You May be Gone, but Your Money Lives on Through Planned Giving

Would you like to continue supporting your favorite charity, synagogue or the Jewish Federation’s annual campaign 100 years from now? You can…and here’s how:  Simply add up your annual gifts for the year and multiply by 25. Then, establish a gift for that amount through you will or other planned giving device.

The “multiply by 25” formula will assure an annual charitable gift at the same dollar value you are giving now.  Long after you’re gone – even 100 years from now – your favorite charity will continue to receive an annual gift, provided that you instruct the charity to endow your bequest proceeds.

When you provide instructions to endow a gift, the charity must honor your wishes and keep the gift intact. Your bequest can never be “spent down.” It’s like an artesian well. Because the charity can spend only the fund’s investment earnings, your giving goes on and on, year after year.

Here’s an example of how this works: Sylvia customarily makes a $1,000 annual contribution to ABC Charity. ABC depends on her giving, and Sylvia wonders how it will fare when she’s no longer around to provide a yearly gift.

Sylvia discusses this matter with her attorney, who understands her desire to make a “forever gift.” He prepares a simple codicil to her will that leaves a $25,000 endowed fund for ABC’s benefit.

The first year’s earnings from the bequest will be $1000 (assuming a 4% yield, which is the standard payout used by most foundations). However, the annual gift amount will grow as the endowment appreciates over time. Sylvia is pleased because she knows that money from the endowment fund will be generated every year, just as though she were sending checks herself.

Your planned gift can be tailored for one or more beneficiaries and provide perpetual support for the charities that matter most to you.  You can designate your charities of choice through a simple provision in your will.  There are many ways to make a “forever gift” like Sylvia’s, but bequest provisions are the simplest and most common.

Nationwide 76.3 percent of all charitable gifts are made by living individuals. Bequests account for only 7.5 percent of the combined giving total.  Clearly, Sylvia’s concern about the future-well being of her favorite charity is well founded.

A simple codicil to your will can support your favorite charities for the next century and beyond.  The next time you review your estate plan, think about provisions for your favorite charities, and remember to multiply by 25.

Article appears as originally published in the Ohio Jewish Chronicle, Thursday April 14, 2016.

Jackie Jacobs is the Chief Executive Officer of the Columbus Jewish Foundation, the Central Ohio Jewish community’s planned giving and endowment headquarters.