Which one are you?

Facebook users know that you can take a BuzzFeed quiz to help you find your avatar in pop culture, world history, or interstellar space. Are you an elf, or a hobbit? ZZ Top, or Foreigner? Kermit or Ernie? Mars or Pluto? Naturally, when I read Kathryn Miree’s Planned Giving Today article, “The Six Faces of Gift Planning Officers,” I thought, “there should be a quiz!” Kathryn says, “There are at least six distinct job models, each of which requires different skills, experience, and expertise. Some are heavily donor oriented, while others have little direct contact….The key to a successful match of staff and skills is found by understanding what the job entails and the strengths the job candidate brings to the table.” When the fit isn’t good, gift planners can feel frustrated, unappreciated and confused about the expectations for their position. ID-100117044

Unfortunately, my Six Faces quiz was just too hard to score. There are many crossovers among the aptitudes and skill sets. The Portfolio Manager and the Legal Think Tank both work independently, but in very different ways. The “I Do It All” fundraiser and the Major/Planned Gifts Officer need to know about much more than planned gifts, but at different levels. Finding the right fit isn’t a trivial matter, like learning whether your House is Stark or Targaryeon. But I’m guessing that most people don’t really need a standardized test to figure out which kind of gift planner they are or want to be. Here’s a quick taste of Kathryn’s categories. And to prove that PPP doesn’t play favorites, I’ve included a resource from the archives for each category.

The Calling Machine
Do you spend two-thirds of your time on the road, talking to prospects? Do you have a solid knowledge of planned gifts that allows you to develop, cultivate and close gifts on your own?

Forever Change the Way You Plan Trips: Mapping Donor Data (Katherine McKay), National Conference on Philanthropic Planning 2012

The Portfolio Manager

Do you have an assigned pool of donors and planned gift prospects? Do you like working independently to cultivate and steward “your” donors?

Changing “No” to “Yes”: Overcoming Common Obstacles to Planned Giving (Laura Hansen Dean, Pamela Jones Davidson), The Journal of Gift Planning, Vol. 14, No. 2 (2010)

The Cheeleader/Problem-solver
Are you the advisor to a large and/or decentralized team of fundraisers, helping them to surface planned gift prospects and close gifts? Do you enjoy sharing your knowledge of planned gifts with colleagues as well as donors?

SIGNALS — A Deliberate Approach to Discovery and Assessment of a New Prospect (Dan Shephard), National Conference on Philanthropic Planning 2013

The Legal Think Tank
Are you the go-to person in your organization for technical advice and illustrations? Are you an authority on the rules and regs who prefers to let others do the asking?

The CRT Stock Redemption Strategy for Philanthropic and Business Succession Planning (Jonathan Ackerman), The Journal of Gift Planning, Vol. 13, No. 3 (2009)

The “I Do it All Gift Planner”
Do you work for a smaller organization where you’re in charge of all types of fundraising? For planned gifts, do you focus mostly on “entry level” techniques, like bequests and beneficiary designations?

The “Plan” in Planned Giving…a Long and Short Three-Year Action Plan (Pamela Davidson), National Conference on Philanthropic Planning 2012

The Major/Planned Gift Officer
Do you enjoy being part of a team that often includes the donor’s advisors? Are you comfortable asking for help when your own planned gift expertise runs out?

Blended Gifts, Eh? Making the Most of This Emerging Workhorse for Major & Planned Gift Officers (Ashley Buderus, Gordon Smith), National Conference on Philanthropic Planning 2013

You can read Kathryn’s full article through the end of March, courtesy of Planned Giving Today, by clicking here.

Which face of gift planning is yours? Is there another that would be a better fit for you? Would you like to suggest a seventh face? Share your thoughts in the comments.

Ways & Means Chairman Unveils Major Re-write of Tax Code, Includes Limit on Charitable Deduction and Other Provisions Affecting Nonprofit Community

Last week House Ways & Means Chairman Dave Camp (R-MI) unveiled his much-anticipated comprehensive tax reform bill, dubbed the “Tax Reform Act of 2014,” that would dramatically alter the United States tax code and includes many provisions relating to charitable giving and tax-exempt organizations. The draft bill comes on the heels of 30 Congressional hearings dedicated to tax reform, 11 bipartisan tax reform working groups, three discussion drafts on specific areas of tax law, and more than 14,000 public comments on the matter, and has set off a tidal-wave of debate in and around Washington, DC for what is expected to ultimately become the largest re-write of the tax code since 1986. Although the bill faces a number of obstacles to passage, it will certainly act to frame the tax reform debate throughout the rest of 2014 and into 2015. The full text of the draft bill (975+ pages) is available here, with a helpful section-by-section summary (190+ pages) here. For a quick overview of the draft, review Chairman Camp’s press release or the executive summary.

