Trends in Gift Planning
Southeast Wealth Management Business, January 2008


Increase in Use of Certain Tools and Assets - With the recent issuance of sample CLT forms, the use of the 'Rodney Dangerfield' of planned giving vehicles will increase both at death (as part of a zero estate tax plan) and during life (for both income and estate tax planning). Real estate and closely held stock gifts will increase in frequency, as their values continue to rise and families look to integrate philanthropy into their personal planning.

Heightening Scrutiny - Based upon abuse (or sometimes, perceived abuse) of charitable tools, our government has imposed limitations on their uses - for instance, younger donors have been denied the ability to create lifetime CRTs; the ultimate recipients of a lifetime CLT have been limited; a 100% excise tax has been imposed on a CRT's UBI; and a CRT deferring fiduciary income has been questioned on an open-ended basis. As with the issuance of CLT forms and the approval of the FlipCRUT, our government should promote the placement of irrevocable charitable gifts, especially where the structure (even if complex) is within the letter and spirit of the law.

Increase in Collaboration - Michael Porter of the Harvard Business School established an economic concept called, the Value Chain, which defined how a business receives raw materials, adds value to those materials through processes, and sells finished products to consumers. What does the charitable Value Chain look like? Visualize a spectrum where one end is the accumulation of wealth and the other is a desired social outcome. We, as advisors, are in the middle of this chain adding value. As recognized under the economic concept, collaboration is a key component to increase consumer satisfaction. In our context, enhancing donor satisfaction and hastening the ultimate social good are goals that can be achieved when advisors (including charity representatives) adopt a donor-centered, collaborative view in structuring charitable gifts.

Jonathan Ackerman, 2002 President of NCPG (now known as Partnership for Philanthropic Planning), represents donors and tax-exempt organizations on a national basis. His advice is often sought by charities in their creation and operation, especially with respect to contributions and other funding opportunities, as well as by families (and their advisors) who desire to integrate philanthropy into their estate plans.