Posted May 1st, 1997

In the News …

Church receives $1 million from “frugal” widow Ruth Hendrix, of Piney Creek, North Carolina, said she would leave “a little something” in her will for Mt. Zion Methodist Church. The retired schoolteacher’s gift turned out to be stock and land valued at $1.1 million. Ironically, Ms. Hendrix was not even a member of the congregation. Her parents and several relatives are buried in the church’s cemetery.

Source: The Memphis Commercial Appeal, April 5, 1997

RS reverses ruling, claims “self-dealing”

Two years ago, the IRS issued a ruling to a corporation that wanted to use a trust to pay off pledges to several charities.

An affiliate of the parent corporation proposed to form a charitable trust, contribute to it, and have the trust pay off the pledges. In 1995, the IRS said there was no self dealing, a term that describes improper benefit derived by a private party from tax-exempt charitable dollars.

Recently, the IRS reversed this ruling, stating that no matter how and why a trust is started, if it makes payments from its assets that benefit the corporations, the result is self-dealing.

Source: The Chronicle of Philanthropy, April 17, 1997, p. 53, reporting on PLR 9703020

Mail gift annuity information at nonprofit rates

Nonprofits may continue to use non profit postage rates (Standard A) to send charitable gift annuity promotions.

This is a reversal from early 1996 rulings which stated that charitable gift annuities are a type of insurance which is also available from commercial entities, thus ineligible to be advertised at nonprofit rates.

Source: Gift Planner Update, A publication of the National Committee on Planned Giving, April 1997. NOTE: If you would like a copy of this new ruling, send your request by fax to (202) 628-4383 or e-mail to nfndc@aol.com.

Millionaire population on the rise

Good news for major gift planners: The millionaire population is growing by 15% each year.

Three trends are largely responsible for this increase:

  • increased participation in the stock market
  • more Americans viewing entrepreneurship as the key to accumulating wealth
  • increase of defined contribution retirement plans.

Payment Systems Incorporated (PSI) of Tampa, Florida, predicts that by the year 2010, there will be 7.4 million households in the U.S. with investable assets valued over $1 million (in constant 1996 dollars).

Source: Trusts & Estates, January 1997, page 8.

Wealth and philanthropy

Eighty people with assets of $50 million-plus revealed the following concerns:

  • 33% did not donate more to charity due to a lack of time to make sound decisions about where their money should go
  • financial advisors never discussed philanthropy with 54% of the respondents
  • the most pressing social issues include inadequate educational opportunities, violent crime, and race relations.

Source: Gift Planner Update, A publication of the National Committee on Planned Giving, April 1997. NOTE: Copies of “Wealth and Philanthropy” can be obtained from the Philanthropic Initiative, 77 Franklin Street, Boston, MA 02110 (617) 338-2590.

Volunteering in America

Percentage of population who volunteer       48.8%

      Total number of volunteers                                 93 million

     Average weekly hours per volunteer                4.2 hours

        Total annual hours volunteered                          20.3 billion

Source: The Chronicle of Philanthropy, April 17, 1997, page 37.

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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