Under Chairman Camp’s bill, the current seven tax brackets would be collapsed into three brackets of 10%, 25% and 35%, but 99% of households – those making less than $450,000 a year – would pay no more than the 25% rate. To achieve these lower rates, however, the bill would eliminate the personal exemption for dependents, and many deductions like state and local taxes and mortgage interest would be either eliminated altogether or limited in some way. The bill would also turn the vast majority of taxpayers – as many as 95% – into non-itemizers by raising the standard deduction from $12,200 to $22,000 for married couples filing jointly. There is little doubt the changes outlined above would have a dramatic effect on charitable giving in America, but the bill goes even further by making specific changes to not only the current-law charitable deduction but also the laws governing various tax-exempt entities. There are many provisions relevant to the nonprofit community in the bill, and below is a list of just some of the provisions. Under the bill:

An individual’s charitable contributions could be deducted only to the extent they exceed 2 percent of the individual’s Adjusted Gross Income (AGI).
The 50 percent limitation for cash contributions and the 30 percent limitation for contributions of capital gain property to public charities and certain private foundations would be harmonized to a single limit of 40 percent whereas the 30 percent contribution limit for cash contributions and the 20 percent limitation for contributions of capital gain property that apply to organizations not covered by the current 50 percent limitation rule would be harmonized at a single limit of 25 percent.

Taxpayers could deduct charitable contributions made after December 31st, the close of the tax year, but before the due date of the return, April 15th.
The amount of any charitable deduction generally would be equal to the adjusted basis of the contributed property. For the following types of property, however, the deduction would be based on the fair market value of the property less any ordinary gain that would have been realized if the property had been sold by the taxpayer at its fair market value: tangible property related to the purpose of the donee’s tax-exempt purpose, any qualified conservation contribution, any qualified inventory contribution, any qualified research property, and publicly traded stock.

The special temporary rules for conservation easements would be made permanent. The general rule would provide that deductions for conservation easements would be limited to 40 percent of AGI.

Income from intellectual property contributed to a charitable organization would no longer be allowed as an additional contribution by the donor. The deduction for the contribution of the intellectual property would be retained.
All entities exempt from tax under section 501(a), notwithstanding the entity’s exemption under any other provision of the Code, would be subject to the Unrelated Business Income Tax (UBIT) rules. A tax exempt organization would be required to calculate separately the net unrelated taxable income of each unrelated trade or business. In addition, any loss derived from an unrelated trade or business could only be used to offset income from that unrelated trade or business, with any unused loss subject to the general rules for net operating losses. Also, the deduction against gross income subject to UBIT would be increased from $1,000 to $10,000.

The private foundation excise tax rate on net investment income would be reduced to 1 percent. The rules providing for a reduction in the excise tax rate from 2 percent to 1 percent would be repealed. The provision would also repeal the exception from the excise tax for exempt operating foundations.
Private operating foundations would be subject to the excise tax for failure to distribute income like private foundations generally.

Type II and Type III supporting organizations would be repealed. Thus, organizations that support public charities would need to qualify as a supporting organization that is operated, supervised, or controlled by a publicly supported organization (i.e., a Type I supporting organization), or they would be treated as private foundations.

Donor advised funds would be required to distribute contributions within five years of receipt. An eligible distribution is a distribution made to a public charity. Failure to make an eligible distribution would subject the sponsoring charitable organization to an annual excise tax equal to 20 percent of the undistributed funds.

A tax-exempt organization would be subject to a 25 percent excise tax on compensation in excess of $1 million paid to any of its five highest paid employees for the tax year. The excise tax would apply to all remuneration paid to a covered person for services, including cash and the cash value of all remuneration (including benefits) paid in a medium other than cash, except for payments to a tax-qualified retirement plan, and amounts that are excludable from the executive’s gross income.

Certain private colleges and universities would be subject to a 1 percent excise tax on net investment income. The provision would only apply to private colleges and universities with assets (other than those used directly in carrying out the institution’s educational purposes) valued at the close of the preceding tax year of at least $100,000 per full time student. State colleges and universities would not be subject to the provision.

Penalties for failure to file various returns, disclosures, or public documents on organizations and managers would be increased.

It is also worth noting that the bill does not extend the IRA Charitable Rollover provision. Given the scope, and perhaps more to the point, the timing of Chairman Camp’s bill, it will face many obstacles in the road toward enactment into law. For example, Republican leadership in both the House and Senate (to say nothing of rank-and-file members) is not likely to sign-off on the bill any time soon, showing very little interest in advancing the issue of tax reform during an election year. Democrats, for their part, will outright oppose the draft, instead calling for tax reform that actually raises revenue. Further complicating matters for Chairman Camp is the fact that he recently lost his tax reform ally Max Baucus who left the Senate to become the United States Ambassador to China. Baucus’s successor as Senate Finance Committee Chairman is Senator Ron Wyden (D-OR), who has indicated several times in recent weeks that he is more interested in moving an extension of expired tax provisions, which includes the IRA Charitable Rollover, this year than a comprehensive tax reform package. In the weeks and months ahead, PPP will continue to review Chairman Camp’s legislation and monitor developments on this or any bill relating to tax reform. PPP will also continue to work with its many partner organizations in the Charitable Giving Coalition, which released a statement and press release on the Camp bill late last week.

NRC Nonprofit Fundraising Survey Now Available

The Nonprofit Research Collaborative (NRC) has just released their report about charitable receipts in 2013. 62% of responding charities saw gift receipts rise, and 67% met their fundraising goal. These are the best results since 2007.

Online giving, events and major gifts remain areas of increased receipts, with increases at 62% of charities. Board giving, foundation grants and corporate support increased at less than 50% of the charities using those methods. In one surprise, this is the second year where receipts have increased in response to telephone appeals. Those are not used by a wide range of charities, but after two years of very low rates of increase, they are trending upward.
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