however,should contact the appropriate companies for more complete information regarding trademarks and registration.

Wiley also publishes its books in a variety of electronic formats.Some content that appears in print may not be available in electronic books.

ISBN: 0-471-21211-3Printed in the United States of America10 9 8 7 6 5 4 3 2 1

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About the Authors

v

Ronald R. Jordan is the former Assistant Vice President of University Advancementand former Director of New Mexico State University’s planned giving program. Hehas been a member of the bar since 1975 and is a graduate of the New England Schoolof Law. As an assistant professor at the university, he teaches courses on f inancial plan-ning and consumer electronics. Previously, he taught courses in federal income taxa-tion and estate planning. Jordan is the former Director of Planned Giving at BostonUniversity. He also consults with nonprofit organizations.

Katelyn L. Quynn is Director of Development for Massachusetts General Hospital’splanned and major gift program, and Director of Planned Giving for Partners Health-care System. She was named Planned Giving Professional of the Year in 1996, is a pastPresident of The Planned Giving Group of New England, and former board memberof the National Committee on Planned Giving. She graduated from Tufts Universityand Boston University School of Law.

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Contents

preface xiii

acknowledgments xv

introduction to the planned giving workbook 1

Types of Documents 2Communicate a Message for a Purpose 4Know the Audience and Be Responsive to It 4Use Outlining 6Develop a First Draft 7Bring Others into the Process 8Manage Documents to Meet Deadlines 9

Timing 9Project Planning 9File Organization 9

Design an Effective Document 10Take Advantage of Desktop Publishing 11

Operator 11Evaluation 12

Use Language Correctly and Effectively 12Conclusion 15

chapter 1 Marketing Materials 17

Introduction 17Documents 17Guide to Charitable Gift Planning 18Newsletters 24

ix

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x contents

Planned Giving Columns in Donor Publications 27Conventional Advertisements 28Buckslips 29Use of a Buckslip 29Testimonial Advertisements 31Planned Giving Pieces in Local Newspapers 32Response Form 32Fact Sheets 33Conclusion 35

chapter 2 Preparing Agreements 37

Introduction 37Documents 37Endowed Naming Opportunities 38Creating an Endowed Fund 38Scholarship Funds 39Financing Endowed Funds 39Current-Use Awards 39Fund Description 40

Draft 41Selection of Recipient 41Restrictions 41

Mechanics of an Endowed Fund Description 42Fund Descriptions for Specif ic Purposes 43Life Income Gift Agreements 48

Charitable Gift Annuities and Deferred Gift Annuities 48Pooled Income Funds 48

Real Estate 51Nontraditional Assets 52Conclusion 56

chapter 3 Correspondence 57

Introduction 57Documents 58Preparation 58

Purpose 58Reader 60Scope 62

Research 64Organizing Documents 66

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contents xi

Chronological Order 67Order of Importance 68

First Draft 70Revision 70Conclusion 71

chapter 4 Administrative Documents 73

Introduction 73Documents 73Internal Documents 74

Documents for Donors/Prospects 74Documents for Development Staf f, Administrators,

Deans, Faculty, Physicians, Members, and Volunteers 77Planned Giving Program 79

External Forms 81Prospects and Donors 81Advisors 85

Conclusion 88

chapter 5 Exhibits 89

Introduction 89Documents 89Purposes 89Types of Exhibits 90

Graphs 90Tables 90Charts 91Training Materials 91Estate Planning Documents 96Agendas 102

Using Exhibits 102Troubleshooting 102Conclusion 103

chapter 6 Planned Giving Presentations 105

Introduction 105Documents 106Presentation Formats 106Anticipating the Audience 107

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xii contents

Presentations to Nontechnical Audiences 107Presentations to Technical Audiences 107Audio-Visual Materials 108

Speaker’s Outline 108Supplementary Materials 108Computers 108

Presentation Formats 109Overhead Transparencies 109PowerPoint Presentations 109

Speaking Skills 110Duration 110Vocal Delivery and Tone 110Audience Participation 110Practice 110

Testimonials 111Follow-Up 111Conclusion 111

chapter 7 IRS Forms and Documents 127

Introduction 127Documents 127Charitable Remainder Annuity Trusts 128Charitable Remainder Unitrusts 130Pooled Income Funds 133

Declaration of Trust 133Instruments of Transfer 138

Conclusion 139

appendix (and cd-rom) 141

index 191

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Preface

The Planned Giving Workbook provides nonprofit organizations of all types and sizeswith a comprehensive collection of working documents used in planned giving. Thesedocuments have been designed and perfected by the authors during their more than 40years (combined) experience. Planned giving and development staf f members spend aconsiderable amount of time writing documents to a variety of audiences.The writingtakes many forms including correspondence,marketing materials, proposals, and exhibits.Well-written documents attract donors and deliver the nonprofit’s message.The Workbookprovides advice to the reader on how to modify and maximize the use of these documents.

