The Nonprofit FAQ

What is Strategic Planned Giving?

In a message dated 96-02-19 16:00:08 EST, Charles K. Alexander II wrote: Dear Dr. Nill: I am a graduate student in the Public Policy program at the University at Albany. I recently made a copy of your posting on the ARNOVA list serve of Jan. 24 called "The Wealth Release: A Primer", and discussed it with the E.D. of the Albany Girls Club, Inc., where I am serving an internship in development. I've found your postings on the Great Wealth Release very interesting, and have raised the issue in both of my classes on non-profits. I'd appreciate it if you could clarify one point for me, however. What exactly is the difference between traditional and strategic planned giving? You are clearly an advocate of the latter, but did not explain what makes it either strategic or more effective than the former in tapping this coming wave of wealth. Strategic planned giving also sounds like it is a fairly recent development, and I was wondering if you could refer me to any literature on the topic? CKA Steven J. Nill replied: Excellent question. Here goes: Planned giving is the discipline of structuring a gift to a nonprofit institution in such a way as to address the financial and tax needs of the donor and the donor's family. It is, in my view at least, a subset of estate planning, though it borrows heavily from financial planning and asset management disciplines. Though it presupposes some element of charitable intent, in my experience as an estate planning attorney and in running several major nonprofit fund development programs, such intent results from, rather than precedes, the gift-planning dialog. Planned giving can be as much art as science; in the hands of a skillful gift planner, a donor can often eliminate most if not all shrinkage to his or her estate due to estate taxes, increase income, avoid capital gains taxes on the sale of appreciated assets, reduce income taxes, diversify assets, and eliminate the burdens of asset management. Planned giving, then, is the view of the individual donor's particular financial needs and wants, rather than the institution's. The term "strategic planned giving" describes the institution's perspective. In a nutshell, it applies to any program conducted by a nonprofit institution which seeks to substantially enhance its fund raising effectiveness by competing for the enormous wealth that is released by a senior generation to a junior generation (i.e. the parents of baby boomers to the baby boomers). It particularly seeks to project the problem-solving power inherent in the charitable planned giving provisions of the tax code (and which are the basic tools of the discipline we call planned giving) to today's senior generation, i.e., the parents of baby boomers. Thus, strategic planned giving is the "strategic view," that is, the view of an institution which seeks to compete, say, for a share of the estimated $10.4 trillion in wealth that is projected to be released by parents of baby boomers in the next 45 years or so. Another way of viewing this is to consider the generational wealth release as a giant wave of wealth. It addresses the question: How can a nonprofit institution compete for it more effectively? I was pleased to learn that the Canadian Association of Gift Planners is dedicating its April national convention to the concept. It's called, "Catch the Wave," meaning, catch the wave of wealth release. The upcoming CASE convention in San Francisco will also feature this topic at a plenary session. Acceptance of the term has been remarkable, given that it was introduced only in March, 1995. The fact that the term has only been in our lexicon for less than a year suggests why we haven't seen more literature on the subject, to date. The term was first introduced publicly in the March, 1995 issue of PLANNED GIVING TODAY, and was amplified in the August, 1995 issue. You may PLANNED GIVING TODAY via Internet at [email protected]. Stephen C. Nill, J.D. (Steven C. Nill is the founder of Charity Channel where many discussion groups connected to nonprofits and their work are hosted. See http://www.charitychannel.com. -- Ed.) Obviously from the early days of the FAQ. Reposted with small changes 1/6/05 -- PB