This week's piece is self-penned, written for a future Planned Giving Today issue (although the link to the publication itself is here: Planned Giving Today | Mary Ann Liebert, Inc., publishers (liebertpub.com)). This piece is a bit longer than what you usually see here in the Expert section, but hopefully you will find it chock-full of good stuff and will keep it close as a reference for all things to do with bequest intention language in the future!
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Say you are a nonprofit (which you may well be, reading this article). And, let’s say you have a strong case statement for support. It took you a while through your board’s strategic planning process, but now you are really clear regarding your institution’s mission, vision, and values. Donors and potential donors can now truly understand who you are and what value you provide to society. Check that box!
However, there is another challenge to overcome: you’re a nonprofit that has historically been offering donors the opportunity to donate to your nonprofit ONLY via cash, check, or credit card donation. When donors go to your website, that’s what they see. So, if you’re trying to raise money for high-dollar financial goals tied to your strategic plan, the low-dollar cash asks and the high-dollar aspirations might not be in sync with each other, which can be a confusing message to donors of high capacity and high affinity to your organization.
However, recently, you and your board have concluded that JUST offering present-day cash giving is limiting. Maybe your nonprofit should offer the opportunity to have people donate non-cash assets as well while they are living. Non-cash donations such as publicly traded securities, closely held stock, life insurance, tangible personal property, and real estate are viable options, potentially handled through third parties like The Giving Block, Realty Gift Fund, The Fine Art Group, and Charitable Solutions. Your board votes to approve such potential asset donations via a new gift acceptance policy. Another box to check!
Then, your board decides to go next-level: to market deferred giving, otherwise known as planned giving, or future-based giving, to its constituency. It amends its gift acceptancy policy to include deferred/planned giving options such as charitable gift annuities, charitable remainder trusts, charitable lead trusts, and bequest intentions. A vote is passed by the board once again. Check!
Now, you FINALLY have the momentum you need to be wildly successful at accepting the right types of gifts toward the right strategic objectives at the right time. Triple check!
However, it also brings forth a good problem to have: your nonprofit doesn’t know how to WORD it so that wealth advisors, family offices, and trusts & estates attorneys know what LANGUAGE to use when their clients are considering donating to our nonprofit!
Well, have no fear, solutions are here!
First, be sure to list something that seems obvious: your official nonprofit name and your physical (and mailing) address. Then, also list your Tax Identification Number (TIN), which is like the Social Security number for the nonprofit, helping to identify the EXACT institution donors are looking to fund. Sounds crazy, but if the donor gets the name and address wrong and does NOT include the TIN (while no longer being around to tell you what he or she REALLY meant to say) the money could go to the wrong institution---or otherwise get tied up in legal issues regarding how to disburse the money appropriately. Having donors take the extra time to get the details right starts with YOU training them to get it done right. Leave nothing to chance. Make it so that a sixth-grader can understand how to find the information needed.
Worth mentioning here: donors, potential donors, and their advisors could be looking for this type of information in the off-hours, which is all the more reason to ensure that it is listed here and easily found. If nonprofits don’t have a good website presence, and information like this is not readily available, AND the individual needs to make bequest intention decisions quickly while in full draft documentation mode, they may leave your institution behind. I am sure, as an individual shopping for information yourself, if it gets too hard, you probably won’t do it. I know eventually I will give up, especially if it is something I (and others) don’t HAVE to do, like charitable giving!
So, enjoy this sample language in italics below that you can adopt to your own website, newsletter, social media, and other marketing materials. Professional advisors, potential donors, and donors will all appreciate it!
An unrestricted bequest:
I hereby give, devise and bequeath to the FORMAL NONPROFIT NAME _____ dollars ($_____), or _____ percent (_____ %) of my (residuary) estate, to be used for the benefit of NONPROFIT as ITS GOVERNING BOARD thereof may direct.
A restricted use bequest:
I hereby give, devise and bequeath to the FORMAL NONPROFIT NAME _____ dollars ($_____), or _____ percent (_____ %) of my (residuary) estate, to be used for the benefit of (SPECIFIC AREA) at NONPROFIT. If at some time in the future this purpose no longer exists, NONPROFIT may use the funds for any purpose which, in its opinion, most nearly approximates the Donor’s stated purpose.
For an existing permanent fund:
I hereby give, devise and bequeath to the FORMAL NONPROFIT NAME _____ dollars ($_____), or _____ percent (_____%) of my (residuary) estate, to be added to the _______________ Fund, subject to the terms in a Statement of Understanding on file with the NONPROFIT. If said Fund no longer exists, then it may be used as the GOVERNING BODY OF NONPROFIT may determine.
For a new unrestricted permanent fund:
I hereby give, devise and bequeath to the FORMAL NONPROFIT NAME _____ dollars ($_____), or _____ percent (_____%) of my (residuary) estate, to constitute a true endowment fund to be known as the _______________ Fund, such fund to be kept invested by the GOVERNING BODY OF NONPROFIT, the annual income there from, as determined by NONPROFIT’s spending formula, to be used for the benefit of the NONPROFIT in such manner as the GOVERNING BODY OF NONPROFIT may direct. This Fund, for the purposes of investment, may be combined with other funds of NONPROFIT.
For a new restricted permanent fund:
***NOTE: Our nonprofit encourages donors who are considering a restricted bequest to speak with a member of the development staff about appropriate language and minimum funding thresholds. For assistance drafting bequest provisions or further guidance regarding restricted bequests, bequests of retirement plan assets, or testamentary planned gifts, contact our Development Office at NUMBER or E-MAIL ADDRESS.
Last point of note for you, dear reader: bequest intention language is used in the governing document (a will or trust, for example) that SENDS the money over to the nonprofit at someone’s passing. In certain situations, a Memorandum of Understanding (MOU) will CATCH that distributed money and allocate it very specifically to whatever it is that the donor intended. For example:
Sample MOU language in italics below:
The following is a Memorandum of Understanding (MoU) between NAME (the Donor) and NONPROFIT for the purpose of documenting current intentions regarding the use of a future gift to NONPROFIT from her estate.
This MoU may be changed or canceled by the Donor at any time upon giving notice of cancellation to NONPROFIT.
Gift/Fund Instructions:
The gift will be used to establish the NAME Fund, described here:
● Description of FUND
If, for any reason, grants are not able to be successfully deployed in any given year, these grants can be applied to a broader location.
Date:
By: ______________________________________
DONOR
Date:
By: _______________________________________
NONPROFIT Rep
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