Dr. Russell James has gone and done it again, creating a meaningful book, which reinforces the importance of why visualization is essential in major charitable giving both as a major and planned gift. Visual Planned Giving: An Introduction to the Law and Taxation of Charitable Gift Planning.
A must read for anyone who spends time planning out how best to market to donors !
Why do I call Peter Gilgan a Power Donor®?
It’s simple, just imagine a world where everyone donated 1% of their net worth; if you are worth $1 million that would be a $10,000 donation to charity.
Now, imagine donating 8.3% of your net worth in your lifetime to charity using the same net worth calculation – your donation would be $83,000. Well that is just what Peter Gilgan, the founder of Mattamy Homes in Canada did today, adding to his philanthropic record by donating $30 million to St. Michael’s Hospital in Toronto. This donation brings his lifetime giving total to $150 million against his $1.8 billion in holdings.
What can Peter Gilgan’s giving teach us?
It shows that he could never conceive of how much to give if he did not undertake any planning for his finances, his estate and leading to his philanthropy. The same can be said for a recent donor to a local charity who took the time to understand that she lacked personal financial planning. She spoke with us at FUNDING matter inc. to say that she didn’t understand if she had enough money to live the lifestyle she was accustomed to while still providing for her heirs and leaving something to her favourite charities. After walking her through an illustration of a proper estate and financial plan, she quickly understood and saw first hand the looming tax that could be used for charitable giving. In the end she became a Power Donor®, actually donating more than 1% of her net worth to her favourite charities.
Each professional advisor can leverage their client relationships to help achieve them establish unique and inspiring legacies through philanthropy, much like Peter Gilgan’s recognized legacy of landmark donations to the charitable sector.
William Petruck
www.giftabulator.com
Money is often cited by relationship experts as the number one reason for relationship failure, in particular marriage. Why is money such a strong factor in determining one’s success in marriage, longevity and health?
Maybe it really isn’t money that is the major factor but that the underlying issues which relate to the money that are the problem.
How can couples get on the same page?
It is important for each partner to understand why the other feels the way they do and develop a mutual understanding. Whether it’s generosity or thriftiness, communication is the key to understanding one another’s views and unspoken preferences and bias.
When gifting is made, how are the spouse, children and charity taken into consideration?
Discussing money topics in detail is the beginning of the process. When I meet with lawyers, they tell me that couples often don’t have an idea of how to split up or allocate their life’s assets to family and community. In many cases this is the first time that the couple has given thought to who gets what. It’s not surprising then that 70% of individuals don’t have a current will.
I recently had dinner with an accountant who is acting as trustee for an estate that is being contested by two sisters in their 60s. They are not talking because they can’t agree on how to divide their mother’s antique teacups and fairly apportion her funds to her grandchildren. These sisters are literally throwing 60 years sibling friendship out of the window by failing to communicate.
Plan your estate through effective communication to ensure minimal headaches and heartaches for your loved ones and to minimize legal fees and taxation to benefit family and community.
I was encouraged to see the Laura Saunders’ article Tax Smart Philanthropy Made Easy in the Wall Street Journal (WSJ). This has been a key element of what we have been speaking to advisors, charities and individuals about in getting their estate, financial houses in order to minimize taxation on their capital gains now and in their estates. Tax planning means that advisors and their clients need to take an inventory of all assets now and over time to ensure that what is left over and taxed can be put to other uses like philanthropy.
The WSJ article talks about the increase in popularity of Donor Advised Funds such as those offered by Fidelity, Schwab and Rowe. The other option is to give directly to charity and see the impact of your giving. The Donor Advised Fund model is a very smart approach if you are undecided about which charities you may want to leave your money to, and the taxman is not one of your chosen beneficiaries. It is also a wise strategy for future generations who will invariably be approached to give to charity. Imagine having the luxury of helping society with pre-tax dollars.
An important element in smart tax planning is being able to see or have someone illustrate to you how lowering taxes can be achieved and what is required. All too often, advisors do not spend the time to engage in these types of discussions for a number of reasons including, lack of knowledge or not having the tools to educate and illustrate these concepts to their clients. Not-for-profit organizations are equally guilty of not informing and engaging their members with the information in a concrete manner. That is why historically, the number of bequests to charities has remained in the 4% to 6% range for many years. Guess who is getting the rest after the family? You got it, the taxman.
The solution to this is GIFTABULATOR, an estate, financial and philanthropic planning app with an easy to understand model for planning purposes. GIFTABULATOR easily calculates how much money an individual will be left with, can pass on to their heirs and how much should be donated now or as part of an estate to reduce taxes at any point in the investment cycle. Can you imagine now how much you should give now to reduce your taxes on various assets? Call it Donate to Eliminate.
Laura Saunders’ article in the WSJ hits home about leaving a legacy for yourself, your family and your community.
Connect with GIFTABULATOR at app.giftabulatorusa.com
e. wpetruck@fundingmatters.com
Top 5 Reasons you need to pay attention to the small donor:
1. They give without any attachments to how their money is used. They trust the charity to invest the money in the areas of greatest need and help the charity deliver on its mission.
2. There are many more of them and cumulatively their giving adds up to alot. Just imagine all the $10, $25 and $100 donations that are are made and how much that adds up to at the end of the year – it’s mind boggling.
3. They usually influence their friends to join them in what they are doing. Giving is contagious and can have a profound effect on the behaviour of others and their pattern of giving.
4. The key form of recognition is usually a simple thank you letter or phone call from the charity.
5. The small annual donor represents the greatest opportunity for a planned or estate gift only if approached and educated about the benefits. Since a majority of individuals do not have a current estate plan which contains a provision for a charitable gift the opportunity will be missed if not followed up.
Be nice to your donors they are your life blood for current and future success.
