There is a new idea
in town. What if
charitable
organizations
focused not on the
latest tax
structured financial
gift but on their
target members?
We need to focus our
attention on doing
what is of
significant benefit
for our members.
Over the years,
chairpersons
constantly refer to
the importance of
their leading
benefactors or
members. We need to
determine how we can
focus on their best
interests when it
comes to Planned
Giving. A process is
required that will
bring true value to
the member and the
charitable
organization while
not endangering the
relationship between
the two. We can then
begin to utilize
allied advisors who
understand the
importance of this
strategic process.
As an organization
we do not
consciously want to
turn our most valued
relationships into
commodities, but
unfortunately this
happens all too
often. A classic
example is when an
allied professional
comes up with a new
and creative tax
twist and gains
access to the
charitable
organization’s
members. The product
is then presented or
“sold” to your best
members. This
solution is often
based on the needs
of the allied
advisor as compared
to the actual needs
or benefits of the
member and
organization. The
result of this
process is that it
turns your members
into commodities and
sometimes away from
your organization.
An organization can
be paralyzed by the
fear of their
members being
misguided. Over the
last 30 years we
have seen this time
and time again.
Here is an example
that we were asked
to advise on. A
short while ago we
received a phone
call from an
organization t hat
we consult for. A
life insurance
contract was being
offered to the
organization on
behalf of one of
their members. It
was a contract that
required payment
amounts to remain
fixed each year. The
payments were set at
quite a high level
today but there was
a promise of
dividends in the
future. The client
was in a high tax
bracket, but would
be in a much lower
one at retirement
after working full
time for another 10
years. The
organization’s
member was excited
because they wanted
to leave a
significant amount
of money to this
organization that
they believed in and
were fully committed
to.
To do the review, we
used The Strategic
Tax Planned Gift
process. We found
that there was
potentially going to
be a challenge if
the client lived
beyond 10 years. It
would become
difficult for them
to continue paying
the fixed premiums
from their cash flow
after they
retired. It became
apparent that after
retirement they
would have to stop
the payments thereby
nullifying the life
insurance contract
and any future benefits that may come
to the intended
organization. No
one told them how
their decision today
would affect them 10
years later. We
knew that they would
feel horrible to
have committed all
this money to later
find out that the
strategy did not
work.
The Strategic Tax
Planned Gift process
created a new
paradigm. Instead of
a commodity- based
solution that had
huge dangers, we
created a
value-based solution
with wonderful
opportunities. This
created a long term,
sustainable benefit
for our client,
their family, and
the charitable
organization. The
new proposition left
a percentage of
their RRSP to the
charitable
organization through
the will and left
some tax free life
insurance to their
children. The life
insurance premiums
would be at a
sustainable level
even after
retirement. The
result of The
Strategic Tax
Planned Gift process
was that it
uncovered all the
values and goals
that were important
to the client,
ensuring that the
family and the charitable
organization were
looked after. We
allowed their core
values and goals to
drive the solution
that made
sense.
How can you and your
organization escape
the commodity trap?
The focus of The
Strategic Tax
Planned Gift process
is not on the money
but on the values
and goals of your
clients. When a
benefactor`s values
and goals are placed
as a first priority,
wonderful things
happen.
“’It is not good
enough to do good;
one must do it in
the right way.”
(John Morley)
About Tim Chimuk:
Tim Chimuk, DBA, CFP,
TEP has been with
Investors Group for
over 29 years. He
is an acknowledged
expert in
Intergenerational
Estate Planning,
Investment Planning
and Planned Giving.
In addition to
providing trusted
guidance in these
areas, Tim has
dedicated much time
and energy raising
money and awareness
for many charitable
organizations. Tim
is a Board Member at
St. Paul`s High
School, on the
Stewardship
Committee for the
Westwood
Presbyterian Church
as well as the Past
Chairman of the
Planned Giving
Committee for the
CNIB (Canadian
National Institute
for the Blind)