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I'm working on a presentation for early June to a mix of fundraisers and stewardship folks about Planned Giving.

It led me to reflect a bit on what holds many people back from even initiating a conversation about bequests with their donors.

I realized that when many of us think of talking to someone about whether their money might go to the cause we represent when they die, this (photo on right) is what we think we have to break through.

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Good news is that more often than not, once the question has been asked, "I'd like to speak to you about your thoughts around considering a charitable bequest to (name of organization), would you be open to that?"

This image is usually more like what we run into once the door is open.

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Richard Radcliffe
 often speaks about how asking for a planned gift is most like a marriage proposal. It's personal, it's relational, it's between people who know each other and it's life-giving for both parties involved.

The "legacy gift" conversation is not about death, hellfire and taxes...it's more like a marriage proposal: an entrance into a life-giving partnership.

Ask Better? Give Smarter?

Don't abandon hope! Look for opportunities to open the conversation about charitable bequests. Approaching people who already have a close relationship with your cause are likely going to be open to the conversation.

As a donor, look for charities that are respectful and personal in their communications with you. Feel free to open the conversation yourself if you haven't been approached. Never give if you feel pressured and always check in with your lawyer and family first. Good professional fundraisers will not create an uncomfortable situation if you decide after exploration that the idea is not for you or if your plans change in future for any reason.
 
 
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While this blog typically focuses on the personal or marketing side of fundraising and philanthropy, I found a very helpful article yesterday that addresses some of the technical planning and administrative aspects around charitable bequests.

Though it does cover more of the technical side, I found it fairly easy to follow and full of useful information for donors and for charities.


I'd also like to make a personal, unsolicited reccomendation of the Charities and Not-for-Profit Division within the Miller Thomson law firm. If you are not already a subscriber, you might want to get on their Charities Update emailing list, which is how this article found me.
 
I've worked with a number of the lawyers at this firm and what stands out about them is how much they give in terms of free educational information - newsletters, conference presentations, informal conversations - to me their investment in helping fundraisers is a sign of their commitment to the charitable sector in Canada.

Thanks  @CharityLawCan @EstatesLaw @SusanManwaring and the rest of the gang at @MTCharity !

Practical Considerations When Making a Charitable Gift by Will
Karen L. Weslowski, Vancouver

(Reprinted with permission from the June 2012 Miller Thomson Charities and Not-for-Profit Newsletter)

A legacy can be created by leaving all or a portion of a person’s estate to charity.  Such a gift can reflect a testator’s personal values and beliefs while making a difference in the lives of others.  However, in order to ensure that the charitable gift is realized, there are some things for a testator to consider before leaving an estate gift to charity.  Once that gift is made, charities may wish to know what steps they must take to protect that gift. 


The Requirement for a Proper Will


Without a proper Will, a person’s estate will pass on intestacy to their next of kin. However, before a person can make an estate gift to charity, their Will must make some provision for their dependants, if any. 

In British Columbia, dependants include a testator’s spouse, minor children and, in most instances, adult children, even if they are financially independent.  In most other Canadian provinces, the category of dependants is not as broad and includes spouses, minor children and adult children only if incapable.  If a testator’s Will does not make adequate provision for these people, there is legislation in most provinces which permits dependants to commence litigation challenging the Will. 


Litigation often results when family members are not informed about a testator’s intention to leave a charitable bequest.  Testators should tell their family about their wish to leave an estate gift to charity.  Although the charity has a duty to protect the gift, charities may be reluctant to engage in acrimonious and expensive litigation to do so. 


The Will needs to be very specific about which charity the testators wish to benefit.  For example, if the Will simply provides a bequest to the “diabetes society”, it may be challenged on the basis that the identity of the charity is unclear.  This is due to the fact that there are several charities associated with diabetes.  Even if the Will is not challenged, a court application may still be required to figure out which charity the testator intended to benefit.  This will cost the testator’s estate money that could otherwise go to the charity and the estate beneficiaries. 


The Charities’ Duty to Protect a Charitable Gift


Charities may become involved in estate litigation by virtue of being a beneficiary of an estate.  Common issues that involve a charity are challenges to the Will, applications for interpretation of the Will and passing of the executor’s accounts. 


Charities are not always sure what role, if any, they may have in estate litigation.  As a beneficiary of an estate, a charity is entitled to notice of any estate proceedings which may affect its entitlement or require its consent.  Charities are also entitled (or, in some instances, may be required) to fully participate in the litigation, including settlement of the proceedings.