Like all forms, these documents illustrate one way to present information. Each mustbe customized to meet the needs of the donor and the nonprofit organization.This cus-tomization can be done easily using a Find and Replace tool of a word processing program.Please remember that all documents that contain planned giving calculations must beupdated to ref lect current discount and annuity rates and current tax laws that changeregularly. Readers should update the calculations with their own planned giving softwareto recalculate payout rates, charitable income tax deductions, and other f inancial data.Before use, all forms should be reviewed and approved by the nonprofit organization’s legalcounsel to make certain that they comply with local law and practice and that they areappropriate and compatible with the nonprofit’s mission and objectives.The Workbook andaccompanying CD-ROM contain 425 documents that are divided into seven categories:

1. Marketing materials

2. Agreements

3. Correspondence

4. Administrative documents

5. Exhibits

6. Presentations

7. IRS forms and tax-related documents

xiii

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Acknowledgments

Writing a book takes teamwork, cooperation, and the participation of a number ofindividuals, each of whom makes valuable contributions to the manuscript and text.The authors wish to thank the following individuals for their help in the productionof this manuscript.

● Don Beasley, CPA, Beasley, Mitchell and Company, Las Cruces, New Mexico.Don reviewed the technical chapters in this book and made signif icant contri-butions in improving its integrity and in making a dif f icult subject more under-standable. Don is a skilled practitioner who appreciates the impact that plannedgiving has on a donor and a charity.

● Stephen A. Bernhaardt, Ph.D., holder of the Andrew B. Kirkpatrick Chairin Writing, University of Delaware, Department of English. The authorswish to thank Steve who coauthored the Introduction to the Planned Giving Work-book. The Introduction is a guide to improving one’s writing and a guide to writingef fective planned giving and development documents. Steve is a f ine writer and agreat teacher. Steve understands the importance of writing in the workplace andwe are grateful to him for sharing his expertise with our readers.

● Dianne C. Jordan. The authors wish to thank Ron’s wife, Dianne, for her workas a production assistant in the development of the manuscript. The authors areindebted to her for her generous contribution of time and energy.

● Diana Maria Garcia, Las Cruces, New Mexico. Diana has worked with RonJordan for almost 11 years. As a volunteer,Diana has been involved in many aspectsof this book, and the authors thank her for her able assistance and dedication.

● PG Calc, 129 Mount Auburn Street, Cambridge, Massachusetts, 617-497-4970,www.pgcalc.com. The authors wish to thank PG Calc and its f ine staf f for theirgenerosity in allowing us to reprint PG Calc calculations and for creating such awonderful product.

xv

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xvi acknowledgments

● Our families. The authors thank their families—Dianne C. Jordan and DerekJordan and Barry, Henry, and Andrew Smith—for giving us the time to developand write this book.

● John Wiley & Sons, Inc. As usual, it is always a pleasure to do business with thestaf f of John Wiley & Sons.

● Last, we thank our employers and our donors, who provide opportunities for usto learn our craft.

We hope that the Planned Giving Workbook with CD-ROM exceeds your expecta-tions. We invite your suggestions and welcome your comments.

RONALD R. JORDANKATELYN L. QUYNN

July 2002

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Introduction to the Planned Giving Workbook

1

For planned giving off icers and development staf f members, developing documents is an important part of the job. Nonprofit employees must develop documents thattake many forms, including the drafting of detailed proposals describing complicatedgift options; marketing materials; correspondence to donors, professional advisors, andstaf f members; exhibits; agreements; presentation materials; and Internal Revenue Ser-vice (IRS) and tax-related documents. This chapter, together with the other materialsin this workbook, will help employees of development organizations draft, design, anddevelop a variety of documents that can accomplish their organizations’ goals.

Documents serve many purposes. They attract donors and prospects, help to deliverthe nonprofit organization’s message, and present charitable gift options in a profes-sional manner. Documents also can enhance the image of the planned giving off iceand inf luence the public’s perception of the nonprofit organization. Most important,thoughtful and well-written documents help to sustain and nurture relationships overtime with those donors who share common goals with the nonprofit organization.

This chapter provides an organizational overview of the types of documents con-tained in the Planned Giving Workbook and in the accompanying CD-ROM. In addi-tion, it discusses the issues that readers should consider while preparing documents, andit provides suggestions for developing good writing practices within the organization.

The Planned Giving Workbook contains a CD-ROM with 425 documents to assistnonprofit development staf f, mentors, and planned giving off icers in their jobs. Thesedocuments serve as models, or templates, to be used in planned giving and develop-ment. The CD-ROM contains a wide variety of representative and illustrative docu-ments that are used in a planned giving or development program. Although it is not

This chapter has been coauthored by Stephen A. Bernhardt, Ph.D., holder of the Andrew B. KirkpatrickChair in Writing, University of Delaware, Department of English. He is coauthor with Edward L. Smithof Writing at Work: Professional Skills for People on the Job (NTC Publishing Group: Lincolnwood, Illinois).

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possible to include every document used in a planned giving program, these docu-ments represent those likely to be used regularly and frequently. The documents aredivided into seven categories, and the Workbook devotes a chapter to each type of doc-ument. The seven categories are:

1. Marketing

2. Agreements

3. Correspondence

4. Administrative documents

5. Exhibits

6. Presentations

7. Tax and IRS documents

The following section def ines and exemplif ies each category.

