Current Events







Helpful Links

IRS Downloads

April Newsletter 2012

Newsletter Archives

Planned Giving Mentor

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

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

Quote for today: “Don’t be afraid to give up the good to go for the great.”– John D. Rockefeller


Past issues of Newsletter are available in the Newsletter Archives


Marty Matula CFP, CFRE

Salute to Marty- Marty Matula CFP, CFRE, Executive Vice President of the Morton Plant Mease Foundation made a career change to retirement on June 29th after a 26 year distinguished career. Marty created and implemented Morton Plant Mease Foundation's first ever structured planned giving program. Through her leadership the Foundation's endowment grew to over $100 million while the ongoing cultivation of donors resulted in an expectancy list (revocable and irrevocable) of $80+ million.

I had the pleasure to recruit Marty to be a planned giving faculty member at the AHP Madison Institute for Healthcare Philanthropy. Her present ions were outstanding and she made a dynamic impact on her students.

The Foundation's Financial Counseling Service (FCS) stands today as an example of how engagement of professional advisors can multiply the planned gift program.

I recommend you check out the Foundation's 2011FCS Resource Directory and implement strategies as appropriate for your charity.


Fiscal Cliff .....There is much chatter about the fiscal cliff Americans will face if the Bush era tax cuts expire on January 1, 2013. Wealthy donors should consider whether to accelerate donations planned for future years into 2012, while the tax treatment is still favorable or wait until 2013 when higher rates and maybe a larger deduction will be effective.

My article for Leave a Legacy, York County, PA provides a good summary of what is ahead for individuals IF Congress does not act to continue, modify or expand the Bush era tax policies.


Gift Annuity Payment Chart for Non-Taxable to Taxable Conversions

Russell N. Howes, VP for Legal Affairs, University of Wisconsin Foundation has created an Excel spreadsheet which easily converts the Non-Taxable portion of a gift annuity payment to its taxable equivalent for various tax rates.

This spreadsheet will be valuable to all those who wish to show the impact of the non-taxable return of principal and how much a person would have to earn from investments to equal the same after tax spendable income.


Essential Skills for every Planned Gift Professional.....

Prospecting, Questioning, Listening, Presenting, Rapport building, Objection handling

The landscape of charitable estate and gift planning has changed greatly over the last 20 years. Gone are the days when technical knowledge of planned gift tools and techniques were king. In today's competitive world to the planned gift director must have advanced sales skills to succeed. Below are six key skill sets every director should consider essential in their advancement efforts.

1. Prospecting

Without a consistently full pipeline, you will struggle to meet your planned giving targets and goals. You will experience peaks and valleys and a great deal of frustration. Unfortunately, very few professionals actually know how to prospect effectively. The vast majority relies on just a few prospecting methods, such as prospect review sessions, previous donor analysis, or networking with professionals.

There are however many other ways to expand planned gift prospects, including asking for referrals, approaching non-donors about your legacy society, setting up seminars on current topics of interest, writing articles for your newsletter, looking for opportunities to show existing legacy society members the benefits of new approaches for their charitable estate planning, and arranging periodic in-home meetings on the mission and accomplishments of your charity. The key is to dedicate a significant amount of your weekly schedule to prospecting activities regardless of how long you have been in planned giving

2. Questioning

Although this sounds like a fundamental concept, the majority of professionals I have encountered over the last 35 years are incapable of asking questions. Many professionals ask low-value questions that do little to engage prospects in the planned giving conversation.

Examples include:

  • “Are you the decision maker to make this gift?”
  • “What’s your charitable budget?”
  • What do you know about our charity, do you know enough?”
  • “Are you interested in making a gift at this time?”
  • “What are your needs?”

By asking tired, outdated questions such as these, many professionals fail to differentiate themselves from the other charities or demonstrate their expertise.

A true professional knows how to ask high-value questions that encourages a prospect to share details and information about his or her thoughts and desires that can help you effectively position a solution. High-value questions can transition into tough, penetrating questions that make your prospects stop, sit up and think. Such questions cause them to say, “That’s a good question!”

Some examples are:

  • “What charitable goals are you striving to achieve during your lifetime?”
  • “What challenges are you experiencing trying to reach those targets?”
  • “What are those problems costing you?”
  • “What impact is that having on your views of charitable giving?
  • “How important is our charity compared to the others you support or thinking of supporting?”
  • “What could potentially prevent your gift from moving forward?”
  • “What internal challenges do you need to deal with before you see this gift moving ahead?”

