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Supporting Philanthropic Dreams:
Working with donors during the largest transfer of wealth in history

By Shawna Hershfield
Communications Director

Bequests are wonderful gifts. Programs, scholarships, buildings, and endowments have all been built by fulfilling donor visions posthumously. Wouldn’t it be better to help your donors realize their greatest legacy wish during their lifetimes? When your donor packages his bequest intention as an income-bearing pledge, both donor and institution can realize goals today for scholarships, research funding, or building endowment.

A gift contract might sound something like this:

Recognizing that the XYZ Charity will rely upon my pledge herein for <<donor’s philanthropic vision>>, I hereby irrevocably pledge to give written amount ($XXXXXXX), during my lifetime or at my death.  Payments made during my lifetime will offset this pledge if designated by me in writing as in satisfaction of the pledge.
 
Attached is a copy of the relevant provision of my will or trust which makes provision for payment of this pledge.  If for any reason this testamentary disposition is not made, or is not effective, said balance shall be an obligation due from me and transferable by my estate at the time of my death.
 
Additional language that can be added or deleted:  During my lifetime I will pay 5% as a cash gift each year to XYZ Charity to be used as income generated on this principal sum covered in this bequest intention.  I have the right anytime to payoff the principal of this bequest intention and eliminate the 5% cash payment. (See explanation).
For example, if a donor wanted to make a $1 million endowment gift, the donor would agree to pay $50,000/year (5%) income for a designated purpose, possibly attached to a naming opportunity.  In this way, XYZ Charity benefits from the current use the endowment will someday provide. The $50,000 does not reduce the $1 million pledge intention. It provides cash flow for current program use and eventually replaces principal needed. 

This is a great opportunity for mid-range donors with dreams of building an endowment. It’s also a creative way for you to show your partnership during a shifting economy. If you’d like to learn more about JBL’s strategies for working with bequest donors, call our offices.

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August 2010:
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