Types of Documents

Planned giving off icers prepare many types of documents for a variety of purposes.The seven types of documents and purposes are listed in Exhibit I-1.

EXHIBIT I-1. Document Descriptions

Type of Document Purpose

1. Marketing Documents Communicate information to groups about charitable gifts to donors, prospects, and other constituents

Newsletters Educate potential prospects about giving opportunities

Planned Giving Inform the public about the nonprofit organization and its servicesAdvertisements

Buckslips Advertise a particular program with a focused informational piece of literature

Columns Describe specific programs and gift opportunities through newsletters

Brochures Educate the general public about detailed gift options, funding opportunities, and a broad array of named funds

Guides Describe in a booklet the gift options, showing how planned giftscan provide financial benefits to the donor

Prospect Letters Seek new relationships and cultivate existing ones

2. Agreements Govern the use, scope, and purpose of a donor’s gift

Endowed Funds Govern the use of funds transferred to establish a permanentendowed fund

2 introduction


Type of Document Purpose

Current-Use Awards Govern a donor’s gift for immediate use

Specific Purpose Funds Create chairs, professorships, or other specific funds

Other Agreements that pertain to real estate gifts, tangible personalproperty, and other noncash assets

3. Administrative Documents Administer the planned giving staff and manage theorganization’s contacts

Office Management Assist in the administration of the office

Donor Management Manage donors and prospects using special tools

4. Correspondence Communicate, educate, and build relationships with individualdonors

Donor Letters Inform about planned gifts and the organization’saccomplishments, cultivate relations

Prospect Letters Renew relationships, cultivate existing ones

Professional Advisor Letters Share information on charitable gift planning

Nonprofit Staff Member Educate internally about gift options and donor strategiesLetters, Memos, and Minutes

5. Exhibits Teach and inform others through examples about the work of the organization

Estate Planning Documents Attract donors, prospects, and staff

Materials for Educate faculty, staff, volunteers, and potential donorsWorkshops/Seminars

Numerical and Data-Based Demonstrate mathematical results and data trendsDocuments

Agendas Organize events, meetings, and workshops

6. Presentations Educate others through speaking about planned giving programs

Planned Giving Presentation Information about planned giving, life income gifts, gifts of assetsother than cash, estate and tax planning

Presentation Thumbnail Contains the same information as Planned Giving Presentationbut in an outline format

7. Tax and IRS Documents Meet tax requirements through a series of forms

Charitable Remainder IRS-approved unitrust formsUnitrusts

Charitable Remainder IRS-approved annuity trust formsAnnuity Trusts

Pooled Income Funds Pooled income fund documents

types of documents 3

EXHIBIT I-1. Document Descriptions (Continued)


Each type of document performs some purpose for the organization. Notice thateach purpose statement in Exhibit I-1 begins with an active verb. In planning giving,donors make gifts, transfer stock, support nonprofits, and write checks. The verbs repre-sent the action that shapes each document. Producing documents is all about doingsomething—accomplishing the work of the nonprofit organization.

In planned giving, the purpose of the document is often to explain the benefits ofa specif ic gift option or to compare dif ferent gift options. Many of the documents areeducational in nature. They are designed to educate donors, prospects, and professionaladvisors about the tax consequences and life income benefits of planned gifts.They alsoare designed to sustain and develop the relationship between the donor and the charity.

When drafting a document, think f irst about purpose. Writers who are clear aboutthe purpose have a much better chance of writing an ef fective document.

Communicate a Message for a Purpose

Documents must communicate information clearly and precisely to fulf ill their pur-poses. The document’s purpose drives all communication. Ask:

● What is the purpose of this planned giving document?● What do I (the writer) hope to accomplish? What is the intended outcome from

this communication?● What are the purposes of my audience? Why should donors want to work with

the nonprofit and support the work of the organization?

Know the Audience and Be Responsive to It

Development documents are powerful tools that carry the nonprof it organization’smessage to all of its constituents. Often the written message reaches donors andprospects in their homes and off ices, places where the planned giving off icer cannotyet enter. The message creates the opportunity for a dialogue between the nonprofitorganization and its constituents. Introductory letters establish the beginning of a rela-tionship that, it is hoped, will continue over time, to the mutual benefit of both thedonor and the nonprofit organization. Subsequent documents nurture relationships,helping those relationships grow and become more meaningful over time.

Instead of thinking about what the writer needs to tell the reader (self-centeredthinking), think about the readers—who they are, what they want, what motivatesthem, what fulf ills their goals (audience-centered thinking). Depending on the non-profit organization, the reader could be an alumnus, a grateful patient, a patron, a vol-unteer, a vice president, a faculty member, a professional advisor, or a board member.Each reader must be treated individually; he or she must be allowed to inf luence thetone and style of the document. When preparing to write, conjure up an image of theaudience—think of specif ic people who come to mind. Imagine how they will respond

4 introduction