Charities must ensure that their interests are protected under a Will and by the person administering the estate.  Charities must take reasonable steps to ensure that a testator’s gift is realized.  This includes monitoring the administration of the estate and making inquiries of the estate solicitor or executor as to the status of the estate.  If necessary, it may also include taking active steps in any litigation to protect their interest in the estate. 



The need to defend a donor’s charitable gift by becoming involved in litigation can affect the charity’s image.  In a fight with disinherited family members, the charity may be perceived as “greedy”. Charities generally want to maintain a positive public image. 

This consideration may affect how a charity conducts itself in litigation and cause it to be less assertive in defending a testator’s gift.  Although charities have an obligation to defend the donor’s charitable gift, it may not be practical to do so where the amount of the gift is small relative to the cost of litigation.  Charities may choose to decline a bequest where the public relations issues resulting from litigation would adversely affect the charity disproportionately to the value of the bequest. 



Conclusion


Testators should strive for open communication with their dependants as to their intention to leave a gift to charity.  This can assist in ensuring that their intended gift is realized and reduce the potential for litigation after the testator’s death. Charities must recognize their duty in protecting charitable gifts and take appropriate steps to that end.



Yep, this one needs a "just in case" disclaimer to let you know that this blog post should not be taken as legal advice. Christina Attard is NOT qualified as a lawyer or financial advisor and information on this website does not constitute advice - please consult with a qualified advisor before proceeding with any legal or financial course of action.
 
 
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Have you ever had a friend who worked as a professional fundraiser who approached you about a (major) gift for an organization that you don't normally support? 

Since this hasn't happened to me yet, I'm not sure how it feels - was it uncomfortable? completely welcome?







What I have seen before are charities who ask about a fundraiser's personal connections in the donor community. "Did you work with donor X in previous role and would you be able to approach them and others on behalf of new charity?" To me, that question is a huge red-flag for me as a professional.

To be honest, I'm not sure what others have experienced and whether my position is the correct one, but I want to share my own thoughts on this - with the strong caveat that what I'm talking about here is a very small number of charities and fundraisers/consultants and I'm mainly focused on significant donations.

ASK BETTER

It's not easy to find the right fundraiser or consultant. You are looking to hire someone who is not only professionally competent (in a profession that is not always well-understood by the general public) but who can represent a cause-based brand in a compelling way. 

I would suggest to organizations that they should be looking for a fundraiser who is extremely well-connected. BUT, the key here is in which circle.

Fundraisers with lots of personal friends are not as valuable for your organization as fundraisers with lots of professional connections in the non-profit sector. LinkedIn is a good place to glimpse at this network, but don't forget to dig deeper and look at relevance of contacts vs. sheer number. My development contacts on the site are more important in this case than my mortgage broker.

A strong professional network means that the person can grab legal information, a second opinion on a strategy or a form/template/document in minutes. This helps me to do my work better, faster and cheaper and to understand how I can keep the organization I represent operating within the standards set by the non-profit industry nationally.

Personal friends, and even powerful or wealthy ones, might give for a time to causes I ask them to support, but ultimately, they are giving to support me rather than the organization. How many times have we seen organizations that were 'on a roll' with their programs until that 'great fundraiser who knew everyone' moved on along with his/her rolodex?

Charities should be looking for individuals who will take a look at the donors, volunteers and advocates that they already have and the new friends they might want to make and be able to identify, sort, initiate, build and manage those friendships. When I see a list of existing donors that have not been engaged at a high level, what I offer the organization is the ability to prioritize and develop those relationships. My practice is to act as a matchmaker and build long-term connections in the community that don't rely on my personal relationships.


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GIVE SMARTER

Let's face it, we're more likely to be interested in learning about something because a friend approaches us about it and tells us why it's important to them. 

But, there's a boundary here that needs to be drawn.


When a board member or volunteer who you know makes an intro to you about a charity or campaign and then passes you into the hands of the fundraiser to make the case and ask for support, there is a chance to step away from your personal relationship with the board member. It allows the decision to become donor-centered and based on the fit with the cause. You can say "no" and not lose face. You can hold the fundraiser accountable and not your friend for the use of your gift.

