Category Archives: Development Toolkits

Planned Giving

Planned Giving Toolkit

Has your parish recently conducted a capital campaign, but could really use a few more large, future gifts that could make a significant difference?  Or, is there a potential large donor in your parish who is capable of making a gift but is afraid to because of the current economic environment?  Or, maybe there is someone in your parish who would really like to make a difference but just doesn’t know how to do it?

Current scientific research suggests that over the next 50 years, there is the potential for an intergenerational transfer of wealth in the United States totalling anywhere from $41and $136 trillion dollars. This is the first time a transfer of this magnitude has occurred in American history, and it may very well be the last.

If someone believes in the mission and vision of our church, the tax laws of the United States, “make it possible” for individuals to use a variety of planned giving techniques to make charitable contributions, while avoiding taxes and permitting the transfer of dollars outside one’s estate.   In essence, individuals can support our mission at no net cost to themselves.

Our own research has shown that the parishes and programs of the Diocese can be significant beneficiaries of this transfer.

If you would like to conduct a Will/Planned Giving seminar in your parish, school or organization, that will help your parish and/or school obtain this type of support, the Office of Development can help you.

We will:

  • Meet with your finance or parish council to introduce the concept and to answer questions.
  • Draft invitations and parish bulletin announcements.
  • Help structure your presentation to fit your parish.
  • Recruit speakers and provide materials.
  • Monitor the impact of the program, do follow-ups, and advise you of the outcomes.

We can do this all at virtually no cost to you beyond copying, postage, refreshment and meeting space costs.

 

If you are interested, please contact Jim Lanahan, Director of Development, Diocese of Camden at 856-583-6125 or e-mail jlanahan@camdendiocese.org.

 

Glossary of Fundraising Terms

Glossary of Fundraising Terms

501(c)(3)

Section of the Internal Revenue Code that designates an organization as charitable and tax-exempt. Organizations qualifying under this section include, for example, religious, educational, charitable, amateur athletic, scientific, or literary groups. Most organizations seeking foundation or corporate contributions secure a Section 501(c)(3) classification from the Internal Revenue Service (IRS). Note. The tax code sets forth a list of sections-501(c)(4-26)-to identify other non-profit organizations whose function is not solely charitable (e.g., professional or veterans organizations, chambers of commerce, fraternal societies).

Annual Fund

Any organized effort by a nonprofit institution or program to secure gifts on an annual basis, either by mail or through direct solicitation, or both. Also, frequently called Annual Appeal, or Annual Giving Program. In the Diocese of Camden, officially known as The House of Charity – Bishop’s Annual Appeal.

Appreciated Securities

Gifts of securities include publicly traded stocks, but also mutual funds, Treasury Bills, notes, and closely held stock. The gift of appreciated securities held for at least one year allows a donor a charitable deduction for the market value of the gift, avoiding the payment of capital gains tax.

Articles of Incorporation

A document filed with the secretary of state or other appropriate state office by persons establishing a corporation. This is the first legal step in forming a non-profit corporation.

Bequest

A sum of money made available upon the donor’s death.

Bylaws

Rules governing the operation of a non-profit corporation. Bylaws often provide the methods for the selection of directors/trustees, the creation of committees, and the conduct of meetings.

Capital Campaign

Also referred to as a Capital Development Campaign, a capital campaign is an organized drive to collect and accumulate substantial funds to finance major needs of an organization such as a building or major repair project.

Capital Grant

Grant to provide funding for buildings, construction, or equipment, rather than program or operating expenses.

Case

The combination of reasons advanced by an institution or agency in justification of its appeals for support, with emphasis on its services; past, present and potential. One of the three basic pedestals on which fund-raising success must rest, the others being leadership and fields of support.

Case Statement

A carefully prepared document that sets forth in detail the reasons why an institution or agency merits support, in the context of the “case bigger than the institution,” with substantial documentation o f its services, its human resources, its potential for greater service, its needs and its future plans.

Challenge Grant

A grant that is made on the condition that other monies must be secured, either on a matching basis or via some other formula, usually within a specified period of time, with the objective of stimulating giving from additional sources.

