Church Fundraising - Showing Donors How They Can "Give It Away and Still Keep It"

http://thesmartgiver.com If you want any chance at all at attracting a major gift, you have to show the donor how they can "give it away and still keep it."

Here's what I mean.

Meet Ed. Ed is 72 and has two children. He lost his wife two years ago. He owns stock in a company that has appreciated in value tremendously over the last 30 years. He paid $20,000 for his shares. It's now worth $500,000.

While the stock is now worth a lot of money, it doesn't produce any income because the stock does not pay dividends. He doesn't want to sell and reinvest in something that will produce an income because he doesn't want to pay the capital gain tax on $480,000. His plan is simply to leave the stock to his kids because he knows it will receive a step up in basis at his death and they can sell it if they want and pay no capital gains tax.

Here's what his present plan looks like. Note that your church is not part of the plan.

Current income: 0
When Ed dies:
--To the children: $500,000
--To your church: 0

But if you can show Ed how to "give it away and still keep it", here are the results:

1. First, you show Ed how to sell without paying a capital gains tax.
2. This gives him the ability to reinvest the entire $500,000 in an income-producing investment.
3. Let's assume he can get 6%. That would provide Ed an income of $30,000 per year.
4. Ed's life expectancy: 15.5 years x $30,000 = $465,000 total income.
5. Ed's income tax deduction: $243,000. He can spread this over the next 6 years. It's a good bet Ed won't be paying any income taxes for a while, making the $30,000 go that much farther.
6. Ed uses a portion of his increase in income and his tax deduction to buy a $500,000 life insurance policy and names his children as beneficiaries.
7. Then when Ed dies:
a. To his children: $500,000
b. To your church: $500,000

Which looks like a better plan to you?

Ed's situation is vastly improved. He's happy. His kids still inherit $500,000. And your church gets a $500,000 gift. All because you were able to show Ed how to "give it away and still keep it."

Category:

Howto & Style

Tags:

• church
• church fundraising
• major gift
• tax
• tax planning
• capital gain
• avoid capital gain