When you develop the ability to ask high-value questions, you will stand out from your competition while also learning more about your prospect’s specific situation.

See Panas and Sobel “Power Questions, Build Relationship, Win New Business and Influence Others.”

3. Listening

You can ask all the questions in the world, but if you don’t listen carefully to what the other person tells you, you are wasting your time and losing valuable opportunities. Active listening means actually hearing what people tell you. It means asking clarifying questions when the other person says something vague or something that requires elaboration.

True listening means that you stop multi-tasking during a telephone conversation. Don’t type notes into your computer, scan emails or do anything else. Focus your full attention on the other person. Listen for underlying meanings, clues and cues and respond accordingly. One of the most effective ways to show prospects that you have listened (and heard) what they have told you is to quickly recap the important key points.

Selling planned giving opportunities and strategies in today’s hectic and complex world requires tremendous effort and energy. It is or can be highly competitive and stressful. You can improve your results and achieve a much higher return on your investment by developing and applying these essential skills.

There are dozens of selling skills that a good professional should have. Here are three more that are vitally important.

4. Presentation skills

“Um, I’d like to, uh, discuss how our service can, um, help you, uh, reduce inheritance taxes.” Not a very compelling way to begin a planned gift strategy presentation, is it? Yet, this type of opening is not uncommon. There are two aspects of presentations you need to consider: content and verbal presentation.

  • 4a. Content: Too many professionals include far too much information in their presentations and open them by talking about their company instead of the buyers’ situations. Discuss only the aspects of your tools and techniques that are critical for your prospect to know.
  • 4b. Verbal presentation: Consider your pace, timing and delivery. The more important a potential relationship is for you, the more critical it is that you rehearse. Watch your body language, gestures and facial expressions.

The best way to improve your presentation skills is to videotape a presentation and watch it afterward. An alternative is to have a colleague present at the presentation to provide a critique. It can be painful to watch or hear about yourself in action, but it is the most effective way to see how you actually deliver a presentation.

5. Rapport-building

Developing a connection is still important in today’s professional environment even though we rely heavily on technology. People still buy from and connect to people. Creating rapport with someone means making a connection. This does not mean that you talk about a photo on the desk or an award on the wall. That approach is severely outdated. Instead, you need to be able to speak your prospects’ language. You need to demonstrate that you understand the problems and challenges they face.

For example, if a probable donor has experienced a significant decline in their personal wealth due to changes in the economy or marketplace, you need to be able to talk about that problem—intelligently. Perhaps there is not a solution today but keeping in touch with the prospect may lead to a workable solution tomorrow.
When you execute this properly, you not only develop rapport with your prospect, you also position yourself as an expert. You can also establish rapport by outlining the goal of your presentation, confirming the time that’s been allotted and then finishing early. No one will ever complain about a meeting finishing early.

6. Objection handling

Objections are a natural part of the planned gifting process. How you respond to them can make or break a strategy. First, it is essential you outline the objections you hear most frequently. Then determine the most appropriate rebuttal.

Before you respond follow these three short steps: 1. Empathize (verbally state that you understand, respect or appreciate the prospect’s concern. “Mr. Smith, I understand that you have gifting budget issues to deal with.”); 2. Clarify (restate an objection back to the prospect in your own words to demonstrate that you clearly understand it. “So you see the value in this strategy, it’s just that the amount exceeds the gift budget you had allotted, correct?”); and 3. Seek permission (ask the prospect for permission to offer a solution. “Mr. Smith, would it be OK if I took a minute to discuss a few other options?”). Follow this process and you will find that most people will be more receptive to hearing your solution.

Explaining the advantages of a planned gift strategy in today’s hectic and complex personal and financial world requires tremendous effort and energy. It is highly competitive and stressful. You can improve your results and achieve a much higher return on your investment, of time and energy, by developing and applying these essential sales skills.

After every probable donor visit write down any objections you have heard, keep a running list and expand your answers as you expand your visits.


Laminated Gift Annuity Rate Chart for 2012.....The American Council on Gift Annuities has announced new gift annuity rates for 2012. This is the result of the decreasing return on the fixed income bond component of the ACGA investment return assumption. Handouts from both the Sharpe Group and Crescendo further explain the rational for change.

If you would like a laminated rate chart for the 2012 rates simply request one using the following E-mail request.


Asset Repositioning in a Time of Low Interest Rates.....In the August Newsletter we will discuss how donors used increased income to $300,000 of their assets to insure a $1,000,000+ gift to charity.


