I want to introduce you to a tool for collecting important information about giftable assets, the most valuable source of major charitable giving. I focus on seeking giftable assets simply because I know that significant gifts are usually funded from assets, not from income. Here’s one way to identify those assets.
Imagine saying to your new suspected donor, “Gary, I would like to invite a conversation with you about how you might have a major impact on our organization and benefit yourself at the same time through thoughtful asset allocation. I know that people work hard to accumulate resources to use during their lives, especially in retirement; to care for loved ones, to address professional obligations, and in many cases for their favorite causes. So I would like to invite a conversation with you about asset allocation that includes examination of pertinent tax issues relative to each choice, including charitable allocations. Let me offer some brief examples of what I mean.
You may be planning to sell a block of stock to care for a loved one. You may be planning to sell the vacation house you no longer visit. You may tell me you will start taking distributions from a deferred compensation plan soon. You may be planning for retirement and business succession and have to deal with business asset liquidation.
I hope this brief explanation helped. I have a simple form we might review together that can help guide our conversation. May I show it to you?”
If you already know Gary owns a vacation home or rental property you can offer it as an example as you suggest an assets inventory.
If you know Gary is the owner of a privately-held business and that he is 64 years old you can ask about retirement planning to suggest the inventory as a helpful tool, for both gift planning and business succession planning.
If you can find out that he owns $125,000 of Coca Cola stock purchased 20 years ago you have an opportunity to discuss leveraging his small dividend income into something much greater through a life income gift.
An old paid up life insurance policy can be a convenient gift source. You would be amazed to learn that many people forget about their life insurance policies over time and will agree that such a gift is worth considering.
Gary might own marketable shares in a privately-held corporation. He might be a participant in a partnership. His privately-held business might own real estate or other property that can be discussed in gift planning.
Many people approaching retirement are stunned to learn the amount they have passively saved in their deferred compensation plan over time and how the plan’s value contributes to their overall estate value.
Even offering two or three examples invites your possible donor to start thinking in these terms. Sometimes that’s enough.
You (and your gift planning expert) can invite a conversation about gift planning and estate tax reduction. You can introduce your new prospect to the risk of double taxation by explaining tax on income in respect of a decedent.
An Assets Inventory form can be a great ally in discovering gift potential.