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August 2013 Newsletter

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Planned Giving Mentor

Professional Partnerships: Hospice Philanthropy Group L.L.C.

Quotes for today: What we have done for ourselves alone dies with us; what we have done for others and the world remains and is immortal.”- Albert Pike

Quickie quiz: How many of the top 10 retirement states can you name? (answer below)

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Leaders who truly embrace planned giving weave it into the fabric of their organization's everyday development activities. Constant attention inspires results.


March Presentation.....Join me on Friday, March 21st in Harrisburgh, PA as I present "Real Estate and Other Hard to Value Gifts" at the Susquehanna Valley Planned Giving Council meeting. For further information and reservations contact SVPPC.


Flexible Deferred Gift Annuity Opportunities....for Baby Boomers and May-December Marriages...... I am seeing an increasing interest in the flexible deferred charitable gift annuity (FDCGA) or what I like to call a Retirement Gift Annuity (RGA). This interest is from those professionals wishing to show their support of charity but reluctant to give up the total economic value of their gift assets. The other major market is the expanding market of second or blended marriages where one spouse wishes to support charity while providing income to the surviving spouse.

First some basics of flexible deferred annuity agreements. This type of deferred annuity allows the donor/annuitant to pick when they would like to start receiving payments. The payment schedule is established when the annuity is established so the annuitant knows all the facts and figures up front. To activate the payments the annuitant contact the charity within 90 days of the start date of payments that year.

The donor receives a charitable deduction based on the time between the date of the gift and the target start date. The longer the time the larger the deduction. I have had donors receive a charitable deduction as high as 60% of the gift amount. Today, a deduction of 30-40% of the gift amount is possible.

If the donor selects to start the payments before the target date the payment rate is decreased. Likewise, if the donor defers taking payments beyond the target date the payment rate is increased.

As with any gift annuity the donor may elect to establish multiple agreements and build up the amount of future payments all of which start at the same payment date or they could have multiple target dates.

For seniors with blended or May-December marriages one spouse, normally the older spouse, could establish a two-life FDCGA to set the future payment schedule. The donor spouse using their own assets receives the charitable deduction. No payments are received until after the death of the donor spouse.

The donor spouse informs the younger spouse that should the donor die first then the surviving spouse is to turn on the annuity to increase their retirement income. The donor spouse know ultimately the residuum of the annuity will be used to support their favorite charity. Should the non-donor spouse predecease the donor spouse the donor spouse turns on the agreement or donates the agreement to the charity as an outright gift and receives another deduction.

Example: Dr. Adams, age 63, is still practicing but wishes to join the medical centers recently established Legacy Society. He does not need to any current increase in his income but is concerned about having sufficient income in his retirement years. Dr. Adams an active investor has recently sold several stocks at a profit and could use a charitable deduction to offset the capital gains on the recent sales.

Dr. Adams establishes a two-life joint and survivorship flexible deferred gift annuity. His spouse also age 63 is the survivor beneficiary should Dr. Adams die before payments begin. Dr. Adams reserves the right to begin the payments as early as his age 68 or defer receiving the payments until his age 80. The target date rate of payments selected is age 73 with a payment rate of 6.60%. Should Dr. Adams wish to start payment at age 68 for any reason he would receive payments of 4.58% or if payments would be deferred to age 80 the payment rate increases to 9.70%

For his $25,000 gift he receives a charitable deduction of $9,528 or 38% of the gift amount.

Summary: The flexible deferred gift annuity is an excellent planning strategy for many donors who wish to save for retirement, preserve the economic value of their gift assets while expressing their support for their favorite charity.


Technical Tips: IRS Standard Milage Rates for 2014…..

1. Business Mileage $0.56 cents per mile; 2. Charitable Mileage $0.14 cents per mile; 3. Medical Milage $0.23.5 cents per mile.

Individual who use a car to assist a charity may deduc milage if they have a written recorrd and there is no significant element of personal pleasure.


Fidelity Charitable.....becomes the second largest charity in America.....The Chronicle of Philanthropy's ranking of the top 400 charities in American had the donor advised fund run by Fidelity Investments ranked #2 at $3.2 billion.

This points to the increasing popularity of donor advised fund for individuals to support various charities and sometime make a gift today as they plan on paying their philanthorpy forward. The funds run by Vanguard Charitable (#13), Schwab Charitable (#18), National Philanthropic Turst (#67), Renaissance Charitable Foundation (#10) also made the list.


Most trust donors want to retain control!.....A recent Fidelity Investments survey found that a majority of American families have a hard time talking about wills, elder care and retirement planning. In fact, a majority surveyed said they feel much more comfortable discussing estate planning issues with a third party – like an estate planning attorney – than other family members.

Some other interesting findings from the report:
?97% had conflicting opinions between the generations on the topic of whether children will care for parents if they fall ill;
?A majority of children underestimated their parents’ wealth by about $100,000;
?30% of parents do not want their children to rely on an inheritance;
?40% of children said it was none of their business to ask about the contents of a will;
?97% of parents said they do not need help in retirement, but 24% of their children said they do.

Discussing these issues is often taboo in families, but there are real financial and emotional consequences when these conversations don’t take place.

