Over the past three decades, I’ve seen how important allied professionals—including attorneys, accountants, certified financial planners, and chartered life underwriters—are to strengthening the financial foundations of institutions of higher education, cultural icons, and social service organizations.
Thirty years ago, I left my position as VP of a bank to become VP of advancement at a liberal arts college. Fast forward to 2021 and, having flunked retirement three times to date, I continue to work some hours in the field of development and specifically planned giving. Through my experience in these roles, I’ve become convinced that individually you, professionals in the legal community, don’t always realize the important role you’ve played in strengthening our communities.
Consider that at Northwest Harvest, a nonprofit organization supporting food banks in Washington state, the largest single endowment gift came largely as a result of the recommendation of an allied professional. (In the philanthropic field we tend to consider attorneys, accountants, certified financial planners, and chartered life underwriters as allied professionals.) The donor had a significant estate and was planning many large endowment gifts through his estate. In reviewing with allied professionals those institutions the donor had supported through the years, they realized that several institutions were not on the list to receive endowment gifts. The donor quickly chose to add them to the mix.
Many a donor has shared that it was a question posed by an allied professional in the discovery process of estate planning that led to a significant estate gift to an institution the donor had long supported.
For some reason, donors who are philanthropic during their lifetime often do not seem to retain that connection as they begin planning their estates. Yet, when queried as to whether they want to consider these institutions in their estate plans, they often readily agree. As one would expect, family members almost always take precedence and rightly so. But an opportunity to set up a named scholarship, fund a research project seeking to find a cure for a disease that has impacted the family, or simply wanting to ensure that society is there to help others can bring a huge sense of gratification to an individual or family. It can also set an example for the next generation.
When choosing to set up a future endowment, many donors choose to begin making annual gifts equal to the anticipated annual return of the endowment. By doing so, the future endowment in effect becomes a living endowment and the donors can see the impact of their future gift in action today. This is especially true with a scholarship funds, named orchestra chairs, scientific research funds, and targeted social programs.
Here at Northwest Harvest, where I serve as senior planned giving officer, we are seeing a significant increase in the number of estate gifts from Individual Retirement Accounts (IRA). Those over the age of 70 ½ are also taking advantage of the Qualified Charitable Distribution (QCD), which allows giving up to $100,000 per person per year directly from their traditional IRA. I do know of spouses who have each distributed $100,000 among their favorite charities in a year using the QCD.
Looking to the future, Congress is likely to consider new legislation concerning retirement options which will make your work all the more important for philanthropically inclined donors.