Charity and estate plan

[DoingHomework]

We need some advice! I'm not sure if this is the right place to ask but hopefully someone will move it to the right place if not.

My wife and I have supported a regional charity for several years through modest donations. We give a total of a couple of thousand a year after including everything - "membership", events, etc. That's enough to be among the top 50 of all their donors. We've also become friends with some of their senior staff for various reasons over the years including some professional networking.

A few years ago when we did our estate plan we included the charity as the residual beneficiary - they get everything if our primary beneficiary dies first. We have casually mentioned that to a couple of our friends on the staff there but have mostly dismissed it since we are still pretty young and don't expect the organization to be getting anything for decades. Nothing has ever come from those mentions (which is good) except that they have encouraged us to let the development people know so they at least have a record of it.

We've always kept quiet about it and not mentioned it to the development people. Recently they had a check box on a donation card to let them know if they are in your estate plan. I checked it. Now the director wants to meet with us. I'm sure they want to know the details, and that's fine. I also know from things some of our friends on the staff have said that most of the people who do this are in their 80s so I think they may think the gift is more imminent than we hope it is!

We have no kids so our primary beneficiary is a nephew and the nephew has inherited a decent sum from another relative since we wrote our estate plan. We have already decided to remove him as our beneficiary and leave everything directly to 2 different charities, one of which is the one that wants to meet with us.

We need some advice on how to handle the situation. We don't really want the attention, and I'm sure they will respect that. We're fine with having dinner, and even telling them the details of the trust/will. But we also view this as remote enough that we don't really think it is a big deal and don't want to lead anyone on either. We're in our 40s and don't expect to die for a long time. The amount of money they would get if we died today would be about 15% of their total annual revenues so it is significant. Based on what they publish, it would be among the largest private gifts they have ever received.

Should we just embrace the gratitude and attention? We actually don't view it as a major gift at this point because we are young. But is it disrespectful to them to treat it like it is no big deal? Basically, we not expecting to be treated special but we've never done anything like this so we also don't really know what the right etiquette is.

Any suggestions? We'll probably just play it by ear...

 

[braumeister]

I would tell them your plan at dinner, but stress that it's merely your current plan.
Avoid giving them anything in writing, and also stress that you expect it to be far in the future.
Being a cynical sort, I could see them working up a plan to coax more out of you sooner (there are lots of ways to do that), and you sound like you would not welcome such advances. Keeping everything strictly unwritten (as far as they know) would give you both the flexibility to change your mind later and the peace of keeping your donations at their current manageable level.

 

[DoingHomework]

I would tell them your plan at dinner, but stress that it's merely your current plan.
Avoid giving them anything in writing, and also stress that you expect it to be far in the future.
Being a cynical sort, I could see them working up a plan to coax more out of you sooner (there are lots of ways to do that), and you sound like you would not welcome such advances. Keeping everything strictly unwritten (as far as they know) would give you both the flexibility to change your mind later and the peace of keeping your donations at their current manageable level.

Thanks. I had not thought about those things. We definitely don't want to do anything irrevocable so not putting anything in writing will be the plan. And we're probably now on the list for getting hit up for more but that ship has probably sailed.

 

[FIREd]

I am in a similar situation (late 30s, no kids, one niece who will inherit enough already), so I understand the dilemma. It does seem that, at your age, it is too early to start having this conversation with the charity of your choice. They may not get the money for decades (they might also point out that money you give today is much more valuable to them than money they might receive in 50 years and "encourage" you to increase the amount of your current donations). Also, if things go badly enough (huge end of life expenses, bad stock market, or whatever else) there may not be much money left in your estate (it's hard to know what your financial picture might look like in 40-50 years). The charity might also be out of business by the time you pass away. I don't know, it just all seem premature.

 

[frayne]

I would pass on dinner and keep mum on the whole subject. In other words, keep the worms in the can. What you do with your estate is no ones business but your own and much can happen between now and when you pass on.

 

[MichaelB]

This does not sound like a large NFP with professional fundraisers at the helm, so I would give them the benefit of the doubt. Letting them know is the right thing to do, as is asking them to be discreet and passive. You may be surprised and find them agreeable to this.

 

[Nords]

A few years ago when we did our estate plan we included the charity as the residual beneficiary - they get everything if our primary beneficiary dies first. We have casually mentioned that to a couple of our friends on the staff there but have mostly dismissed it since we are still pretty young and don't expect the organization to be getting anything for decades. Nothing has ever come from those mentions (which is good) except that they have encouraged us to let the development people know so they at least have a record of it.
We've always kept quiet about it and not mentioned it to the development people. Recently they had a check box on a donation card to let them know if they are in your estate plan. I checked it. Now the director wants to meet with us. I'm sure they want to know the details, and that's fine. I also know from things some of our friends on the staff have said that most of the people who do this are in their 80s so I think they may think the gift is more imminent than we hope it is!

Am I understanding this situation correctly? Did you just make yourselves more valuable to the charity if you're dead than if you're alive? Maybe they have a reason for thinking the gift is more imminent than you expect...

We need some advice on how to handle the situation. We don't really want the attention, and I'm sure they will respect that. We're fine with having dinner, and even telling them the details of the trust/will. But we also view this as remote enough that we don't really think it is a big deal and don't want to lead anyone on either. We're in our 40s and don't expect to die for a long time. The amount of money they would get if we died today would be about 15% of their total annual revenues so it is significant. Based on what they publish, it would be among the largest private gifts they have ever received.
Should we just embrace the gratitude and attention? We actually don't view it as a major gift at this point because we are young. But is it disrespectful to them to treat it like it is no big deal? Basically, we not expecting to be treated special but we've never done anything like this so we also don't really know what the right etiquette is.

You're essentially dangling a huge juicy sausage in front of a starving dog. The charity's development staff are obligated to pursue the funds just to make sure that they're a legitimate expectation, and the rest of the charity staff would like to include that expectation in [-]your life expectancy[/-] their long-range planning.

It's quite possible that they're just going to do their best to keep the relationship on good terms and to let you know more specific ways to implement your eventual gift. By asking you what type of granite you want the new wing to be made of, or exactly how you'd like your names to be spelled on the plaque, they're going to build in a feeling of reciprocity and commitment. They may be letting you know that the new building could be called the "DoingHomework Facility" but that another donor's interest might downgrade your donation into the "DoingHomework Lobby of the Buffett Facility". In other words they're going to do their darndest relationship building to make sure that you don't get cold feet or be seduced away by some other charity. Maybe they'll inspire you to get a little competitive about giving more now. It's what development coordinators learn how to do.

It's also possible that you'll have an opportunity to hear about their charitable remainder trusts, where you give them the money now and they give you an annuity for the remainder of your (hopefully long) lives. They might be able to arbitrage a little money now between the size of your CRT and their cost of buying you the annuity. At the very least they'll do their fiduciary duty to turn your sentiment into an irrevocable commitment.

This sort of overly solicitous attention is one of the reasons that we choose to do our giving anonymously through a charitable gift fund.