Posted October 1st, 2005

How to Help Donors Enjoy Their Longevity

Life expectancy for males born today is over 74 years. Females can expect to reach the age of 80. 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.

Most of us appreciate that living conditions and medical science have made a longer life possible. However, if we even suspect that money will run out over that longer period, worry may replace gratitude. Many people fear outliving their resources or having their funds consumed by high medical costs.

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

1. Gift plans that preserve the donor’s access to his or her money. Charitable bequests by will, for example, are rarely diminished, but the ease with which they can be arranged and the fact that they can be revoked may make them more desirable to some people. The possibility of change also makes giving through revocable living trusts, beneficiary designations of life insurance and retirement plans, and similar gifts attractive options for some.

2. Gift plans that make payments available to donors as long as they live can be comforting to anyone who fears outliving expectancy. 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 beneficiary does receive payments for life that do not end until that person’s death. Put another way, although one can no longer access the amount donated through an irrevocable life income gift, no one else can invade those funds 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.

3. Gift plans that feature return of principal to the donor at the end of 15, 20, or another number of years. 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 free donors from their concerns so they can give more to your organization or institution. 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 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 encounter 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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