As 2003 draws to a close, Robert F. Sharpe and Company is concluding its fortieth year and entering its fifth decade of service to America’s philanthropic community.
In 1963, when Robert F. Sharpe, Sr., established the company, many of today’s well-known industry associations, such as the Council for Advancement and Support of Education (CASE), the National Committee on Planned Giving (NCPG), and the National Catholic Development Conference (NCDC), did not exist. There were few other resources available for organizations trying to expand beyond the traditional fund-raising methods of direct mail, annual funds, special events, and campaigns for capital needs. Those seeking to achieve long-range financial security and provide for solid future support were largely left to their own resources.
Since the Tax Reform Act of 1969 had yet to be enacted into law, there were also few guidelines for the creation of what are now known as planned gifts. Only a small handful of persons nationwide were engaged in sophisticated charitable gift planning, and they communicated with each other only through networks developed as they worked with donors, advisors, and other institutions.
The birth of the company: consulting
With a background in estate and financial planning and major gift fund raising, Robert F. Sharpe, Sr., believed he could use his experience to help charities develop stable, ongoing funding programs. Beginning in St. Louis with a handful of clients, much of the company’s early work involved one-on-one training of staff members. The company also assisted in the creation of communications materials designed to motivate and educate potential benefactors.
Many of the nation’s most successful planned and major gift development efforts can trace their roots to efforts begun in the early 1960s under the tutelage and guidance of Sharpe consultants. Sharpe’s relationships with many of those organizations and institutions continue to thrive today.
Training
As the number of the company’s clients grew, it became clear that it would be more cost effective and beneficial for everyone involved to train clients in groups. The new seminar setting gave clients the opportunity to share their experiences and develop relationships with others in their chosen field. The first Sharpe seminars were held in 1967. Since that time, over 20,000 nonprofit executives have attended one or more Sharpe-led training programs.
Seminar topics over the years have included ways to plan, implement, and market major and planned gift development programs. Content is intentionally balanced among the who, why, what, when, and how of gifts. Sharpe has from its earliest days stressed the fact that the tax and financial benefits of gifts are the same for a donor regardless of the charitable recipient. As a consequence, it is vital that institutions learn how to successfully meld the right “plan” with the donor’s true underlying motivation for the gift, whatever that may be.
Creative services
From its inception, Sharpe has endeavored to meet the need for accurate, timely, and effective means of communicating the benefits of various gift planning opportunities to donors and advisors. The original “Charted Giving Plans,” an overview brochure, was developed as a training and communications tool in January of 1963. Today it remains a popular publication along with dozens of other titles produced in a number of formats.
Sharpe continues to assist its clients in the creation and production of publications that are not only motivational and educational but accurate in light of tax laws and the insurance, securities, and banking regulations that serve as the technical underpinning of today’s most popular gift planning vehicles.
A period of growth
The Sharpe company relocated from St. Louis to Memphis in the mid-1960s. During this period the company continued to develop its reputation as the leading consulting firm specializing in the creation of what over time became known as “deferred giving programs” for charitable organizations and institutions.
The company expanded its creative services division during this period and continued to conduct training programs nationwide. In 1968 Sharpe began publishing the monthly Give & Take newsletter for its clients and others who wished to receive it. Designed to be a source of helpful information for development executives, Give & Take includes tips, ideas, and case histories of interest to fundraisers as well as information about the company’s services.
The lead article of Give & Take’s inaugural issue addressed the risk associated with waiting on tax law revision. At the time there was a great deal of controversy surrounding what many perceived as the abuse of deferred gift vehicles. Leaders in Congress at the time believed that the purpose of charitable remainder trusts and certain other gift planning tools had been distorted by those who were utilizing these plans as the basis of tax shelters that drained potential tax resources and provided little economic benefit to the ultimate charitable recipients.
After President Nixon signed the 1969 Tax Act into law, Sharpe immediately conducted workshops in New York, Chicago, and Los Angeles on how the tax changes affected charitable giving plans. From that point forward, Sharpe played a central role in helping to educate nonprofits in the nuances of the 1969 Tax Act and how to plan gifts that were beneficial to both donors and charities under the provisions of that law.
The complexities brought on by 1969 tax reform legislation provided a catalyst for the company’s continued growth. As charitable organizations geared up to respond to the changes, they needed consulting advice, staff training, and marketing assistance. The company responded by growing to meet this demand.
