Transfer Fee Charitable Giving Program And Fund Raising/Fund Development Methodology

Transfer Fee Charitable Giving Program and Fund Raising/Fund Development Methodology

1. New Innovations In New Innovations In
Fund Development Fund Development
and Fundraising and Fundraising
Presented by Gail M. Sudore, C.F.R.E.Presented by Gail M. Sudore, C.F.R.E.
Association of Fundraising ProfessionalsAssociation of Fundraising Professionals
International ConferenceInternational Conference
San Diego, CaliforniaSan Diego, California
March 30-April 2, 2008March 30-April 2, 2008

2. Court Judgement Awards Court Judgement Awards
ProgramProgram
An Innovative Resource/Fund An Innovative Resource/Fund
Development MethodologyDevelopment Methodology

3. WHEN A FINE OR ASSESSMENT IS MADE IN THE WHEN A FINE OR ASSESSMENT IS MADE IN THE
DISPOSITION OF DISPOSITION OF
A COURT CASEA COURT CASE
A JUDGE MAKES AN INDIVIDUAL DETERMINATION A JUDGE MAKES AN INDIVIDUAL DETERMINATION
AS TO WHERE THEAS TO WHERE THE
FINE/ASSESSMENT IS ALLOCATED; OFTEN FINE/ASSESSMENT IS ALLOCATED; OFTEN
JUDGEMENT AWARDS ARE ALLOCATED TO A JUDGEMENT AWARDS ARE ALLOCATED TO A
NONPROFIT ORGANIZATION(S)NONPROFIT ORGANIZATION(S)
(USUALLY THE MOST VISABLE AND WELL KNOWN)(USUALLY THE MOST VISABLE AND WELL KNOWN)
THE “GARBAGE BARGE” & THE AMERICAN RED CROSSTHE “GARBAGE BARGE” & THE AMERICAN RED CROSS

4. THE COURT JUDGEMENT AWARDS PROGRAM IS THE COURT JUDGEMENT AWARDS PROGRAM IS
A PRE-DETERMINEDA PRE-DETERMINED
ALLOCATION ARRANGEMENT, ALLOCATION ARRANGEMENT,
WHEREBY WHEREBY
•A JUDGE ON AN INDIVIDUAL BASISA JUDGE ON AN INDIVIDUAL BASIS
OROR
•ALL JUDGES ON A CIRCUIT COURT WIDE ALL JUDGES ON A CIRCUIT COURT WIDE
BASISBASIS
ALLOCATE THE FINE/ASSESSMENT(S) TO A ALLOCATE THE FINE/ASSESSMENT(S) TO A
NONPROFIT ORGANIZATION(S) WHOSE NONPROFIT ORGANIZATION(S) WHOSE
MISSION IS RELEVANT TO THE MISSION IS RELEVANT TO THE
TYPE OF CASE TYPE OF CASE

5. TRANSFER FEE TRANSFER FEE
CHARITABLE GIFT PROGRAMCHARITABLE GIFT PROGRAM
©®©®

An Extraordinarily Innovative Resource/An Extraordinarily Innovative Resource/
Fund Development Methodology that has the Fund Development Methodology that has the
Potential to Revolutionize Potential to Revolutionize
Fundraising and Planned Giving Fundraising and Planned Giving

6. The Transfer Fee Charitable Giving Program The Transfer Fee Charitable Giving Program
began as a way to raise large amounts of money began as a way to raise large amounts of money
in a relatively short period of time;in a relatively short period of time;
the program was first implemented in the program was first implemented in
South Carolina to build an environmental South Carolina to build an environmental
education center and then in Wyoming, education center and then in Wyoming,
Pennsylvania and Florida to fund land Pennsylvania and Florida to fund land
acquisitions for conservation purposes acquisitions for conservation purposes

7. $600.6 Billion in Charitable Contributions $600.6 Billion in Charitable Contributions
were given in the USA in 2008 from were given in the USA in 2008 from
foundations, corporations and individualsfoundations, corporations and individuals
The largest gifts made by individuals came from The largest gifts made by individuals came from
individuals with annual incomes over $250,000; individuals with annual incomes over $250,000;
776,250 households/1.7% of USA’s population776,250 households/1.7% of USA’s population
$40,956 median household income in USA;$40,956 median household income in USA;
80.2% of households in USA have income of 80.2% of households in USA have income of
less than $50,000less than $50,000
*Source: Grantmakers Forum ‘State of Philanthropy 2008” Report and 2000 U.S. Census*Source: Grantmakers Forum ‘State of Philanthropy 2008” Report and 2000 U.S. Census

