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SAFE HARBOR LEADERSHIP CONFERENCE

SAFE HARBOR LEADERSHIP CONFERENCE. LEGACY ENDOWMENT BUILDILNG. SAFE HARBOR LEADERSHIP CONFERNCE PRESENTATION OBJECTIVES.

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SAFE HARBOR LEADERSHIP CONFERENCE

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  1. SAFE HARBOR LEADERSHIP CONFERENCE LEGACY ENDOWMENT BUILDILNG

  2. SAFE HARBOR LEADERSHIP CONFERNCE PRESENTATION OBJECTIVES Today I will attempt to share with the Conference how your congregations can benefit from developing and funding endowments. This will be a three-pronged presentation featuring discussions on the following: • The pending African American Wealth Transfer • The use of estate planning to generate planned gifts to your churches • Establishing and utilizing endowments to begin to fund scholarships, missions ministries, staff cost, etc.

  3. WEALTH AND AFRICAN AMERICANS WEALTH GROWS FROM: • NET SAVINGS OUT OF HOUSEHOLD INCOME • APPRECIATION OF ASSETS • NET FINANCIAL TRANSFERS TO THE HOUSEHOLD “Wealth Transfer Estimates for African American Households” John J. Hayes and Paul G. Schervish 2005

  4. WEALTH TRANSFER STUDY The initial study of the pending wealth transfer was first researched and distributed at Boston College by two professors in 1999. Their estimates projected over the next 55 years WWII two era Americans would begin to transfer huge sums of wealth to the baby boomer generations. The estimate for the wealth transfer was a conservative $46.3 to $153.7 trillion (2003 dollars). “Wealth Transfer Estimates for African American Households” John J. Havens and Paul G. Schervish 2005

  5. AFRICAN AMERICAN FACTOR IN WEALTH TRANSFER Just released is perhaps the most empirical information I have seen in my 15+ years in fundraising. These same researchers looked at African Americans on the same grid and have published what is expected to derive from African Americans during this same 55 year period. The African American component of the wealth transfer is estimated to be anywhere from $1.1 Trillion to $3.4 Trillion in assets changing hands within African American families and most importantly the charities they support including the Church. “Wealth Transfer Estimates for African American Households” John J. Havens and Paul G. Schervish 2005

  6. SAFE HARBOR LEADERSHIP CONFERENCE The relative scarcity of wealth among African American households places a special emphasis among African American wealth holders to allocate their financial resources wisely in their lifetime financial planning. Moreover, it places an equal burden on the charitable organizations that receive charitable bequest from these household to honor their gifts by using them wisely, efficiently, and effectively. “Wealth Transfer Estimates for African American Households” John J. Havens and Paul G. Schervish 2005

  7. What Do People Own?

  8. SAFE HARBOR LEADERSHIP CONFERNCE WHY A LEGACY ENDOWMENT PROGRAM? WHY NOW? WHY THE CHURCH?

  9. BIBLICAL PRINCIPAL FOR A LEGACY ENDOWMENT PROGRAM A good man leaveth an inheritance to his children’s children; and the wealth of the sinner is laid up for the just. Proverbs 13:22

  10. Donors should be proactive in the planning process in choosing which assets to gift. Charitable organizations, especially churches must learn how to encourage donors to keep the fruit and give away the tree.

  11. WHAT IS A PLANNED GIFT? A gift of assets transferred at a time in the future These gifts can be revocable (changeable) or irrevocable (unchangeable) Usually the largest gift a donor is capable of making These gifts come to organizations generally at a donor’s death

  12. PLANNED GIVING’S GROWTH TRENDS INCLUDE: Growth in high-income and high net-worth households Increased interest among population in financial and estate planning Increased range of options for giving More frequent appeals to participate in planned giving by financial and development professionals Growth has also come as a result of the emergence of a broader, more inclusive concert of planned giving as a form of giving

  13. TYPES OF PLANNED GIFT VEHICLES • Bequest in a Last Will and Testament • Gifts of Life Insurance • Gifts of Retirement Plans(401K,403B,IRAs,KEOGH,etc.) • Real property (homes, boats, land, commercial holdings) • Charitable Gift Annuity • Charitable Trusts

  14. ENDOWMENTS An endowment is a group of funds that have been donated to a tax-exempt organization so that the earnings on the funds can be used to advance its charitable, religious, or educational mission as long as the organization exists. It allows donors to transfer private wealth to the ongoing support of public purposes.

  15. ENDOWMENTS ALSO… • Provides stability- since the principal is not spent, an endowment generates earnings year after year through prudent investment management • Provides flexibility- lessens pressure on church’s budget for ministry costs • Guarantees long-term relationship- between donor and an institution. An endowment keeps giving over time, and encourages a continuing interest on the part of the donor and or family members

  16. HOW IS AN ENDOWMENT CREATED An endowment typically includes funds donors have stipulated the income, but not the principal, may be spent. In many cases, the way the income may be spent is also restricted by the donor. If so, the institution must spend the income for those purposes to be served by the income at the discretion of the institution. Even in these cases, however, the institution can spend only income, not principal.

  17. HOW AN ENDOWMENT WORKS

  18. Q&A CONTACT INFORMATION DARREL GIBSON 614 316-0501 E-MAIL:SUCCESS@NORTHSTARSP.COM WWW.NORTHSTARSP.COM

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