The Journal of Gift Planning—Off the Page, Onto the Web

Earlier this year we conducted a survey of readers to learn what they like and what they’d like to change about The Journal of Gift Planning. These comments are typical of the write-in response to the survey:

• Excellent journal. Have a number of issues waiting for me to get to them.
• It’s not that I’m not interested; it’s just that I never seem to have the time to read professional journals of any kind. They all stack up in a pile and every year or so I have to just throw them out without reading them.
• It’s the only publication I insist on reading, no matter how long it’s sat in my “in” box at work.
• Good resource, and I always wish I had more time to study the articles (rather than just quickly review them and save copies for later reference).

It may not surprise you to learn that no one wrote, “I sit down and read it from cover to cover as soon as it comes in the mail.” We don’t really expect that, but we do expect that PPP’s investment of time and resources—both staff and volunteer—in one of our most expensive and high-profile products will pay off in a strong benefit to our members.

There are better ways to make information available for later reference, and better ways to spend the very limited time of busy gift planners than to send them on another trip to the recycling bin. To find those better ways, The Journal of Gift Planning is moving off the page and onto the web. The paper is going away, but the resource remains. The online Journal will be more than a PDF of the printed version. We intend to use all the functionality available to us through the web to make The Journal both more timely and more useful.

When The Journal goes online in 2011, we expect to give readers some new opportunities to interact with content, authors and one another. For example, they might:

• Rate and comment on articles, to help build a body of opinion about their accuracy and usefulness.
• Follow links from articles to related resources.
• Contribute to and comment on blogs that will replace regular columns by the board chair and CEO.
• Interact with authors through online chats.
• Participate in polls and other reader response features that help to identify typical and best practices.

As we make the transition to an electronic format, we’ll continue to seek the advice of volunteers like those who have guided The Journal since its first issue in October of 1997. The transition will also be guided by best practices in the association publishing industry. If you’d like to see a great example of an online journal, I’d recommend Educational Leadership (published by ASCD, formerly the Association for Supervision and Curriculum Development) http://www.ascd.org/publications/educational-leadership.aspx  

We invite your comments in response to this post. Take advantage of the technology to share your opinion and advice with the PPP board, staff and volunteers who will manage the Journal’s transition from print to web.

How Much Competence is Competent?

In each of these cases, the donor wants help and possibly an immediate answer, and referring him/her back to their own adviser may result in the gift being delayed or defeated. 

A. The donor has recently funded a charitable remainder trust with real property. The gift planner has tried to be helpful by providing IRS Form 8283 and Form 709 (gift tax return). After receiving these forms the donor calls and asks the gift planner to stop by sometime soon to help her fill out the forms.

B. The gift planner is visiting an elderly donor who is planning an outright gift of stock. The gift planner suggests that the donor contribute highly appreciated shares that he has owned for more than one year to maximize the charitable deduction.  The donor produces a recent printout of his stock holdings and asks the gift planner to help select the stocks he should give and those he should retain. He wants to make sure he is not doing something counter to current market trends and wants to maintain a balanced portfolio. 

C. The gift planner has just returned from the information-packed National Conference on Philanthropic Planning where he attended a fascinating session on the Charitable IRA Rollover. He feels he understood every word of the lecture and is ready to serve his donors who need this advice. The next day, he gets a call from a longtime donor who has heard about the charitable rollover and wants to know if her IRA is the best asset to use for funding her gift to the current campaign.

In each case, can the gift planner provide a full and accurate explanation of the financial and tax implications? Is the gift planner advising the donor in an area in which he or she is professionally qualified?

In each case should the gift planner encourage the donor to discuss the proposed gift with competent independent legal and tax advisers of the donor’s choice? How much “encouragement” is enough?

Butterflies Aren’t Free

One of the zoo’s long time supporters, a butterfly aficionado, has left her total estate to be divided equally between the zoo (designated to create a new butterfly habitat) and two nieces. The bulk of the estate is in the form of a large piece of land in a rapidly growing community that had a thriving real estate market prior to the current economic crisis. The property has been appraised at a current low of $3M but in a thriving economy at $7M. If the land does not sell for at least $5M, the zoo will not realize enough money to create the new butterfly habitat. The zoo would prefer to wait for the economy to recover in hopes of getting the higher price. The nieces, who are in need of income and are responsible for the taxes on the property, are eager to settle the estate and would prefer to sell now, even at the lowest price.

What are the key issues?

What should the zoo do? 

The Cost of Leadership

You are an accountant, and one of your elderly, but very competent clients has asked you to meet with the gift planner from the community youth center where he made a major outright gift last year as honorary chair of their capital campaign. The client is considering making a planned gift to help fund an endowment to provide for maintenance and upkeep on the new facility. You have advised the client not to make the gift because he has already reached the maximum on his charitable deductions, even with the five-year carry over. You suggest that he wait a few years before making another gift. The client has told you that he thinks it is important to make this gift now, because the gift planner has said that his gift will show leadership and help encourage others to do the same, which is something he would like to do. 

As his accountant, how do you respond to your client?