News and Notes....

FINANCIAL GENDER GAP - Financial Finesse reports that women lag behind men in financial planning, basic money management and investment knowledge and confidence. Only 43% of women have an emergency fund in compared to 63% of men. Fifty-two percent of female respondents said that they were comfortable with the amount of non-mortgage debt they had versus 71% of men. Just 37% of women said they had taken a risk tolerance assessment and understand their conservative, moderate, or aggressive investment strategy, compared to 57% of men. (Comment: this does not explain why women fund charitable gift annuities to a greater extent than men.)

RETIREES ARE MILLIONAIRES? - The maximum retirement benefit paid by Social Security to an individual retiring in 2012 at the full retirement age of 66 is $2,513 per month. $3 million invested in a pre-tax account earning 1% annually on a tax-deferred basis would generate $30,000 per year or $2,500 per month of taxable income, i.e., income taxes are due upon withdrawal from the pre-tax account (source: Social Security).

WHAT THEY’RE WORTH - The median net worth of the richest 10% of Americans increased +1.9% from 2007 to 2010, rising from $1.172 million to $1.194 million (source: Federal Reserve).

FUNDING A RETIREMENT - The S&P 500 has averaged +7.8% (total return) per year over the 20 years ending 12/31/11. A lump-sum of $995,803 (in a pre-tax account) will sustain a 20-year payout of $100,000 per year (gross before taxes and paid at the end of the year) assuming the funds continue to earn +7.8% annually. This mathematical calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance. Actual results will fluctuate with market conditions and will vary (source: BTN Research).

AUSTERITY OR GROWTH? - The “Bush Tax Cuts ” represent $3.8 trillion of lost tax revenue (if extended on 12/31/12) or additional tax revenue (if allowed to expire on 12/31/12) over the next decade (source: CBO).

STOCK VALUES - The S&P 500 stock index gained +10.5% on a total return basis (in aggregate, not per year) over the 5-years ending 3/31/12 (source: BTN Research).

BEST AND WORST - The average home price in North Dakota increased +17.1% (in aggregate, not per year) over the 5-years ending 3/31/12 compared to an average drop of 57.9% for homes in Nevada (source: OFHEO).

TAXES - Americans paid an average tax rate (i.e., federal income taxes paid as a percentage of adjusted gross income) of 15.3% in 1980, but paid only 11.1% in 2009, the latest year that data is available (source: Internal Revenue Service).

DOWN FOR ALL - The top 1% of taxpayers paid an average tax rate (i.e., federal income taxes paid as a percentage of adjusted gross income) of 34.5% in 1980, but only paid 24.0% in 2009 (the latest year that data is available). The bottom 50% of taxpayers paid an average tax rate of 6.1% in 1980, but only paid 1.8% in 2009 (source: Internal Revenue Service). ______________________________________________________________________________

Kudos Corner

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.

Kudos to the team at Chapters Health System Temple Terrace, FL Sharon Jones FAHP, VP Development, John Wilbur, and Amanda Maynor, who continues to expand the gift annuity program. Amanda secured a $100,000 CGA pledge with a first year payment of $25,000 for a 1 life age 72 donor; John secured a $10,000 1 life agreement for age 87 donor; and Sharon secured two agreement, a $10,000 1 life age 81 and a $25,000 1 life age 81 donors.

Kudos to Good Counsel Homes, Hoboken, NJ, Silvana Cowden, Assistant to the President, a follow up letter to a current annuitant produce an additional $10,000 1 life agreement for a donor age77 who had an existing joint and survivor 2 life agreement.

Kudos to Jason Chandler, Gwinnett Medical Center Foundation Lawrenceville, GA who secured two CGAs. A $75,000 2 life agreement for donors age 90/93; a additional $100,000 2 life agreement for donors age 68/73. The latter donors have CGAs now totaling $1,200,000.

Kudos to Mark Rank, York College of Pennsylvania York, PA who secures two CGAs. An additional $5,000 2 life agreement for a couple age 81/86; and a $20,000 2 life agreement for a couple age 71/71.

Kudos to Holly Woolsey, Jess Parrish Medical Foundation, Titusville, FL who secured a $10,000 1 life CGA agreement for a 89 year old donor who had several CGA agreements with other charities. (Note: do not overlook donors to other charities who may already understand the benefits of CGA agreements.)


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

To unsubscribe from this newsletter click this link and in the title line put unsubscribe