Building an Endowment & Planned Giving in a Recession
I was in San Diego yesterday to give a presentation to the Board of Directors of Employment & Community Options, a public charity that provides employment services for disabled adults in multiple counties in California.
The presentation focused on endowment building and planned giving. We discussed why an endowment is key to the survival of a charity -- how, for example, an endowment can safeguard a charity if annual gifts or government funding drops off. We talked about planned gifts -- gifts like bequests, gifts of life insurance, and charitable remainder trusts.
You might think that all charitable giving decreases in an economic downturn, when just about everyone is feeling the pinch. But some recent studies conclude that charitable bequests (gifts in wills and revocable living trusts) actually increase in recessions. (Thank you to the Nonprofit Law Prof Blog.)
This makes sense to me based on my own work with clients. A lot of people want to make charitable gifts, but they may be unwilling or unable to part with any of their income. Instead, they might name a charity in their will or trust to receive a specific sum or a percentage of their estate after their death.
If you want to make a bequest and already have a will or trust in place, you should see your estate planning attorney to draft a codicil (for a will) or trust amendment (for a trust). If you are doing your estate plan for the first time, part of the planning process should focus on your charitable goals, including whether you want to make gifts to charities in your will or trust.