How do you approach a discussion with the gift planner?

Medicaid Impact?

Ben Goode, aged 77, has arranged for your nonprofit to receive his entire estate at death in order to establish an endowment in memory of his late wife. Ben’s assets are mostly in CDs and, as they mature, he has been forced to accept ever lower rates. Now, in response to your gift planning newsletter, Ben has inquired about putting part of his assets in a charitable gift annuity. At first glance, the CGA would satisfy Ben’s two most important goals: 1) the establishment of the endowed fund and 2) a secure, stable income that is higher than he could earn in CDs or bonds. However, Ben is by no means wealthy, and he has pondered what might happen to him if he exhausted his assets and Medicaid is needed to pay for a nursing home. He has asked you for an opinion on the advisability of this possible gift.

Do you have an obligation to understand this issue?

Should you provide Ben with information? Advice? An opinion?

If Ben gets an attorney or financial planner to “approve” this gift, are you absolved of further responsibility?

What if Ben doesn’t want to pay for the advice of an attorney in this case?

Does the charity include in its CGA disclosures a warning concerning impact on Medicaid eligibility? Should it? And if it does, is that sufficient?

When is Right Wrong?

A long-time donor contacts a nonprofit group and tells them that he would like to leave his entire $4 million estate to the organization. He has no direct heirs. He is elderly and has had a stroke, which has affected his hearing and handwriting; however, he is clearly sharp, intelligent, and competent.

The donor has asked his attorney for assistance. When the nonprofit makes contact with the attorney it becomes very apparent that the “right-wing” attorney is politically opposed to the liberal cause the nonprofit represents. He openly expresses skepticism about the donor’s choice to give them his estate, and says he is suggesting that he (the attorney) become the executor. While the donor has specifically stated, in front of witnesses, that he wished to give his estate to the nonprofit, many months have now passed and the attorney has taken no action saying he was “busy.”

How does the planned giving officer proceed in this situation, both with the donor and the attorney?  

Model Standard I states that the principal basis for making a charitable gift should be a desire on the part of the donor to support the work of charitable institutions. Model Standard VI says that a gift planner acting on behalf of a charity shall in all cases strongly encourage the donor to discuss the proposed gift with competent independent legal and tax advisers of the donor’s choice.

Are the standards in conflict in this case? What is “competent” legal advice? Who makes that judgment?

A Charity by Any Other Name

While working for the local university, a gift planning officer becomes very friendly with Mrs. Kraft, who informs him that she has included the university in her will. The university is her alma mater. The planned giving officer subsequently leaves the university and becomes director of planned giving at a nearby hospital.

Mrs. Kraft, upon learning of the gift planner’s new appointment, asks him to visit her. During the visit she tells him that she intends to change her will, removing the $500,000 bequest to the university and substituting the hospital where he now works. When he asks her why she is doing this, she replies, “I really don’t feel very close to the university anymore, and I really appreciate how I was treated when I was a patient at the hospital.” 

How does the planned giving officer proceed in this situation, both with the client and the hospital? Does he inform his new employer about the facts of this situation?

Is there a duty of confidentiality? Can the former university planned giving officer even discuss this with his successor at the university?

Is the donor’s rationale for changing her bequest—that she had good care at the hospital and no longer feels close to the University—a reason important to the ethical position of the planned giving officer? Was the University’s planned gift lost due to lack of stewardship?

Is there a further issue as to whether the planned giving officer should contact donors of his former charity? Would this be appropriate, or not?

Model Standard VII states that the donor should be encouraged to discuss the proposed gift with the charity to which the gift is to be made early in the gift planning process. Does Model Standard VII Standard extend to cover notice to a charity of a donor’s intention NOT to make the planned gift?

Changing Horses in the Middle of the Stream

A. It has been three years since Madeline’s husband died of cancer. Madeline has made an overture to the cancer hospital where her husband was treated, stating that she would like to make a gift. After reviewing several illustrations of various CRT and CGA options, she decided to make an outright gift. “Cancer research can’t wait for me to die, and I have $8 million in my stock portfolio, so I won’t miss it.” As the gift planner was preparing stock transfer instructions for Madeline, the planner’s long time neighbor and financial advisor called. “Say, Madeline told me about her idea for the hospital, and I’ve got you one better. She can put that same money in a life insurance policy and double her gift. She just signed the application, and I’ll drop it off at your office this afternoon.”  Madeline tells the gift planner that she has known the financial advisor for so long that she’s afraid if she tells him no. It will hurt his feelings and damage their relationship, and she can’t take that risk.

Did the financial advisor act inappropriately? 
Should the hospital attempt to talk Madeline out of the insurance gift?

B. Suppose the shoe is on the other foot…financial planner approaches the hospital and states that one of his best clients wishes to donate a soon-to-be-purchased life insurance policy. The client has never made a gift to the hospital, and her name does not appear anywhere on any data base at the hospital. The hospital’s gift planning officer visits the client prior to the signing of the policy application and convinces her to make a major outright gift or CRT/CGA to the hospital instead.

What should the financial planner do? 
Has the hospital acted inappropriately?