If you are like most people, you are charitably minded and regularly support your favorite charities. However, have you ever thought about what happens to those charities after you are no longer around to make your annual gifts? After your death, the charity which is close to your heart and about which you are passionate during your lifetime will no longer be able to rely upon your support.
Did you know that:
you can help out your favorite charity without having to come up with money during your lifetime?
nonprofit organizations are struggling, just like everyone else as the economy recovers from the recession?
government funding is increasingly at risk as state and federal government budgets see a rise in red ink?
IRAs, 401(k)s, cars, boats and stocks can be left to charity?
although 81.5% of Southeast Michigan residents give annually to charity, only about 3% of them leave a charitable gift at death?
During the first part of this century, an estimated 11 to 12 trillion dollars will be passed from the World War II and early baby-boom generations to their descendants. Imagine the benefits to charities if the 3% number doubled to 6% or went up to 10%, which is still a low percentage.
If you have said “No” to any of the above questions, you are one of the people Leave a Legacy® is working to reach and educate. Leave a Legacy is a national campaign encouraging people to name nonprofit organizations in their wills and trusts or as a beneficiary designation.
Locally, the campaign is coordinated through Leave a Legacy Southeast Michigan (“LALSEM”) in a nine-county-wide region of southeast Michigan, including St. Clair County. The campaign, which is driven by efforts of volunteers from nonprofit groups and financial and estate planning firms, is sponsored by the Planned Giving Roundtable of Southeast Michigan (“PGRTSEM”).
The campaign resulted from a growing concern of nonprofit organizations, who because of increasingly less government funding, are fighting to exist. And the problem worsens because this forces nonprofit groups to rely more on public support. Leave a Legacy is addressing this problem by educating people about the importance of charitable gift planning for the charities we depend on and support.
PGRTSEM is a group of professionals in legal, financial and allied fields as well as fundraising professionals whose focus is charitable gift planning. The purpose of PGRTSEM is to increase the use of charitable gift planning as a tool for the support of charitable organizations through the dissemination of information regarding the advantages and techniques of charitable gift planning.
PGRTSEM is affiliated with the Partnership for Philanthropic Planning, formerly the National Committee on Planned Giving, the leading national organization dedicated to the quality and quantity of planned charitable gifts through education, communication and the promotion of a code of ethics for charitable gift planners.
These organizations offer many resources for donors, charities and financial and estate planning professionals to assist with charitable gift planning. These resources include written and online tools, newsletters, magazines and periodic workshops for training in the area of charitable gift planning.
On Thursday, June 2, 2011, LALSEM is sponsoring its annual Development Day in Dearborn, Michigan, for nonprofits and fundraising, financial and estate planning professionals. For more information about these organizations see www.leavealegacysoutheastmichigan.org, www.plannedgivingroundtable.org and www.pppnet.org. I have been involved with these organizations for nearly ten years and I will continue to support them in the future. If you would like to join or support these organizations or have additional questions, contact Lori Angel at 888-326-7900 or pgrtsem@gmail.com.
In these challenging economic times, the nonprofits and community organizations need help from each of us. I believe it is important to recognize the significance of charitable gift planning and its impact that you can have on the organizations that keep our community moving during times like these.
There are a variety of tools and techniques that you can use to plan your charitable gifts. Because charitable contributions get favorable tax treatment, either you receive a current income tax deduction or your estate receives an estate tax deduction for these planned charitable gifts.
One of the simplest tools you can use is an outright bequest in your will or trust. You can also name a charity as beneficiary of all or a portion of a life insurance policy, annuity, IRA, employer retirement plan or other accounts.
With a charitable gift annuity, you make a present contribution to a charity in exchange for a monthly payment for your lifetime or for a fixed term. Similarly with a charitable remainder trust, you get a monthly or other regular payment during your lifetime, and after you are gone the charity receives the balance of the trust. In a charitable lead trust on the other hand, the charity receives the income for a period of time, after which the entire balance of the trust then goes to your named beneficiaries.
If you want to give the gift that keeps on giving, you can create an endowment fund. With an endowment fund, the principal is saved and only the income is used for charitable purposes. Some wealthy people have created their own private foundation to setup an endowment fund.
However, it may be more economical to contribute to an existing endowment fund at your favorite charity or local community foundation. For example, there are a number of endowment funds at the Community Foundation of St. Clair County. You can contribute to existing funds or with a minimum contribution, you can create your own endowment fund. For more information see www.stclairfoundation.org or call the foundation at 810-984-4761.
What are you passionate about? I have had clients who were lifetime volunteers for Boy Scouts and left funds for Scouting. Others understood that lack of education can hold back our youth from success and left funds to assist under-privileged students in obtaining their college degrees. I personally have left bequests to Rotary to further their good works and to Earth Learning Adventures, which is a local nonprofit organization dedicated to teaching our young people about the earth and our environment.
To determine which charitable vehicle would be right for you, please contact a qualified estate planning professional. By making a planned charitable gift, you can Leave a Legacy and make a difference in the lives that follow.
By: Matthew M. Wallace, CPA, JD
Published edited February 27, 2011 in The Times Herald newspaper, Port Huron, Michigan as: Death needn’t stop charitable giving