Welcome to the first lesson in module forum Planned Giving Administration.
In the last course you learned about donor centered giving.
In this lesson we will set the context for
other lessons in this module by introducing legacy management.
After this lesson, you'll be able to define legacy management,
discuss how to structure a planned giving strategy with legacy management in mind,
and present an overview of
the administration's planned gifts to fulfill obligations for legacy management.
Let's get started.
While working in planned giving,
you will touch on the issues of making sure
the charitable gifts of your donors outlive them.
As a development professional you want to make sure that
your charity advocates for the donor and the donor's legacy.
This extends beyond their living years.
As important as it is to structure the donor's estate gift,
it is equally important to make sure someone at
your charity is serving as a watchdog and advocate for the donor.
There are many examples of estate gifts that were structured in
the most appropriate way but there was still
a breakdown in execution by the executor, trustee, or family.
This kind of breakdown can cause irreversible damage to the donor's legacy.
Such damage can take many forms but mostly it
results in a reduction in funds available for the charity,
and ultimately a negative impact on their legacy.
I want to present the context of planned giving in what we call legacy management.
For our purposes in this course I will define legacy management as fulfilling,
advocating and promoting the legacy of the donor.
This includes the information you gathered from
the donor and capturing the story of the donor,
and helping future generations know
the person behind the name that may appear on a scholarship,
on a classroom, on a building,
or on a donor wall.
As we are working with donors we should structure
their planned giving with legacy management in mind.
If we keep the end in mind then we will do
a better job of structuring the donor's planned gift.
Understanding the pitfalls that loom before
us during the administration of a persons estate will provide
us with the context needed to make sure
the donor has the structure required to minimize the possibility of errors.
We can't completely eliminate errors but doing everything in our power to
minimize them is essential to good legacy management.
I like to provide you with some examples of the pitfalls of
poor planning that can have a negative impact on legacy management.
Knowing these can inform the structure of the donor's planned gift.
Here are some pitfalls to avoid.
Naming the wrong person as trustee.
Not having a plan for a herd of horses on the donor's ranch.
Not properly designate the donor's estate gift.
Not properly naming the charity in a will or trust.
Leaving too little or too much for the specific designation.
By this I mean,
the donor's endowment is large enough to make the impact they desire,
or the endowment may be so large that is providing more money than is needed.
Giving a specific asset the charity isn't equipped to handle.
Insufficiently notifying the charity to assist with
making sure the distribution is made accurately and efficiently.
And our last pitfall to avoid is not ensuring proper recognition for the gift.
Let me share a story that exemplifies
the positive outcome of structuring
a planned gift strategy with legacy management in mind.
We begin by being alert to the pitfalls one can
encounter when an estate is administered and the donors plan is set into motion.
Therefore, we made an intentional effort to make sure
the proper details were incorporated into the donor's legal documents.
We also made sure to work with the donor to build
relationships with his trustee and the other charities that will benefit from his estate.
We establish relationships with the major charities in
this plan so they were aware of his plans with us.
This was beneficial for a couple of reasons.
First, we set the bar for the other charities so the donor then required them
to provide him with clear documentation of how they would utilize his gift.
This provided his trustee with a complete and fully documented legacy plan.
Second, it systematized his legacy plans so all parties
involved were working in concert with one another to manage his legacy.
Let me highlight a few points touched on in this story.
It's important to have relationship and open lines of communication with a trustee
because that person will be the one responsible for executing the estate plan.
This communication will allow us to make sure the trustee doesn't take liberties with
the plan or make decisions that would be counter to the intentions of the donor.
This scenario stands in stark contrast to the typical plan.
A typical plan would be to send
the donor sample language to include in his legal documents.
Request a copy of the final document and
possibly ask the donor to sign a completed letter of intent.
The letter of intent adds detail to the designation of
the donor's gift that are not usually included in the legal estate document.
In my opinion, this doesn't provide the structure needed to minimize potential pitfalls,
and ultimately is not in the best interest of the donor's legacy.
This kind of approach structuring a planned giving strategy with legacy management in
mind may seem unconventional or atypical for those in the development field.
However, I believe our donor deserve for us to aspire to such high standards.
Let me share another story that exemplifies
the negative outcomes of structuring
a planned giving strategy without being mindful of legacy management.
UC Davis was a beneficiary of an estate about which we had minimal information.
We knew the designation and the expected amount.
There were great plans to name a fabulous facility in a highly visible area on campus
that would have been a tremendous addition to the campus
and a perfect way to honor the donor's legacy.
However, because we didn't have the proper strategy
in place there were significant failures in execution.
The first issue was a donor named his
housekeeper as a trustee to administer and execute his plan.
This individual was not equipped to handle this responsibility and,
in hindsight, felt entitled to more than her fair share of the estate.
The trustee improperly spent significant amounts of money.
By the time we were notified of the donor's death and were able to contact the trustee,
it was too late.
The money was gone and there was little we could do about it.
We utilize the court system which unnecessarily cost
money to get the trustee to remedy the situation.
Unfortunately, the trustee spent money on trips and items that didn't have much value.
The court negotiated a settlement and we were awarded a couple hundred thousand dollars.
That doesn't sound too bad except that the donor intended us to
receive $2 million to construct the facility on campus.
Because the amount we received was nowhere near the amount needed.
We couldn't construct the facility.
This is not the worst thing about this unfortunate situation.
The real tragedy is that the donor passed away
believing his legacy will be fulfilled and it was not.
Truly heartbreaking.
This lesson on structuring a planned giving strategy with
legacy management in mind provides the context you need to be
a better development professional by being donor centered and providing
assurance that you and/or your charity will serve as a legacy advocate.
If you have this mindset,
you will be more marketable in this career field and do a greater service to your donors,
their legacy, at any charitable organization where you might be employed.
After this lesson you should be able to define legacy management,
discuss how to structure a planned giving strategy with legacy management in mind,
and present an overview of
the administration of planned gift to fulfill obligations for legacy management.
This concludes our lesson on structuring
a planned giving strategy with legacy management in mind.
In our next lesson,
we will turn our attention to documenting gift acceptance policies.
Brian CaseyAssistant Vice Chancellor for Planned Giving
