Planned Giving Insights and Information

The Return of Gifts of Real Estate

It’s simply a matter of supply and demand - when demand outstrips supply, prices rise. That is the state of today’s real estate market in many parts of the country, and therein lies the opportunity for gifts of real estate. According to statistics issued by the National Association of Realtors, in April 2018 the median already-built home price rose 5.3% over the prior year, the 74th straight month there’s been an increase in the price of already-built homes. At the same time, the number of homes for sale fell over the prior year for the 35th consecutive month. In short, supply is limited and demand is outstripping supply, causing prices to rise for already-built homes.

Projecting Future Income From Bequest Expectancies

The significance of bequest commitments and the dollars they will ultimately bring to charitable organizations are often ignored or underutilized in financial planning. Yet, bequests are the largest source of planned gift income for most charities with planned giving programs (and in fact are often a large source of income for charities that don’t think they have a planned giving program). A simple analysis of your bequest expectancies can translate donors’ commitments into projected future income streams. This is valuable information for your board and other leadership and should foster a greater appreciation for the role of bequest commitments and the planned giving staff who obtain and track them.

Qualified Appraisal for Gifts of Life Income Interest

Donors receiving income from charitable gift annuities, pooled income funds, and charitable remainder trusts may decide to make a gift of their income interest to the charity receiving the remainder of the gift. Upon the transfer of the income interest to the charity, the life income gift is then terminated and funds become immediately available to the charity. Based on certain criteria related to each situation, the donor may receive an income tax charitable deduction. However, like with other non-cash gifts, donors need to be aware of the IRS substantiation requirements for an appraisal when making a gift of a life income interest to charity. Failure by the donor to comply with these requirements can result in the donor being denied the charitable deduction.