Charitable Gift Annuity

A gift of cash or securities in exchange for the promise of lifetime income, now or later. A charitable gift annuity is a contract between the donor and charity that is part charitable gift and part purchase of an annuity. The total assets of the charity back the payments.

Charitable Lead Trust

A Charitable Lead Trust pays the trust income to a charity first for a specified period, with the principal reverting to the donor or going to other person(s) at the end of the period. Also called Income Trust.

Charitable Remainder Trust

A gift plan that provides income to one or more beneficiaries for their lifetimes, a fixed term of not more than 20 years, or a combination of the two. Assets, usually cash, securities, or real estate, are transferred to a trust which pays income to the beneficiaries for the term of the trust. When the trust term ends, the remainder in the trust passes to the charity. Can be established as a Charitable Remainder Annuity Trust with a fixed payout or as a Charitable Remainder Unitrust with a variable payout.

Charity

In its traditional legal meaning, the word “charity” encompasses religion, education, assistance to the government, promotion of health, relief of poverty or distress, and other purposes that benefit the community. Non-profit organizations that are organized and operated to further one of these purposes generally will be recognized as exempt from Federal income tax under Section 501(c)(3) of the Internal Revenue Code (see 501(c)(3)) and will be eligible to receive tax-deductible charitable gifts.

Community Foundation

A community foundation is a tax-exempt, non-profit, autonomous, publicly supported, philanthropic institution composed primarily of permanent funds established by many separate donors for the long-term diverse, charitable benefit of the residents of a defined geographic area. Typically, a community foundation serves an area no larger than a state. Community foundations provide an array of services to donors who wish to establish endowed funds without incurring the administrative and legal costs of starting independent foundations. There are more than 500 community foundations across the United States today.

Constituency

A category of donors and prospective donors, such as alumni, parents, members, parishioners, and in a broader sense, individuals, corporations and foundations.

Corporate Form

A community foundation that is incorporated as a non-profit corporation. Investment management of assets held by the corporation is the responsibility of the managers or board of the foundation. A community foundation may include both a corporate entity and component trusts. (seeTrust Form)

Corporate Giving Program

A corporate giving (direct giving) program is a grant making program established and administered within a profit-making company. Gifts or grants go directly to charitable organizations from the corporation. Corporate foundations/giving programs do not have a separate endowment; their expense is planned as part of the company’s annual budgeting process and usually is funded with pre-tax income. The Foundation Center has identified more than 700 corporate foundations/giving programs in the United States; however, it is believed that several thousand are in operation.

Cultivation

The process of gradually developing the interest of an important prospective contributor through exposure to institutional activities, people, needs and plans to the point where he may consider a major gift

Deed

A written document, properly signed and delivered, that conveys title to real property.

Demonstration Grant

A grant made to establish an innovative project or program that will serve as a model, if successful, and may be replicated by others.

Designated Funds

A type of restricted fund in which the fund beneficiaries are specified by the grantors.

Development Committee

May be synonymous with development board, or may be a committee of a board of trustees or directors charged specifically with overseeing development operations.

Donor Advised Fund

A fund held by a community foundation where the donor, or a committee appointed by the donor, may recommend eligible charitable recipients for grants from the fund. The community foundation’s governing body must be free to accept or reject the recommendations.

Donor Designated Fund

A fund held by a community foundation where the donor has specified that the fund’s income or assets be used for the benefit of one or more specific public charities. These funds are sometimes established by a transfer of assets by a public charity to a fund designated for its own benefit, in which case they may be known as grantee endowments. The community foundation’s governing body must have the power to redirect resources in the fund if it determines that the donor’s restriction is unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community or area served.

Endowment

The principal amount of gifts and bequests that are accepted subject to a requirement that the principal be maintained intact and invested to create a source of income for a foundation. Donors may require that the principal remain intact in perpetuity, or for a defined period of time or until sufficient assets have been accumulated to achieve a designated purpose.

Endowment Insurance

Life insurance where the face amount is payable to the insured at the end of the contract period or to a beneficiary if the insured dies before that (e.g., an insured purchasing an endowment payable at age 65. Upon reaching that age, the proceeds would be payable to the insured. If the insured dies prior to that age, the proceeds would be payable to the designated beneficiary as a life insurance benefit).

