The NonProfit Times - March 1, 2008 - (Page 10)

ESTATE TAX Continued from page 9 TALKING TO DONORS OPENS ADDITIONAL OPPORTUNITIES fiscally responsible reform of the tax. Ideally, this shift will continue until Congress arrives at a permanent, revenue-neutral reform.” The American Bible Society (ABS) in New York City has $70 million in planned gifts in place with another $100 million during the next 10 years, a significant number in the next few years. “Estate gifts are really a huge issue because the largest charitable gifts simply come through estates,” said Lewis von Herrmann, director of major and planned gifts, noting the multibilliondollar gift received by The Salvation from McDonald’s heiress Joan Kroc. “Pretty much our largest gifts have always come through estates,” he said. Robin Phillips, director of planned giving at the American Jewish Committee (AJC) in New York City,said a bigger impact than the estate tax might be a dip in demographics, with fewer older people born during the period 80 years ago that could mean fewer bequests. “That’s a major concern,” she said. “Most who give by bequest are not necessarily hugely wealthy,” Phillips said.“The only way they can afford to give might be by bequest, because they need their money during their lifetime.” NPT W hen it comes to the estate tax, some nonprofits plan to take the Joan Rivers approach in the next few years:“Can we talk?” Development officers in the past have used the change in estate laws to urge people to review their philanthropic wishes, said Conrad Teitell, chairman of the Charitable Planning Group and principal at Stamford, Conn.-based Cummings & Lockwood. With a change in the law, many more people consider estate plans, and it’s a good time for charities to do the same, he said. Estate taxes will be changing every year until 2011 unless Congress takes action. Individual estates are exempt from the tax up to $2 million this year ($4 million for couples), with a rate of 45 percent above that level. The exemption increases to $3.5 million next year before disappearing altogether in 2010. The tax comes back at 55 percent in 2011 with a $1-million exemption. Some planned giving professionals at nonprofits view the changing law as an opportunity to open a discussion with donors, whether they are active in planned giving or not. “For those donors that will be affected, it will require making sure their plans are optimum to take advantage of opportunities and minimize the downside,” said Rebecca Locke, senior director, gift planning, for the American Red Cross (ARC).“The upside to this is that everyone affected by the tax will have to keep plans updated and that’s probably good for all of us,” she said. Estate taxes will be changing every year until 2011 “Sometimes they need to strategize about how to do it, but they still give; and discussion of the issue causes people to think about their own plans and that gives us an opportunity to talk about charitable inclusion in those plans,” Locke said. The conversation might open doors to thinking about other planned giving vehicles that might be helpful to both the donor’s tax savings, as well as philanthropic, goals, Locke said. “I always take comfort that there were people giving money to charity, either through estates or life, long before the U.S. tax code existed,” Locke said. “Regardless of what happens to the tax code, there will be people who give. It might just mean it’s a little more complicated,” she said, or take some extra time to explain the different advantages. “So often, if you spend a little extra time with someone, it pays off dramatically in terms of their interest in making a gift,” Locke said, but also often results in a gift, not necessarily of more money but more benefits all around. Just as a change in the law might spark individuals to review their estate plans, nonprofits might also want to re-examine their giving programs. “I would hope…that with more publicity that more nonprofits without planned giving would start doing it,” realizing there’s money to be made, said Cindy Bergvall of Warrington, Pa.-based Bee Bergvall and Co. and a member of the Pennsylvania Institute of CPAs. —MARK HRYWNA 10 MARCH 1, 2008 THE NONPROFIT TIMES www.nptimes.com http://www.causemarketingforum.com http://www.donorschoose.org http://www.chemart.com http://www.chemart.com http://www.causemarketingforum.com http://www.nptimes.com

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The NonProfit Times - March 1, 2008 Fuel Costs Eating Up Food Banks California Legislation Pushing Foundation Funding Diversity Estate Tax Won't Die Contents Who...When...Where...How...What? Red Cross Cuts Jobs, Regional Support In $200 Million Deficit General Ramblings: What the....? Briefs Taxing Issues: New for 2008 Foundations: Rebooting At Gates Mail Drove Donors to Give Online Streetsmart Nonprofit Manager: The Power of the Founder Software: Technology Innovation Calendar Fundraising Guide NPT Jobs Resource Directory AFP International Conference Insert

The NonProfit Times - March 1, 2008

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