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Editor’s Note: The
Planned Giving Pulse
interviewed several
industry leaders
about the future of
the planned giving
industry. This
interview took place
prior to the U.S.
Presidential
election.
Debra Ashton is
author of America’s
Blue Bible of
planned giving, The
Complete Guide to
Planned Giving,
Revised Third
Edition, published
in April. She has
been the Director of
Gift and Estate
Planning for four
charities in the
US: Boston College,
Boston University,
Wheaton College, and
WGBH/PBS. She
started her career
in planned giving at
Boston Safe Deposit
and Trust Company in
1975. In addition
to speaking widely
to planned giving
and fund raising
groups in the US and
Canada, she has also
published articles
in many fund raising
and planned giving
publications. Please
visit her website
at:
www.debraashton.com.
Planned Giving
Pulse: What do you
think the Future of
the Planned Giving
Industry holds over
the next decade?
Debra Ashton:
More government
supervision and
oversight for both
charities and donors
is in the future
because of abuses by
both. Congress is
putting charities
and donors under a
microscope.
There have been many
changes in the last
couple of months
with abuse issues
with regard to
donations, most
notably cars and
intellectual
property. Congress
has figured out that
people are trying to
scam the government.
Pulse: In addition
to government
regulation of
charities, what are
some of the other
issues?
Debra Ashton:
Planned Giving in
the next 10 years is
going to be even
more important in
the life of the
donors and
charities. The
simple reason is
demographics.
People are living
longer and the
ability to make a
straight outright
gift may no longer
be an option because
people are worried
about having enough
wealth to support
them through a
catastrophic illness
or living to 100.
Charities that are
not engaging in some
sort of planned
giving will be left
in the dust compared
to charities that
are practicing
planned giving
aggressively.
The estate tax is
scheduled to be
repealed in 2010.
If congress doesn’t
act, it will come
back in 2011. The
estate tax exemption
in the U.S. is
scheduled to
increase to $3.5
million by 2009.
For a couple, that
is $7 million of
exempt assets
Essentially, within
a few years, only a
tiny percentage of
the U.S. population
will actually have
an estate tax at
all. People do not
agree on this
issue. There is
speculation that the
exemption might get
passed at between
$3.5 and $5
million. Most
people will not have
an estate tax. Only
1 or 2 % of the
American population
will be subject to
the tax. People who
formerly made gifts
to charity to save
estate taxes will no
longer have that
incentive. However,
many very wealthy
individuals don’t
want to leave their
whole estate to
their children. The
jury is still out as
to whether the
increasing exemption
of the estate tax
will or will not
hurt charitable
gifts. In addition,
others say people
will have more money
so they will give
more to charity.
Some say that the
wealthy have a limit
in their head as to
what their heirs
should get.
Pulse: What other
changes will take
place?
D. Ashton:
We are going to have
more commercialized
schemes for life
insurance.
Companies have
created schemes
whereby donors
lend their insurable
interests to their
charity of choice.
More commercialized
schemes for life
insurance are being
promoted now than
ever before. Life
insurance has
traditionally been a
vehicle to protect
family and heirs.
Now it is being
marketed as a “make
money” scheme and no
one is actually
giving up money to
be charitable. What
this could result in
is that the
preferential tax
treatment for life
insurance may be in
jeopardy because it
is now a commodity
to be exploited.
Pulse: How
will the U.S.
Presidential
election affect
Planned Giving?
D. Ashton:
U.S. Tax law may be
changing. If Kerry
gets in he is going
to raise the tax
rate for the top 2%
of taxpayers. And
if Bush gets in he
won’t raise the
rates from the
current 35% rate.
If Kerry gets in we
don’t know what he
will do with the
Estate tax.
Obviously there is
the potential for
more changes.
Pulse: What
about the
intergenerational
transfer of wealth?
D. Ashton:
As the population
ages it is worried
about having enough
money to carry them
through the later
years that 10 or 20
years ago were not a
problem. Planned
Giving in general is
going to be a bigger
piece of the
fundraising
department. Donors
are just worried
about surviving. If
charities are not
doing planned giving
they are missing the
boat.
As a result of more
financial
professionals
promoting charitable
vehicles, donors are
becoming more
sophisticated and
they want more
control. |