Estate

The degree, nature, and extent of interest that a person has in real property. All of the property, real or personal, that one owns and leaves at death.

Estate Plan

A plan for the disposition of one’s property at death, including the handling of property in the event of the incompetency or total disability of the estate owner. A will is a part of an estate plan.

“Face-to-Face Solicitation”

Solicitation directly via a call on a prospective contributor at his/her home, office or other selected location.

Family Foundation

“Family foundation” is not a legal term, and therefore, it has no precise definition. Yet, approximately two-thirds of the estimated 44,000 private foundations in this country are believed to be family managed. The Council on Foundations defines a family foundation as a foundation whose funds are derived from members of a single family. At least one family member must continue to serve as an officer or board member of the foundation, and as the donor, they or their relatives play a significant role in governing and/or managing the foundation throughout its life. Most family foundations are run by family members who serve as trustees or directors on a voluntary basis-receiving no compensation; in many cases, second- and third-generation descendants of the original donors manage the foundation. Most family foundations concentrate their giving locally, in their communities.

Foundation

A private non-profit organization with funds and a program managed by its own trustees and directors, established to further social, educational, religious, or other charitable activities by making grants. A private foundation receives its funds from, and is subject to control of, an individual family, corporation, or other group of limited number.

Future Interest Property

The donor gives remainder interest in a personal residence, vacation home, or farm, subject to the right to live in the home (or work the farm) for the lifetime of the donor and/or another person (see Retained Life Estate).

Gift Range Table

A projection by dollar amounts and total numbers for each category of gifts believed necessary to achieve a campaign goal, and emphasizing the importance of “big” gifts.

Giving Pattern

The overall picture of the types of projects and programs that a donor has supported historically. The past record may include areas of interest, geographic locations, dollar amount of funding, or kinds of organizations supported.

Grassroots Fundraising

Efforts to raise money from individuals or groups from the local community on a broad basis. Usually an organization does grassroots fundraising within its own constituency – people who live in the neighborhood served or clients of the agency’s services. Grassroots fundraising activities include membership drives, raffles, bake sales, auctions, dances, and a range of other activities. Foundation managers often feel that successful grassroots fundraising indicates that an organization has substantial community support.

In-Kind Contribution

A donation of goods or services rather than cash or appreciated property.

Independent Foundation

These private foundations are usually founded by one individual, often by bequest. They are occasionally termed “non-operating” because they do not run their own programs. Sometimes individuals or groups of people, such as family members, form a foundation while the donors are still living. Many large independent foundations, such as the Ford Foundation, are no longer governed by members of the original donor’s family but are run by boards made up of community, business, and academic leaders. Private foundations make grants to other tax-exempt organizations to carry out their charitable purposes. Private foundations must make charitable expenditures of approximately five percent of the market value of their assets each year. Although exempt from Federal income tax, private foundations must pay a yearly excise tax of one or two percent of their net investment income.

Internal Revenue Service (IRS)

The Federal agency with responsibility for regulating foundations and their activities. On-line at www.irs.gov.

Investment Consultants

Advisors who aid in the investment decisions of individuals and financial committees and officers of institutions. Investment consultants provide information and make recommendations about asset allocation, management structure, management review, and portfolio performance.

Letter of Intent

A grantor’s letter or brief statement indicating intention to make a specific gift.

Life Expectancy

The average number of years remaining for a person of a given age to live as referenced on a mortality or annuity table.

Limited-Purpose Foundation

A type of foundation that restricts its giving to one or very few areas of interest, such as higher education or medical care.

Matching Gifts Program

A grant or contributions program that will match employees’ or directors’ gifts made to qualifying educational, arts and cultural, health, or other organizations. Specific guidelines are established by each employer or foundation. (Some foundations also use this program for their trustees.)

Matching Grant

A grant or gift made with the specification that the amount donated must be matched on a one-for-one basis or according to some other prescribed formula.

Operating Foundation

Also called private operating foundations, operating foundations are private foundations that use the bulk of their income to provide charitable services or to run charitable programs of their own. They make few, if any, grants to outside organizations. To qualify as an operating foundation, specific rules, in addition to the applicable rules for private foundations, must be followed. The Carnegie Endowment for International Peace and the Getty Trust are examples of operating foundations.

