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November Newsletter 2010

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Planned Giving Mentor

Of Counsel: Winton C. Smith, Jr., JD

Quotes for today: Real generosity toward the future lies in giving all to the present. Albert Camus_______________________________________________________

For additional philanthropy quotes see the helpful links page of the website and scroll down to the Miscellaneous Helpful Links___________________________________________________________________

Winton C. Smith Jr., JD, Memphis, Tennessee becomes Of Counsel...

James E. Connell & Associates is pleased to announce Winton C. Smith, Jr., JD will serve as legal counsel to the firm for charitable estate and gift planning strategies. As a colleague Winton and I have worked together in the past and he has covered my clients during times I have been away.

Our combined 60+ years of experience developing planned gift programs and working with individual donors will add value to each of our client relationships. Winton will be available to assist donors with their estate and gift plans and to also work with their professional advisors.

Periodically Winton will write articles for this newsletter with tips for planned giving success.

Winton is giving a February 3rd Online Webinar "Bequests to Build Endowments: Big Opportunities in 2011" sponsored by Development Dialogues. For a brochure and to register click link. Development Dialogues is an Approved CFRE Provider.


Congress finally acts....approves the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010...of interest to charities, is the new law on the income side 1) extends the charitable IRA Rollover provision for 2010 and 2011; 2) extends the current federal income tax brackets through 2012; 3) extends the current Federal capital gains tax and the dividend tax rates through 2012; 4) repeals the itemized deduction limitation through 2012; and 5) patches the Alternative Minimum Tax at a higher income level.

On the estate side the new law through 2012; 1) sets the federal estate tax exemption at $5 million per person with a tax rate of 35%, the lowest since 1931; 2) set a unified estate, gift and generation skipping tax exemption at $5 million through 2012; and 3) established portability of the estate exemption for spouses.

Since Congress acted late in the year millions of taxpayers will have to wait to get their refunds. The delay applies to all 50 million who itemize deductions as the IRS has to revise Schedule A and it will not be ready to go until mid-February.

Estate tax changes may crimp charitable giving. Economists who have studied the estate tax issue have come to widely varying conclusions. A study by the U.S. Treasury Department concluded that a repeal of the estate tax world cause a 12% drop in charitable bequests. Brookings Tax Policy Center projected a 22% to 37% decline. The conclusion, there is less incentive to reduce the taxable portion of their estate. The new law means you can leave more to your family, less to government and more to the charities you care about.

For Winton Smith's guide to Charitable IRA Rollover gifts click here.


73% of Americans 50+ are online...A recent AARP study reports approximately 25% of those 50+ who are online use social media with the favored sites Facebook (82%); MySpace (16%); LinkedIn (15%); and Twitter (9%).

Success story from "Agents of Wealth" program.....The following is by Joanne Troutman, Director of Development, Evangelical Community Hospital, Lewisburg, PA. It shows the power of persistence and consistency in developing an effective "Agents of Wealth" program. In her own words she shows the power of relationships.

I’m writing to let you know of two success stories that have cropped up in the last few weeks regarding members of our Planned Giving Council at the Hospital. We don’t have a huge staff here, as you know. While we’ve long had a culture of strong planned giving, we as staff members are certainly not gift planning experts, so for the last few years, we’ve relied on a small group of experts and advocates from the community – accountants, attorneys, financial planners – to help guide our program.

Just last week, two remarkable things happened:

1. An accountant, a long-time member of our PG Council, happens to be the accountant for one of our Legacy Circle members and her POA (Power of Attorney). The donor’s POA made a $10,000 outright gift a year ago at the recommendation of the accountant – the donor has always loved the Hospital and she needed a tax deduction. The POA was a bit skeptical, but chose to make the gift.

The POA recently had a joint replaced here at the Hospital and, in doing so, realized what a great place this really is. Needless to say, she’s become a “believer” and simultaneously realized that it would behoove the donor to get some additional tax deductions. The POA called Tami (VP of Development program) two weeks ago and arranged for a meeting to discuss a major gift. The result is what will amount to a $100,000 outright gift to the campaign! The POA is also considering a gift of her own, and said she would not be making either commitment were it not for the accountant’s recommendation.

2. A lawyer, a recent addition to our PG Council, contacted me last week. He and I have mutual contacts, folks who are clients of his and donors to the Hospital and we work closely together. He really is a terrific estate planning attorney who also happens to be very charitably-minded, and we had been discussing a few donor situations.

On Friday, I received an email from him titled, “Making Your Day.” In it, he shared that not only had one of his clients agreed to make a multi-year, $25,000 outright gift. But an anonymous client is planning a $1,000,000 estate gift to the Hospital. When our CEO contacted him to thank him, he said that since he’s been added to the Council, he’s been contemplating what kind of difference he can make.

I just thought I’d share these items as two examples of when relationships that our organizations build with experts really work. Not every financial expert or client has charitable intentions, but when they do and the organization is of mutual interest, great things can happen.


Give it away.....A bedrock principal of estate plans is that the more you give away while you are alive, the less that might be vulnerable to taxes. You can leave more to you heirs and charity. Its called "Strategic Gifting" and you and your spouse can each give up to $13,000 a year to each of as many recipients as you wish. Acting jointly you and your spouse can give up to $26,000. Any year you top the $13,000 limit you must file IRS gift tax Form 709, but you will not owe a tax until you exceed the lifetime exemption on total gifts and estate asset transfers.

Individuals can stretch the annual gift caps by paying for someone's medical expenses and/or tuition if the payment goes directly to the service provider.

By giving gifts now you remove assets from your estate and also remove any appreciation on the asset, a major benefit if you gift stock that has appreciation potential.

If you are working with a prospect who has a taxable estate under the current regulations suggest to them both individual and charitable gifts are a good method of getting under the exempt amount.


News and Notes....The Susan G. Komen for the Cure foundation is the world's largest private funder of breast cancer research with $1.5 billion raised for research and prevention. (Investor's Business Daily, January 13, 2011, page A3). It has only one page devoted to planned gifts and as my pet peeve, no link to contact a PERSON, just a department.

Put IRA rollover letters on your web site just as Patricia Dopazo, Director of Planned Giving at Hartwick College did. It will be a resource for both professionals and donors who will use this gift strategy during the 2011.

Beginning January 1, 2011, 10,000 Baby Boomers a day will turn 65, a pattern that will continue for years. The situation is extremely serious because baby boomers have not saved very effectively for retirement. Many retirees banked on their homes as their retirement fund, but now 22 percent of homeowners owe more on their mortgage than their home is worth.


Why are New Year's Resolutions So Hard to Keep...Think you may have set a goal for the New Year that is a tad too ambitious? An impressive body of neurological research suggests that, on the contrary, your goals may not be challenging enough, according to Hard Goals: The Secret to Getting from Where You Are to Where You Want to Be. Mark Murphy says the more difficult your goal is, the better your performance will be. Tough goals force us to pay attention.

What is the goal for your bequest society membership? What is your goal for life income agreements? What is your goal for personal charitable strategy presentations? What is your goal for teaching staff members to refer planned gift prospects? Are they tough enough for your program?


Kudos Corner

This is a new section where I will be periodically highlighting some gift expectancies and gift program elements I think will be helpful and informative, not all gifts are included.

Kudos Corner will return next issue with full information.


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, 15 Pinewild Drive, Pinehurst, NC 28374
Phone: 910-295-6800

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

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