Now and forever.
That is the message Nancy Kohn Rabin, chair of The Associated: Jewish Community Federation of Baltimore, delivered about the importance of making a legacy gift.
“If we want to sustain our Jewish community, there is no question people have to endow their gifts,” Rabin said. “The Talmud says, ‘Just as my ancestors planted for me, so I will plant for my children.’ Children here means more than my personal children, it means the Jewish community.”
How does it work? What is a legacy gift?
According to Michael Friedman, senior vice president of Planned Giving & Endowment at The Associated, a legacy gift is any gift a person leaves to an heir or to a charity that is intended to have a lasting impact. An endowment is a type of legacy gift.
“The easiest way to describe an endowment is [that it’s] a gift that keeps on giving. The gift is invested and then an amount is spent each year from the endowment to support the program, project or organization that the donor has designated,” said Friedman. “Managed properly, the gift — and more importantly, the services and benefits — can go on forever.”
The Associated is seeing that statement in action. The federation manages $650 million in endowment and foundation assets that support the programs and services of its agencies. Also included in that total are the assets of virtually every synagogue and day school in Baltimore that has an endowment, as well as several other federations’ endowment assets. Through its Consolidated Investment Fund and a lay committee that oversees it, it has outperformed every Jewish federation in North America and has performed better than the top 10 percent of all endowment funds managed by any nonprofit.
That’s good news for an organization like The Associated. Last year, 20 percent of the organization’s annual campaign, said Friedman, was paid from philanthropic funds and supporting foundation grants. Moreover, more than $4 million in revenue is realized from other unrestricted and designated endowments for Associated programs and agencies.
“That’s $4 million in additional revenue over and above what we raise for the annual campaign,” he said.
At Beth Tfiloh, Ricka Neuman chairs the synagogue/school’s endowment efforts. She said she decided to work with the program in order to ensure “a strong and enduring Beth Tfiloh.”
Neuman cited the recent 2010 Greater Baltimore Jewish Community Study as underscoring the importance of legacy gifts. She said that as young people grow more disconnected and give less to solely Jewish causes, “these funds will be needed 20-30 years down the road — this is how [BT] is going to be able to provide for its community.”
Neuman has made her own legacy gift in her father’s name.
“At some point, four or five years ago, I was sitting in a meeting and the importance of kiddushes after service was talked about — the importance of people being able to stand around and talk, catch up and really just give a sense of community [to the shul],” said Neuman. “I ended up talking to my family, and we started a kiddush fund — and we committed to endow it so that there can be kiddushes for as long as there needs to be kiddushes.”
Neuman said that when she app-roaches a potential donor, she asks him or her, “What do you want your legacy to be? ... Is there something you are passionate about?”
There are many ways that one can leave a legacy gift, and people are jumping on the bandwagon. At BT, more than 75 people have committed to legacy gifts.
“Endowment gifts come in all shapes and sizes. Many we know about in advance. Some we do not,” said Friedman.
Friedman told a story from when he first started at The Associated: “I got a call from a lawyer telling me to come to the cemetery that afternoon for the funeral of a 101-year-old woman who was leaving her estate to The Associated. She never gave more than $100 a year to us when she was alive. Imagine my surprise when we learned she was leaving us $2 million. Now, each and every year we draw more than $100,000 to help continue to innovate and sustain our community.”
U.S. Giving Trends
In 2011, where did the money come from? Where did it go?
Total charitable giving: $298 billion (up about $12 billion from 2010)
Total giving by private, community and operating foundations: $41.7 billion
Donations by corporations and corporate foundations: $14.6 billion
Bequests: $24.4 billion (an increase of 9 percent from 2010)
Source: Giving USA
Make A Gift For The Future
Ways to leave a legacy
Make a Bequest in Your Will: A simple bequest in your will designated to a charity is the most common technique for leaving your legacy.
Use Life Insurance: A gift of a life insurance policy is particularly appealing for younger individuals because of its reasonable cost and tax benefit. When charity is the owner and beneficiary of the policy, the premium payments that you make are tax deductible. If you have an older policy that you no longer need for your family’s protection, you may be able to contribute that policy and realize a tax benefit.
Name a Charity as the Beneficiary of Your IRA or Retirement Plan: Your IRA or retirement plan can be subject to high estate and income taxes, leaving precious few dollars for your heirs. When planning your legacy for charity, always consider using these assets first. The more you can save on your tax bill, the more that your heirs will stand to inherit from you.
Establish a Charitable Income Plan: A charitable remainder trust or charitable gift annuity provides you or a loved one with needed current income while providing a legacy for charity after your lifetime. Important tax benefits and possible increased income are available.
Create Your Legacy Today With an Outright Gift of Cash, Stock or Other Property: Take advantage of immediate income tax benefits, and create your legacy during your lifetime. Your favorite charity will work with you to identify the most tax-efficient way to establish your legacy right away.
Source: The Associated: Jewish Community Federation of Baltimore