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Giving USA 2016, Giving by Bequest Highlights - Estate Planning and Administration News

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Estate Planning and Administration News

Posted on: Apr 12, 2017

Giving USA 2016, Giving by Bequest Highlights
By: Mary Stanley, Central Indiana Community Foundation

Although I love to hang out with estate planning lawyers, I don’t even play one on TV!  As a partner at Faegre Baker Daniels, I practiced utility law, but for the past nine years I have had the privilege of working as a charitable gift planner for Central Indiana Community Foundation. 

Therefore, for this post, I thought I would highlight some interesting, objective facts about charitable bequests included in the most recent Giving USA 2016: Annual Report on Philanthropy, researched and written by IU Lilly Family School of Philanthropy (“Giving USA 2016”). My purpose in doing so is to illustrate, as Giving USA 2016 concludes, that “Despite recent estate tax law changes, there appears to have been no measured change in the percentage of estates that have left a bequest in recent years.” (Giving USA 2016, p. 99). Indeed, giving by bequest increased 25.8% in inflation-adjusted dollars between 2013 and 2014, and again by 1.9 % in inflation-adjusted dollars between 2014 and 2015, for a cumulative increase in inflation-adjusted giving by bequest between 2013 and 2015 of 28.2% (p. 33).  

In another section of the annual report, Giving USA 2016 notes that charitable giving through bequests has not realized any declines between any five year periods in the last forty years (p. 44). Point being: just because your clients may no longer save on estate taxes by giving to charity does not mean their interest in doing so has decreased. And there are of course many other studies that back this up. In fact, with less of their estates going to taxes, and assuming heirs are sufficiently provided for, even more may be available for your clients’ charitable legacies.

I assumed that my post would end with the conclusion of the above paragraph, but in re-reading the report, an important fact caught my eye for the first time in the section entitled, “Large Bequests Announced in 2015.” This section notes that the Chronicle of Philanthropy lists the top 50 donors who provide the largest gifts and pledges in its “Philanthropy 50 list” and that the TOP TWO donors on the 2015 list gave by bequest. Of those bequests, the second bequest resulted in SIGNIFICANT charitable funds going to a named fund at the decedent’s local community foundation. (Not only had I previously missed this, but it caused my objective pen to curve slightly towards the subjective.) “The estate of John Santikos … included $605 million in charitable bequests, most notably to the John L. Santikos Charitable Foundation at the San Antonio Area Foundation.” (Giving USA 2016, p. 101).

From a look at the San Antonio Area Foundation’s website, one can see that the Foundation has been hard at work fulfilling Mr. Santikos’ charitable legacy. Among the 141 grants that it made to 113 nonprofits whose missions aligned with Mr. Santikos’ personal philanthropic passions in just the first year following his death, several recipients honored him with naming rights (presumably at his direction, whereas anonymity may be important to others). For example, with the Community Foundation’s guidance and approval, the Southwest School of Art named their Navaro campus building the John L. Santikos Building, after receiving $1.5 million from the John L. Santikos Charitable Foundation, a fund of the San Antonio Area Foundation.

Most community foundations offer designated and field of interest funds that can be set up in advance of death and funded through estate plans to ensure donor intent. That these types of funds hit the top of the Philanthropy 50 list and I missed it last year, well… (1) Where have I been --I am thankful for this opportunity to revisit Giving USA 2016 in more depth as I know the Giving USA reports are always full of great information; and (2) (shameless plug…) When and if your clients have charitable legacy goals that transcend a single charity or you think should involve some oversight, involve your local community foundation. The call and analyses are always free and community foundations are always happy to help.


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