Posted February 1st, 2015

How to Help Donors Enjoy Their Longevity

donor longevitySkilled gift planners can help alleviate their donors’ fears.

Life expectancy for males born today is over 76 years. Females can expect to reach the age of 81. Because the longer one lives, the longer one is expected to live (actuarially), today’s 70-year-old can look forward to 15 or more years of retirement.

While many may be grateful that living conditions and medical science have made a longer life possible, if we even suspect that financial resources will be exhausted over that longer period, worry may replace gratitude. Out- living one’s resources or having funds consumed by high medical costs is a valid concern for many.

As a development officer, you can often help curb the fear of outliving one’s financial resources. If you feel such a concern is hindering the actions of a donor with whom you are working, you may wish to suggest strategies that could make the person feel more comfortable with his or her decision to give.

Gift plans that preserve the donor’s access to his or her money.

The ease with which charitable bequests, retirement plan remainder trusts, life insurance beneficiaries and similar arrangements can be arranged and the fact that they can be revoked at any time until death make them highly desirable for many. (See When a “Will” Means Maybe for precautions you may want to consider to safeguard such gifts.)

Gift plans that make payments available to donors as long as they live.

Such plans can be a welcome addition to financial plans for those who fear outliving their resources. Charitable gift annuities, pooled income funds and charitable remainder trusts are examples.

While access to the funds initially given for the gift plans is not possible, the donor retains payments for life that do not end until the donor’s death. Put another way, although one can no longer access the amount donated through an irrevocable life income gift, no one else can either.

Such plans can also include provisions for spouses or other loved ones who may survive the donor. Both features make these gift plans helpful in retirement planning as well as giving.

Gift plans that feature return of principal to the donor in the future.

Charitable lead trusts are typically created to pass assets to members of a younger generation, but they can also be structured to instead return funds to the donor later in life, if desired. Access to principal is thus preserved while the donor makes what may be a very substantial gift at a younger age.

In all cases, your role as a facilitator of giving puts you in a position to help free donors from their concerns so they can fulfill philanthropic goals that might otherwise be thwarted. To that end, a development officer needs to be knowledgeable about the more common objections to making larger gifts that are rooted in legitimate financial concerns and the planning opportunities that can help overcome them.

To learn more about why donors give, why sometimes they do not and how you can make the most of every interaction with your donors, attend one of Sharpe’s popular seminars. Visit www.SHARPEnet.com/seminars for more information about upcoming seminar dates.

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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