Operating Support

A contribution given to cover an organization’s day-to-day, ongoing expenses, such as salaries, utilities, office supplies, etc.

Philanthropy

Philanthropy is defined in different ways. The origin of the word philanthropy is Greek and means love for mankind. Today, philanthropy includes the concept of voluntary giving by an individual or group to promote the common good. Philanthropy also commonly refers to grants of money given by foundations to non-profit organizations. Philanthropy addresses the contribution of an individual or group to other organizations that in turn work for the causes of poverty or social problems–improving the quality of life for all citizens. Philanthropic giving supports a variety of activities, including research, health, education, arts and culture, as well as alleviating poverty.

Planned Giving

Any gift given for any amount and for any purpose whether for current or deferred use, which requires the assistance of a professional staff person, a qualified volunteer, or the donor’s advisors to complete. In addition, it includes any gift that is carefully considered by a donor in light of estate or financial plans.

Pledge

A promise to make future contributions to an organization. For example, some donors make multi-year pledges promising to grant a specific amount of money each year.

Preliminary Proposal

A brief draft of a grant proposal used to learn if there is sufficient interest to warrant submitting a proposal.

Private Foundation

A nongovernmental, non-profit organization with funds (usually from a single source, such as an individual, family, or corporation) and program managed by its own trustees or directors, established to maintain or aid social, educational, religious, or other charitable activities serving the common welfare, primarily through grantmaking. U.S. private foundations are tax-exempt under Section 501(c)(3) of the Internal Revenue Code and are classified by the IRS as a private foundation as defined in the code.

Proportionate Giving

Giving that is commensurate with an individual or group capability in light of such factors as age, family commitments, economic circumstances, and the like.

Program Officer

Also referred to as a corporate affairs officer, program associate, public affairs officer, or community affairs officer, a program officer is a staff member of a foundation or corporate giving program who may do some or all of the following: recommend policy, review grant requests, manage the budget and process applications for the board of directors or contributions committee.

Prospect Rating

A procedure for evaluating the giving potentials of various prospects through judgments of knowledgeable persons, functioning as a special campaign committee.

Prospect Research

The continuing search by development offices for new and pertinent information concerning prospects already on record and for identification of individuals, foundations, corporations, etc., not yet listed, utilizing numerous reference sources.

Public Charity

A non-profit organization that is exempt from Federal income tax under Section 501(c) (3) of the Internal Revenue Code and that receives its financial support from a broad segment of the general public. Religious, educational, and medical institutions are deemed to be public charities. Other organizations exempt under Section 501(c)(3) must pass a public support test (see Public Support Test) to be considered public charities, or must be formed to benefit an organization that is a public charity (see Supporting Organization). Charitable organizations that are not public charities are private foundations and are subject to more stringent regulatory and reporting requirements (see Private Foundation).

Public Foundation

Public foundations, along with community foundations, are recognized as public charities by the IRS. Although they may provide direct charitable services to the public as other non-profits do, their primary focus is on grant making. To be eligible for membership in the Council, a public foundation must grant at least $60,000 yearly and must dedicate at least 50 percent of its organizational budget to a competitive grant making program.

Public Support Test

There are two public support tests, both of which are designed to ensure that a charitable organization is responsive to the general public rather than a limited number of persons.

  • One test, sometimes referred to as 509(a)(1) or 170(b)(1)(A)(vi) for the sections of the Internal Revenue Code where it is found, is for charities like community foundations that mainly rely on gifts, grant, and contributions. To be automatically classed as a public charity under this test, organizations must show that they normally receive at least one-third of their support from the general public (including government agencies and foundations). However, an organization that fails the automatic test still may qualify as a public charity if its public support equals at least 10 percent of all support and it also has a variety of other characteristics–such as a broad-based board–that make it sufficiently “public.”
  • The second test, sometimes referred to as the section 509(a)(2) test, applies to charities, such as symphony orchestras or theater groups, that get a substantial part of their income from the sale of services that further their mission, such as the sale of tickets to performances. These charities must pass a one-third/one-third test. That is, they must demonstrate that their sales and contributions normally add up to at least one third of their financial support, but their income from investments and unrelated business activities does not exceed one-third of support.