Evaluating "friendraising" as a donor is another good indicator of whether you should be investing in a particular cause. Has the charity hired your friend to drum up business from his/her personal contacts as their main activity? If so, then consider carefully whether this is a sign for you that this organization's mission can stand on its own or whether it rests on your friend's reputation? What happens when you're friend moves on? Will you continue to receive donor reports and contacts? What are they doing to invest themselves in building direct relationships that will be lasting and sustainable? How does that reflect on how the rest of the organization is being built and managed?

What do you think? How do you draw the lines between friendships and fundraising/giving (especially when it comes to major gifts)?
 
 
I'm not much of a newspaper person. 

BUT I have to admit that I'm regretting not having a subscription to the Globe and Mail this weekend as they are providing some in-depth coverage on the state of charities and philanthropy. As with most news these days, I heard about this via Twitter

The Globe and Mail has created, in addition to a number of excellent articles, a great interactive information resource showing giving by the numbers. The coverage does an excellent job of addressing the need for charities to ask better in a tougher Canadian market and for the public to give smarter by evaluating fit and impact when they give.

I loved this Donation Action Plan chart:
Looking at the various graphs, there are a few key seismic shifts in the Canadian landscape:

1. Those who give are predominantly older individuals with a significant drop in donation dollars coming from those aged 35-44.

2. There is a huge pressure on corporations to use their donation dollars in a more strategic fashion and on the overall, there has been a large drop in corporate charitable contributions.

3. Canada still provides strong support for social services with roughly 43% of charity revenue coming from taxpayer's dollars. Donation dollars from individuals have decreased in recent years and the number of those giving has dropped dramatically.

4. The use of donation tax-shelter schemes (the majority of which are under heavy scrutiny by the CRA) has been wide-spread enough to actually skew the overall statistics.

Is the system in trouble?

Perhaps.


Ask Better

Charities need to be serious about marketing to a new breed of Canadian that is looking for accountability, transparency and impact. The new breed of philanthropists want to see themselves as investors and partners, not ATMs. It's also time to put serious effort into engaging younger generations and building relationships with new sets of donors - how else can the system be sustainable as the bulk of those participating in giving ages?


Give Smarter

No one wants to lose the good work done for our society by the thousands of agencies that make life better for Canadians every day. There is clearly interest in giving when it comes with very generous tax concessions (as the popularity of donation tax-shelter schemes has demonstrated). What can we be doing to increase and promote the idea of investing in Canada's charitable sector in a fair and legislated way? Are you, as a donor, seeking out advice about the various (legitimate) ways to give on a tax-reduced basis? Do you regularly evaluate the service and satisfaction that you receive from the charities that you are supporting?

I applaud the Globe and Mail for opening and exploring this topic so intelligently and in such great depth. The third sector remains a bit of a mystery in the public consciousness, but it plays such a vital role in Canadian society.

I'd also like to thank Paul @UinvitedU for his coverage of the feature via Twitter.

*Update*

Today, Malcolm Burrows at All About Estates weighed in on the "Strategic Giving" coverage in the Globe and Mail and I wanted to share his insights as part of this discussion.
 
 
Lately, a question that I receive from my colleagues in the charity sector has to do with technical gift planning knowledge.

Because I have completed the Advanced Canadian Gift Planning course and worked in two fairly large shops, some colleagues have wondered whether developing their knowledge of technical gift planning might help them to build momentum for the (typically small) program at their charity.

While a technical expertise does serve me well in working with financial and estate advisors to develop more creative philanthropic strategies, the truth is that in Canada, the "bread and butter" of gift planning programs still lies in simple bequest gifts. 

In my experience, the key to increasing overall program engagement for a charity had a lot more to do with marketing the opportunity to make a bequest gift than the ability to suggest more complex donation scenarios. 

For example, the most complicated life insurance gift that I'd ever seen had a face value of about 1 million dollars and took more than a year to arrange. In comparison, a new direct mail / telethon strategy to advertise bequests garnered over 7 million dollars in expected gifts in its first year with a repeat of that result in the second year and created a huge pool of interested supporters.

If you find yourself frequently speaking with donor's advisors and working on several complex strategies annually, then it might be time to look at deepening your technical knowledge. Otherwise, consider focusing your energy on simple marketing strategies, like direct mail, that help you to identify the supporters that can make a straightforward charitable bequest.


 

© 2011-2012 Christina Attard. All Rights Reserved