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Guidelines for Gift Officers
Gift officers are not Boy Scouts, but the Scouts' motto of Be Prepared fits well in the realm of the gift officer. Below, please find what we're calling guidelines but could just as well be called strategies— tactics for developing a successful gift officer modus operandi.
1. Be in regular contact with your Office of Gift Planning (OGP) or your organization's Philanthropic Advisor (PA).
2. Seldom or never enter into detailed discussions of complex gift arrangements with benefactors without the involvement of the OGP staff or PA.
3. In all major gift situations, insist benefactors to have documentation reviewed by their own professional advisors.
4. With complex gift arrangements (e.g., Charitable Remainder Trusts, apartment building), provide all documentation created by your staff or your vendors directly to the counsel of the benefactor. Many, if not most, of benefactor's legal counsel very infrequently are part of a complex gift whether that be outright or through some type of charitable life-income agreement so offering to assist counsel is appropriate. Your organization may offer to provide DRAFT documents to the benefactor's counsel, but it is not appropriate to provide documents directly to the benefactor. It is best practice for your organization's counsel to review the final documents before your leadership signs off - it is a prerequisite for that to be the case if your organization is accepting any responsibility for administering the gift to benefit the donor. For example, if your organization is going to act as trustee of the trust.
5. While as a gift officer you don't provide tax advice, you nonetheless need to have a baseline of knowledge about income, capital gains, gift, and estate tax laws and regulations.
6. It is wise policy to discourage current gifts—whether outright or life income arrangements—from a small estate when the value of the gift appears to be disproportionate to the total estate. In such instances, encourage a testamentary gift via will or living trust.
7. It's critical to understand the impact inflation in the economy has on life income arrangements—particularly for Charitable Gift Annuities (CGA’s) and Charitable Remainder Annuity Trusts (CRAT’s). Because the annuity payments are fixed when the gift is established, the payments will likely lose purchasing power every year. For this reason, CGA's and CRAT's are considered most appropriate for shorter expected horizons, both in term of years of a CRAT and the life expectancy of either the CRAT or CGA.
8. Be especially cautious when discussing deductions that are “carryovers.” Benefactors need to be encouraged to discuss the issue of carryovers with their tax advisors if the benefactor will be unable to use the full deduction in the year the gift is made.
Click here for a sample Undue Influence contract for gift officers.