From “deferred gifts” to “gift planning”
In 1972, Sharpe served to popularize the term “planned giving” through articles in Give & Take and elsewhere. The term “planned giving” spotlights the fact that virtually all “deferred gifts” are planned, but not all “planned gifts” are, in fact, deferred. Note the following quote from the August 1972 issue of Give & Take:
“A donor usually considers a current gift to your institution as a cash outlay now. To make a deferred gift, a person decides to give at some future date, either a number of years from now or at death. A deferred gift is a present decision to make a future gift, evidenced by a legal contract.
“While the name, ‘deferred giving,’ is the best known to professionals in the field, it is not a term that communicates very much to the average donor. Therefore, we suggest the term ‘planned giving.’ When a person makes a planned gift, it suggests forethought.”
In 1987, Robert F. Sharpe, Jr., suggested in a Give & Take article entitled “A Rose by Any Other Name” that the term “gift planning” might better describe the activity the company endeavored to support, based on the fact that the company’s philosophy was to put the “gift” before the “plan.” Today that term is used in the titles of hundreds of nonprofit executives.
Changing times
By 1981, when Robert F. Sharpe, Jr., joined the firm, the Sharpe company had grown to a staff of nine persons. In that year the enactment of another piece of major tax legislation, The Economic Recovery Tax Act of 1981 (ERTA), served to greatly reduce estate taxes for most Americans, while creating an unlimited marital deduction that served over time to shift tremendous amounts of resources to surviving spouses.
As asset values grew in the 1980s, the 1986 Tax Act brought increased taxes on capital gains while reducing the tax on other income. Interest in planned giving grew dramatically. By the late 1980s, much as in the early 1960s, a segment of planners had discovered the potential for using planned giving vehicles to avoid capital gains tax and to create a “shelter” for tax-free growth of assets. Limits on retirement plan contributions also helped fuel this interest.
In 1987, the National Committee on Planned Giving (NCPG) came into existence and served to greatly reduce abuses of planned gifts by allied professionals and charities that in some cases were marketing gifts as tax shelter “products” and paying commissions to those who “sold” them. A group of leading charitable institutions that composed the CANARAS Group helped develop an industry response to this activity, which in turn helped form the basis of the Model Standards of Practice for Charitable Gift Planners adopted by NCPG in 1991. Sharpe was active in promoting the CANARAS statement and the NCPG Model Standards in Give & Take and elsewhere.
In 1995, Congress enacted the Philanthropy Protection Act of 1995 (PPA), which served to codify the prior Securities and Exchange Commission staff position regarding the status of planned gifts under securities law and made it clear that gift annuities, pooled income funds, and certain other planned gifts were, in fact, securities that were exempt from registration only if they were marketed as gifts with no commissions. During that time, Sharpe was a leading source of training on the ramifications of securities law regulation and helped guide the field back to its philanthropic roots in the late 1990s.
Approaching the present
The 1990s also marked a period of change at Sharpe. In 1993, Robert Sharpe, Sr., retired from Sharpe, and the company contributed the National Planned Giving Institute to the College of William and Mary. Robert Sharpe, Sr., continued as the director of the Institute after his retirement from the company until his death in 2000.
Between 1981 and 2000, the Sharpe company grew to nearly 50 employees. Ongoing growth in the field of planned giving and a vibrant economy contributed to record levels of interest in its services. Over the past decade Sharpe has served nonprofits in virtually every city in America. Teams of Sharpe consultants and marketing and technical experts continue to be matched to meet the unique needs of clients.
Sharpe clients continue to lead the field to record levels of success, with many of their greatest results occurring in the challenging period since September 11 and the subsequent economic and political turbulence as interest rates reached 40-year lows and the war on terrorism began.
A new look for the future
As the company begins its fifth decade, the field of gift planning clearly faces both challenges and remarkable opportunities. The company continues its commitment to its clients to help them create and maintain the optimal level of services necessary to secure a firm base of current and future financial support. This normally involves a “group” from Sharpe working with a “group” from the client. In recognition of this approach, the company will next month unveil a new logo and look, The Sharpe Group.
The company’s new name and look represent the next stage in Sharpe’s continuing evolution in response to the changing needs of the nonprofit community and our society as a whole. Look for more information about further ways The Sharpe Group will help its clients achieve new levels of success in programs designed to assure their long-range financial security.