Restricted Funds

Assets or income that is restricted in its use, in the types of organizations that may receive grants from it, or in the procedures used to make grants from such funds.

Retained Life Estate

The donor gives remainder interest in a personal residence, vacation home, or farm, subject to the right to live in the home (or work the farm) for the lifetime of the donor and/or another person. Also known as Future Interest Property.

Scholarship Fund

Established to provide support for individuals who are pursuing some training or educational opportunity. Grants may be awarded to the individuals or they may be awarded to educational institutions.

Seed Money

A grant or contribution used to start a new project or organization.

Sight-Raising

Calculated attempts employing various strategies to induce previous donors as well as undecided prospects to raise their levels of giving.

Social Investing

Also referred to as ethical investing and socially responsible investing, this is the practice of aligning a foundation’s investment policies with its mission. This may include making program related investments and refraining from investing in corporations with products or policies inconsistent with the foundation’s values.

Supporting Organization

A supporting organization is a charity that is not required to meet the public support test because it supports a public charity. To be a supporting organization, a charity must meet one of three complex legal tests that assure, at a minimum, that the organization being supported has some influence over the actions of the supporting organization. Although a supporting organization may be formed to benefit any type of public charity, the use of this form is particularly common in connection with community foundations. Supporting organizations are distinguishable from donor-advised funds because they are distinct legal entities.

Tax-Exempt Organizations

Organizations that do not have to pay state and/or Federal income taxes. Organizations other than churches seeking recognition of their status as exempt under Section 501(c)(3) of the Internal Revenue Code must apply to the Internal Revenue Service. Charities may also be exempt from state income, sales, and local property tax.

Term Insurance

A life insurance policy that provides protection only for a specified period of time. A common policy period would be one year, five years, 10 years, or until the insured reaches age 65 or 70. It does not build up any of the non-forfeiture values associated with whole life policies.

Trust

A legal device used to set aside money or property of one person for the benefit of one or more persons or organizations.

Trustee

(1) A board member of a foundation. Trustees are responsible for setting foundation policy and making fund decisions. (2) An individual or corporation named to administer the terms of a trust document.

Whole Life Insurance

Also known as straight life or permanent life, this insurance may be kept in force for a person’s whole life and pays a benefit upon the person’s death. All whole life policies build up non-forfeiture values, but they are paid for in 3 different ways. Under a straight or ordinary life policy, premiums are paid for as long as the insured lives. A single premium policy is paid for at one time in one premium. Between these two types there are many limited-payment plans, under which the insured pays premiums for a certain period or until reaching a certain age.

 

(2) “We Need Money”

Introduction to “We Need Money”

This presentation involves several combined toolkits that are in a “decision tree” format.  The reader can follow the tree to determine what “level” or “type” of fundraising effort is most appropriate for their type and level of need.  Based on the outcome, the reader can then proceed to the appropriate fundraising “model” where he/she will be walked through the various steps and stages of implementation.

The presentations reference a variety of appendices (reference documents) that the reader may request from the Office of Development.

This toolkit is designed to be used by the individual reader or as a tool in interacting with the Office of Development.  If you would like to arrange a meeting or would like to receive the reference material, please call Jim Lanahan, Director of Development at 856-583-6125.

We need money

Planned giving advisory council (for the use of Pastors and Finance Councils)

(1) “Asking with Passion and without Apology”

Introduction to “Asking with Passion and without Apology”

(A Spiritual Approach to Stewardship Based on the writing of Henri Nouwen)

 

 

This presentation is in a PowerPoint format and summarizes the thoughts of Henri Nouwen as presented in his book, “The Spirituality of Fundraising.” Nouwen’s thoughts are provocative, challenging and transformative.

 

Prospective audiences include: parish staffs, finance councils, House of Charity volunteers, etc.

 

For more information and/or to arrange a presentation, please call Russell Davis, Director of Stewardship, at 856-583-6102.

 

Asking with passion and without apology show