Planning for Wealth Transfer, Part 1

So you've probably heard talk here or there about "wealth transfer," the prediction that over the next few decades, an estimated $40 trillion or so will change hands as baby boomers and their parents pass on their accumulated assets to their children. But what does it mean for your organization, and how can you prepare for it?

In a webinar last month titled "Positioning for Wealth Transfer," Campbell & Co. Vice President Bruce Matthews talked about the need for organizations to prepare programs that take full advantage of this boon.

In Part 1 of this two-part series covering the presentation, we'll outline Matthews' advice for creating a planned-giving program. Stay tuned for Part 2 next week, where we'll lay out his advice on creating a bequest program.

Having already established relationships with prospects will be the key to taking advantage of the wealth transfer. Therefore, Matthews stressed the need to create a robust planned-giving program now and beginning to develop those relationships. He noted the following seven steps to starting a planned giving program:

1. Get institutional commitment. Has the board given its approval? Are the CEO and management teams fully supportive? Has the board passed resolutions that may be required by state law? And, most of all, Matthews said, "Make sure the CEO and board understand this is an investment that won't be felt for years."

2. Devise planned-giving policies. How does your organization define planned giving? What gift vehicles will you market and accept? Matthews recommends starting with beneficiary-designated gifts, where all the donor has to do is designate your organization as her beneficiary. Other questions to ask: Is your organization set up with a transfer agent and stock account, and do you have a gift counting and crediting policy?

3. Establish how you'll recognize planned-giving donors. You might want to set up a planned-giving society. But you'll have to establish the qualifications for membership. At what gift level will someone be eligible, etc.? Other ways society members can be recognized are through things like a donor wall, medallions or certificates. You might also include other benefits of membership such as invitations to annual luncheons and receptions, or seminars on estate planning.

4. Establish volunteer leadership. Will there be a planned-giving committee of the board, and what will its role be? Will it simply provide oversight? Should members have made planned-giving commitment themselves? Should they be responsible for suggesting other planned-giving prospects? Matthews also added that some organizations establish an advisors committee made up of professional accountants, financial planners and lawyers. If you choose to establish this type of committee, be sure to clearly define its role.

5. Determine how you'll handle financial accounts and investment policies. Come up with endowment fund investment policies and a spending plan. Will trust/annuity accounts be self-managed, or will you outsource their management?

6. Discuss what staffing and systems you'll need. What software will you need? How will planned giving be staffed? Do you need to hire a planned-giving specialist? What level of training will need to be provided to staff? Matthews said two good planned-giving software tools are Crescendo Interactive and PG Calc. Crescendo, he said, is geared more toward serving the donor, while PG Calc is designed more for the gift planner.

7. Establish how you'll market the program. Will you market it to everyone or segment out a group from your list — everyone over the age of 65, for example? How will the prospect list be built and, of paramount concern, who will follow-up on leads? Will you use the Internet to publicize the program? Matthews also suggested considering holding special seminars or workshops on the program for your constituents.

Click here to view the webinar on-demand.