Charitable Thoughts: Practical Advice if You’re Planning to Give

I’m a sucker for the very practical, unfussy expert advice you get from shows like “This Old House Radio Hour” and “The Splendid Table.” If I come away with one or two tips I can remember and start using, I gain a sense of added competence that puts me in a great mood.

So I’d like to share with you some insights from a panel discussion I attended last month on gift planning, hosted in Sarasota, Florida by Charitable Gift Planners of Southwest Florida, where I’m a member.

The panelists were Stacey Corley, president of Sarasota Memorial Healthcare Foundation, Jeff Troiano, partner and head of the estate planning practice at law firm Williams Parker, and Sarasota Community Foundation board member and panel moderator Susie Bowie, president/CEO at the William G. and Marie Selby Foundation.

Your agreement, their policy

First, the two key documents to be aware of are the gift agreement—the legally binding contract between donors and charitable organizations—and the gift agreement policy, which is the charitable organization’s formal policy on what kinds of gifts it will accept.

The gift agreement should include:

• The correct names of the parties (donor and charity),

• The amount of the gift and the gift format or vehicle (e.g., securities, cash)

• Timing of the gift

• Purpose of the gift. If you’re like most donors, you really care about what you want to support, so be clear. Be sure to include a secondary use for the gift

• Whether the gift is an endowment (used to produce income, with the original gift untouched) or is expendable (can be spent in its entirety as soon as it’s accepted)

• Recognition—whether you want anonymity or to be recognized by name. Including specifics on naming rights (more on this later)

• Any ongoing reporting requirements you expect from the organization

A gift agreement is advisable, the panelists stressed, even for cash donations. Of course, a gift agreement should conform to the charitable organization’s gift agreement policy.

Are you being clear?

Most likely, your charitable intentions are not reflected in your estate plan. Even with their extensive experience, the panelists were dismayed that all too often, the latest intentions of deceased donors never make it into their estate plans.

They’ve seen it happen even when donors have discussed their intentions with family members and the charitable organizations.

Clearly communicating your wishes means including everyone at the table—your family, financial advisor, estate planning attorney, and the charitable organization.

You also want to ensure—and not just assume—that your wishes align with the organization’s needs. Communicating before the agreement is made ensures your gift is directed where it’s needed.

Build flexibility into your gift agreement. Make sure a “next-best use” is included in the gift agreement and designate a family member or someone else who can decide in your name should the organization need to use the gift on something else.

Naming rights

The overlying theme of the discussion was, be very clear—not just about your intentions, but about every important detail of your gift.

Naming rights are often one of the hardest parts of a gift agreement, said estate planning attorney Triano. Donors’ intentions about naming are often too vague. Be specific about how the name should appear, where, and for how long.

Plan for contingencies. Many buildings have a life of 75 or 100 years—and if your name is on it, your agreement should stipulate where your name moves to. If the charitable organization has a time limit on name displays, that should be made clear to you and spelled out in the gift agreement.

Even if your gift is anonymous, consider including a moral clause in your gift agreement. You or your heirs may have a change of heart if the charitable organization is criminally implicated.

Gifts of art

Before considering donating artwork, please realize that your gift will probably be a net negative for the organization. I’m talking about a single piece or a few unrelated works, not a curated, appraised collection that might be considered for acquisition by a reputable museum or for auction by one of the large houses.

Most policies don’t include artwork—and shouldn’t, the panel agreed, unless the organization intends to display the art.

Uh, yeah, hang on to that one!
Image created with ChatGPT

Donated art is difficult to value and to sell because most donated art has sentimental value only, for the owner. Furthermore, many donors don’t want their gift of art to be sold—and are insulted if it is. So don’t be insulted if the organization politely declines your gift of art. Accepting even one piece of art is often a slippery slope to ending up a storage bin of unrelated, relatively low-value assemblage of artwork. The wise organization that decides not to accept art will make no exceptions.

Gifts of stock and real estate

Most charitable organizations that accept gifts of stock will sell your gift immediately on receiving it. If you have strong feelings that your gift should be retained and not sold—to drive dividend income for the organization, or to be sold later because you believe it may appreciate even more and represent an even larger gift—then make your intentions clear before making the gift.

Donors of real estate sometimes want to be deeply involved in the sale transaction, giving input on sales timing, price, perhaps even the choosing the selling agent. If that’s you, realize that this could be a surprise to the organization, and be clear about how involved you’d like to be when discussing the gift. If you have good reason to believe your involvement will benefit the organization, however, don’t be shy. Bowie has seen real estate gifts work out better when a smart donor can pitch in effectively.

Your reporting expectations

If you expect reporting, put it in the gift agreement. You may expect a written report, while your counterpart at the organization may be planning on providing updates by phone and email. Many charitable organizations are surprised that speaking with a donor’s family five times over a half year isn’t perceived as reporting, while a single typed page is.

Make yourself known

If you’re lucky, you’ll work with professionals and organizations who are expert listeners and noticers. Someone like Corley, who just happened to be looking at a prospective donor as an organization’s development officer was talking about possible gifts and noticed his subtle body language. She led the organization to the right solution, and a very generous donation, based on her ability to read her client.

But don’t assume this kind of telepathy from the people around you. Make your intentions clear. And put them in writing.