Introduction
Simplified Planned Giving (SPG) is a process whereby financial services professionals can seamlessly add planned giving to their practices, and introduce this tremendous philanthropic opportunity to many of their clients who would not normally consider participating in the complexity and expense of typical charitable planning.
It is important to note that SPG is not a new tool, but a tried and true series of planning methods, that among other things, drive significant new life insurance and annuity product sales to the practitioner in the form of benefit guarantees. SPG Network has developed programs that condense effective life income plans and split interest gifts into powerful charitable planning solutions. Both the Charitable Gift Annuity (CGA) Program and the Easy Charitable Remainder Annuity Trust (ezCRAT™) Program are simple to learn, use, and implement.
Objectives
Each SPG Network program is designed to address a wide range of planning objectives, including securing lifetime income, managing taxes, protecting families, and supporting charitable causes. Because of the simplicity, flexibility, and tremendous benefits provided by our programs, there are literally countless applications. For examples of common planning objectives addressed by these programs, please refer to the “Needs Analysis Worksheet” under our forms section.
Opportunity
Many financial professionals are seeking opportunities to expand the services offered to clients. More and more, clients are looking for powerful solutions to their financial problems that address all of their concerns. Studies indicate that over 70% of American households currently make charitable gifts throughout the year. In the January 12, 2004 issue of Forbes magazine (p.36), Robert Egger indicates that individuals will donate some $160 billion to charity in 2004. Another $80 billion will be donated by businesses. A significant amount of this value will be gifted in exchange for the “living benefits” associated with Simplified Planned Giving.
Understanding the Benefits
SPG programs use life income plans and split interest gifts to help meet client objectives. This results in a charitable gift in which a donor retains an interest, typically via lifetime income payments and a tax deduction. The charity receives a remainder value to use for its charitable purposes. Such gifts can provide many attractive benefits to potential donors. Therefore, the most effective prospecting method is to first learn the benefits. In general terms, those benefits include:
1. Increasing discretionary (“spendable”) income
2. Reducing or eliminating income taxes, capital gains taxes, and estate taxes
3. Securing a tax free inheritance for chosen heirs
4. Leaving a lasting family and social legacy
Recognizing Charitable Intent
As great as the benefits of Simplified Planned Giving are, establishing charitable intent is still an integral part of identifying potential clients. The good news is that recent surveys indicate the over 70% of American households regularly donate to charity. However, few are aware of the benefits of life income plans, split interest gifts, or other forms of planned giving. For most, charitable giving consists of writing a check to a local charity or participating in the United Way drive at work. The average American would have difficulty naming ten charities, but typically has one or two causes close to heart. Many SPG program participants started with no specific charitable intent at all. However, they all were very interested in one or more of the income and/or tax benefits mentioned previously.
Few people wake up in the morning and decide to give money to charity. However, many clients, once they have been educated about the living benefits of SPG, realize that they can meet their financial objectives AND support their favorite charitable causes at the same time. For such clients, charity truly begins at home.