Do your family a favor and take some time out during the holidays to discuss these important matters with the people who matter most to you.

Position Openings: Vidant Health System, Chief Development Officer and Executive Vice President, Greenville, North Carolina. Job posting at Contact Colette M. Murray, JD, CFRE (760) 863-4512 or


Quickie Quiz answer.....Top 10 Retirement States for baby boomers.....(source Del Webb Baby Boomer Survey)

New Hampshire
North Carolina
South Dakota


Laminated Gift Annuity Rate Charts.....The American Council on Gift Annuities announced new
gift annuity rates effective in 2012 which are also effective for 2014. The ACGA will meet again in April, 2014.

If you would like a laminated rate chart for the most recent rates simply request one using the following E-mail request


News and Notes....

$1,000,000 IS NOT WEATTHY - Seventy percent of the 4,000 people surveyed with investible assets of $1 million or more do NOT consider themselves “wealthy” a report by UBS indicates. The UBS Investor Watch The report also found that four out of five survey respondents are either supporting adult children or elderly parents to some degree.

HOME PRICES - $199,200 is the average home price in America. This represents a 11.7% increase from last year. Home sales are up 10.7% compared to last year with 5.29 million homes sold in October 2013. Source: KellerWilliams Realty

PENALTY - Everyone not covered by Medicare, Medicaid or an individually purchased private plan or a plan available through one’s employer must enroll in a health insurance plan though an ObamaCare state/federal exchange or pay a 2014 penalty of “the greater of” $95 or 1% of income. The penalty increases in subsequent years. The 2016 fine is “the greater of” $695 or 2.5% of income (source: Affordable Care Act).

WHAT KEEPS YOU UP AT NIGHT? - More than 3 out of every 5 Americans surveyed (61%) between the ages of 44-75 fear running out of money during their retirement years more than they fear death (source: Allianz).

NOT FOR ME - 52% of 1,000 “middle class” Americans (defined as having household income less than $100,000) surveyed in August 2013 have no money invested in the stock market, citing the volatility of equities as the main reason they avoid this asset class (source: Wells Fargo).

COULD YOU LIVE ON THAT? – 47.8% of the individual income tax returns filed in the USA for tax year 2011 reported less than $30,000 of adjusted gross income (source: Internal Revenue Service).

CHARITIES INCREASE- Only 1,761 charities were created in 2012 increasing the total to nearly 1.1 million.(source: IRS)


Kudos Corner - Celebrating gifts of all types and sizes

In this section I periodically highlight some recent gift expectancies and gift program elements I think will be helpful and informative, not all gifts are included.

York College of Pennsylvania, Mark Rank, Senior Director of Principal and Planned Gifts, completed a bargain sale agreement for an appraised value $91,000 two-unit apartment/residence building close to campus, established a CGA for $25,000, for donors age 79 & 87, establlished a flexible deferred gift annuity for $25,000 for a donor age 58, and received $46,800 security funded immediate CGA for a donor age 68. Secured an $800,000 bequest to endowment from a loyal donor.

Santa Fe Opera, Brian Dailey, Director of Planned Giving, has secured a $10,000 one-life charitable gift annuity from a donor age 81, and from current members of their Aria Planned Giving Society a $100,000 appraised value one bedroom condo plus furniture in Santa Fe, NM as an outright gift from a couple age 85/86.

Chapters Health System, Sharon Jones, FAHP, VP for Development and John Wilbur, Senior Major Gifts Officer have secured the following gifts: single life gift annuities each for $10,000 for donors age 80, 85, and 91, a $25,000 CGA for donor age 78, a $40,000 stock and cash funded CGA for single life agreement donor age 86, and the 8th and 9th CGA from a couple for a two life agreement for donors 88/85 in the amount of $10,000 and $20,000, plus several documented bequest intentions.

Roper St. Francis Foundation, Susan Keenan, Executive Director and Dayna Jordan, Director of Major Gifts have secured numerous planned gifts as they have developed commitments to the Foundation's Legacy Circle. Gifts included several bequest commitments in estates and retirement plans plus a $250,000 7-pay life insurance policy from two physicians aged 39/41, a $30,000 2-life Flexible Deferred CGA from donors aged 65/68, a $24,945 stock funded Flexible Deferred CGA from donors both age 63, and a $20,000 1-life Flexible Deferred CGA for a donor age 66.

Southeastern Health Foundation, Sissy Grantham, Executive Director kicked off their expansion of the planned gift efforts with a $100,000 7-pay life insurance policy on a donor age58. Establsihed the Foundation's planned giving web site with calculator using the services of

Good Counsel Homes, Chris Bell, Executive Director, secured a $50,000 1-life gift annuity from a donor age 74 (Life Expectancy 13.2 years) which was reinsured at a cost of $31,851 eliminating the investment and longevity risks, and giving the charity immediate use of $18,149 (36% of the original gift today) for its programs and projects.


James E. Connell and Associates is a national consulting service devoted to increasing resources for charities using the power of charitable estate and gift planning techniques.

Pinehurst office: PO Box 3335, Pinehurst, NC 28374
Phone: 910-295-6800

Northeast office: 20982 Bayside Avenue, Rock Hall, MD 21661

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