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August Newsletter 2012

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Planned Giving Mentor

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

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

Quote for today: People always live forever when there is an annuity to be paid them. Jane Austen, Sense and Sensibility, 1811. (Quoted in a Forbes article on charitable gift annuities)

As of publication date 9-10-2012 there are only 112 days for donors to make a qualified charitaable contribution deduction


Past issues of Newsletter are available in the Newsletter Archives _____________________________________________________________

Finding Direction in the Senior Market..... is the title of a best practice guide published by the Society of Certified Senior Advisors. I recommend the guide for everyone in the planned giving field. Originally written for the commercial sector, the non-profit sector should adapt much of its wisdom and recommendations.

It begins with an overview of the demographic of the mature marketplace defined as age 55+, the growing population who are living longer, better educated and committed to being financially secure.

Throughout the report there are several source references which allow you to dig deeper into the subject matter.

Some key findings and quotes:

  • If you create a place of business, i.e. the development office, “It’s critical the receptionist is warm, friendly and genuine, not fake.”
  • How does your staff communicate? Do they have senior sensitivity in their job training, focusing on issues such as communicating effectively with people who are visually and hearing impaired? Do they identify and resolve typical problem situations, in addition to addressing prospect's emotional needs?
  • The older demographic wants to build trust before the proposal or sale and receive special treatment afterwards.
  • When it come to developing marketing materials experts agree the first step is to narrow down which part of the demographic you want to reach. In the older population there are two or even three generations with different needs, concerns and generational touch points. Pre-retirees, active retirees and seniors have generational issues specific to their needs.
  • In crafting your marketing message to reach target markets, you must find themes, ideas and values that resonate with seniors at many levels.
  • Older prospects are not time-sensitive. Marketing messages telling older people they should do something now to avoid unwanted consequences in the future generally get poor responses. You market to values not age.
  • Make copy easy to read, keep it simple and use serif typefaces, don’t scrimp on size, resist the urge to be trendy, don’t be “loud” by using all caps, keep columns short, use color and graphics and sick to the facts.
  • Far too few Web sites, even those specifically designed for older adults, take into account aging eyes, hands and minds in their design and usability. Develop age friendly sites. Surprising to me was a note to avoid drop-down menus, because they require mouse precision that some older users may not have. Ease of navigation and readability are crucial, as well as new and engaging content is what will keep older adults coming back to your Web site regularly.

If you would like to investigate being trained as a Certified Senior Advisor simply Email me and I will give you the appropriate referral.


Baby Boom and Older Women..... give 89 percent more than their male counterparts, Women's Philanthropy Institute research shows.

Women of the Baby Boom and older generations give more to charity than their male counterparts and are more likely to give, when education, income and other factors affecting giving are equal, a new study from the Women’s Philanthropy Institute at the Center on Philanthropy at Indiana University finds.

Comment: Planned gift strategies my prove to be more important to women then men as women seek stability in their retirement years with the guaranteed lifetime payments from charitable gift annuities.


The Real Estate Planning Crisis.....Unless Congress acts by December 31 the estate exempt amount will drop from $5.12 million to $1 million. The number of estates subject to estate taxes will jump 16 fold to 52,000 per year. Nearly 2.5 million Americans die each year and many of them have not signed the basic documents to protect loved ones. Remember a spouse inheriting assets is not subject to estate taxes so the 52,000 represents those estates with no surviving spouse.


Rapid Growth of Donor Advised Funds.....The first donor advised fund (DAF) appeared in the 1930s. Today, commercial funds operated by Fidelity, Schwab, TRowe Price, and Vanguard and others hold the largest fund assets when compared to the typical community foundation. Community foundations now account for only 43% of DAF assets while religious organizations hold 15%.


Caring for Pets from beyond the Grave....According to recent studies, 27% of American pet owners who have wills include their pets in their wills. A 2009 survey revealed that on-third of dog, cat, and bird owners and one-half of horse owners specify in their wills a caretaker or guardian for their pet.

Whatever your personal perspective, chances are a significant percentage of your affluent and high-net worth donors have pets for which they wish to provide care after they've departed this world.

Under the law of willis of every state, pets are prohibited from inheriting and managing property.

For more planning ideas to share with your prospect download the Cannon Insights April 2012 article.


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


News and Notes....FEWER - 70% of retirees surveyed in 2007 (i.e., 5 years ago) were “very” or “somewhat” confident that they would have a “comfortable” retirement. Only 52% of retirees feel that way in 2012 (source: Employee Benefit Research Institute Retirement Survey).

LONGER LIFE - The life expectancy at birth of an average American was 62.9 years in 1940, 5 years after Social Security was created in 1935. Life expectancy is 78.7 years today (source: Center for Disease Control).

THEIR BIGGEST CONCERN - 62 % of American adults believe the greatest risk to the success of their retirement years is living too long (source: MetLife Mature Market Institute).

PAY IT OFF – 25% of American families headed by a retired person do not pay off their outstanding credit card balance each month. 46% of families headed by an individual that works as an employee of a firm (i.e., not a business-owner) do not pay off their outstanding credit card balance each month (source: Federal Reserve).

AT TIME OF DEATH - Unless modified by Congress in the next 4 ½ months, the federal estate tax exemption will be reduced as of 1/01/13, i.e., a death in 2012 will permit the transfer of a larger dollar amount on an estate tax-free basis (with proper legal planning) than a 2013 death. Federal estate tax law allows a 2012 decedent to pass onto his/her heirs $5.12 million estate tax-free. The amount that can be passed estate-tax free onto the heirs of a decedent reduces to $1 million for 2013 deaths (source: Treasury Department).

WE’RE NOT TOTALLY HONEST - The US government projects that an average American pays only 85.5% of his/her total federal income tax bill (mostly driven by unreported income), adding up to an estimated $385 billion annual “tax gap,” i.e., the difference between what all US taxpayers should have paid in federal income taxes vs. what they actually paid (source: IRS).

ALMOST ALL OF IT - The top 20% of US households paid 94.1% of all federal income tax paid by individual taxpayers in 2009, up from 64.7% paid by this group in 1979 (source: Congressional Budget Office).

ARE YOU READY? - 2 out of every 5 American males that live to age 65 will survive at least another 20 years to age 85 (source: Social Security).


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.

Will return in a future issue.


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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