What is planned giving?
“Integrated philanthropy,” says Marc Hoffman, the Editor-In-Chief of the Planned Giving Design Center (PGDC), an online resource for professional advisors and non-profit organizations that provides news, research and tools to help gift planners.
“A planned gift is any gift, either outright or deferred, that considers the donor’s tax, financial and estate planning,” says Hoffman.
Because planned giving involves the services that so often comprise the core of an accountant’s practice, it can be an ideal subject matter to discuss with clients. By learning more about planned giving, accountants can enjoy double the rewards. In a personal sense, it can change the way you donate to charitable organizations. In a professional role, it can have even greater repercussions through your work with clients and their desire to help the community.
“A planned gift enables a donor to give more efficiently,” explains Hoffman, “which often allows them to give more.”
The accountant’s role in planned giving
Clients know their accountants as trusted advisors, giving them access to the most private personal and financial information. An accountant earns this trust through ethical behavior and consultation. The role of planned giving advisor often fits well into the traditional responsibilities and services of an accountant, even if many aren’t aware of the positive influence they can have on the actions of their clients. Hoffman notes that many advisors do not approach the subject with clients because they aren’t sure how to do it or if they are in a position to do so.
“One accountant once told me he knew who his charitably inclined clients were simply by reviewing their tax returns,” says Hoffman. “Therefore he only discusses giving with those clients. He was surprised to learn that many mega-gifts have come from people without a demonstrated history of giving.”
“The fact is that many people are philanthropically predisposed, but they haven’t been asked,” says Hoffman. “Likewise, they may have the financial capacity to make a large planned gift but may not have done so because they are unaware of the techniques and vehicles that can help them accomplish their personal financial and philanthropic goals.”
Actively teaching clients about planned giving
Once an accountant has made the decision to advise clients in planned giving, Hoffman suggests a smart first step is to learn as much as you can about the tools and techniques of the business.
“I would recommend that planners have a well-rounded planned giving education,” says Hoffman. “Many planners limit their education to the most popular of planned giving vehicles.”
Clients often lose out when this happens, both in tax breaks and the opportunity to give as much as possible. Advisors should continually stay up-to-date on the latest methods, regulations and tax laws. The more an advisor knows about planned giving and the matters that affect it, the better they can serve a client and, in turn, their client’s charities of choice.
The right resources, the best information
Because it is so important for successful planned giving advisors to be aware of the latest news in the industry, finding the best sources for this information is crucial.
“That is why we created the Planned Giving Design Center,” explains Hoffman, “to provide educational resources to professionals.”
The PGDC site, www.pgdc.net, is the largest online destination devoted to planned giving. According to Hoffman, the site is-first and foremost-a news service. Legal editors at the organization compile the latest news releases and reports from the IRS, courts and other sources affecting charitable taxation. A summary is then written and posted on the site, and all registered members receive an email with a brief synopsis of the news, with the option to read complete stories.
The PGDC also publishes the online Gift Planner’s Digest, a forum for independently authored articles on everything from marketing suggestions to technical discussions. And the resources don’t stop there. Thousands of additional pages provide source documents, case studies and implementation guidelines. The site is free because it is underwritten in different communities by hosting organizations that work with planned giving experts in that same area.
“The Planned Giving Design Center creates a bridge of knowledge and understanding between nonprofit organizations and professional advisors,” says Hoffman.
The road ahead for planned giving
Just as it has changed most other things in the world of finance, technology-most notably the Internet-has drastically changed planned giving. And it seems that the evolution will continue as tools and resources become more advanced.
“The nonprofit sector has been the last to embrace technology,” says Hoffman, “but now there is some big money being invested in this sleeping giant.” Direct mail no longer dominates the marketing efforts of non-profits. Now they turn to online communities, Internet-based member registrations and actual online contributions by credit card or e-check.
“In addition to non-profits creating high-powered web sites, donors will be able to manage their philanthropy through virtual foundations that help them administer their gifts and assist them in researching the organizations they would like to support,” predicts Hoffman.
But technology is not powerful enough to replace every aspect of charitable giving.
“What technology can not replace,” says Hoffman, “is that one-on-one contact that only comes with being in front of a donor. Sure, you video stream a tour of a hospital’s neonatal intensive care unit over the Net, but nothing replaces being able to stand next to an isolette and realize the newborn you are looking at could fit in the palm of your hand.”
Making a difference for the right reasons
Accountants may think that most clients choose to do some sort of planned giving for tax reasons only, but more often the act of giving does not originate from a self-centered thought.
“What we always have to keep in mind,” says Hoffman, “is that although planned giving can provide some powerful financial incentives to donors, most people don’t give for tax reasons.”
Accountants-in an advisory role-have the opportunity to help clients express their charitable wishes and allow them to give as much as possible.
“I was once told that people give for two reasons: to save lives or change lives,” explains Hoffman. “We’re just happy to be playing a small role in helping that happen.”
Special thanks to Marc Hoffman for his help with this article. Currently the Editor-In-Chief of the Planned Giving Design Center, LLC, Marc has also been a planned giving officer and the CEO of several hospital foundations, and is a foundation faculty member at the American Institute for Philanthropic Studies.
The Planned Giving Design Center is an excellent on-line resource for accountants and other professionals interested in planned giving. For more information, please visit www.pgdc.net or call the organization at 704-849-0731.
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