8. Example:Example:
There are 26,411,239 acres of land in There are 26,411,239 acres of land in
the State of Ohiothe State of Ohio
The taxable value of Ohio’s real property is The taxable value of Ohio’s real property is
$173,718,291,865 billion$173,718,291,865 billion
Over the next two to twenty years millionsOver the next two to twenty years millions
and millions of acres in Ohio and millions of acres in Ohio
are going to change handsare going to change hands
*Source U.S. Soil Conservation Service*Source U.S. Soil Conservation Service

9. The Transfer Fee Program is a process The Transfer Fee Program is a process
of raising money based on the sale- or transfer- of raising money based on the sale- or transfer-
of a valuable asset of a valuable asset
(such as a house/condo, lot/parcel of land, boat/yacht, vehicle, (such as a house/condo, lot/parcel of land, boat/yacht, vehicle,
securities, art, jewelry, antiques/collectables, etc.)securities, art, jewelry, antiques/collectables, etc.)
Unlike the traditional fundraising scenarios where the Unlike the traditional fundraising scenarios where the
donor contributes the asset at its fair market value to donor contributes the asset at its fair market value to
charity and simply gets a tax benefit,charity and simply gets a tax benefit,
in a transfer fee arrangement in a transfer fee arrangement
The donor reaps the benefit from the proceeds of the sale The donor reaps the benefit from the proceeds of the sale
of the asset of the asset AND AND the tax benefits fromthe tax benefits from
a charitable contributiona charitable contribution

10. •Voluntary contractual agreement between the donor Voluntary contractual agreement between the donor
and the charitable organization (no statutory/regulatory and the charitable organization (no statutory/regulatory
approval is required)approval is required)
•Terms of the agreement are negotiated based on the Terms of the agreement are negotiated based on the
interests, desired goals, value of asset, and the tax interests, desired goals, value of asset, and the tax
considerations of the donorconsiderations of the donor
-Length of the agreement-Length of the agreement
(one time or for a period of years) (one time or for a period of years)
-Recorded Instrument (covenant on deed/title) -Recorded Instrument (covenant on deed/title)
-Charitable gift to come from seller’s -Charitable gift to come from seller’s
proceeds or buyers price/cost (the donor proceeds or buyers price/cost (the donor
decides) decides)

11. -Donor decides the percentage (transfer fee) -Donor decides the percentage (transfer fee)

contributed to the charitycontributed to the charity
During calendar year 2009 1/7 of 1%During calendar year 2009 1/7 of 1%
During calendar year 2010 2/7 of 1%During calendar year 2010 2/7 of 1%
During calendar year 2011 3/7 of 1%During calendar year 2011 3/7 of 1%
During Calendar year 2012 4/7 of 1%During Calendar year 2012 4/7 of 1%
During Calendar year 2013 6/7 of 1%During Calendar year 2013 6/7 of 1%
On or after January 1, 2014 1% On or after January 1, 2014 1%
Transfer Fee donations can be made by Transfer Fee donations can be made by
individuals, home owners associations, individuals, home owners associations,
corporations/business owners, developers, etc. corporations/business owners, developers, etc.

12. •The terms of the agreement are incorporated into the The terms of the agreement are incorporated into the
covenants, conditions and restrictions of the deed and covenants, conditions and restrictions of the deed and
recorded in the County Clerk’s officerecorded in the County Clerk’s office
•The transfer fee is collected at the closing of the sale by The transfer fee is collected at the closing of the sale by
the title company (or other legally recognized the title company (or other legally recognized
transaction agent) from the seller (or the buyer) transaction agent) from the seller (or the buyer)
of the asset and paid to the charitable organizationof the asset and paid to the charitable organization
•The fee is based on a percentage of the sale price on a The fee is based on a percentage of the sale price on a
one-time basis or over a period of time specified; the one-time basis or over a period of time specified; the
fee can be at a fixed rate or an incremental rate for the fee can be at a fixed rate or an incremental rate for the
term of the agreement term of the agreement

13. Tax Benefits/ConsiderationsTax Benefits/Considerations
Income Tax Deduction/CreditIncome Tax Deduction/Credit
•Accelerated Income Tax benefits from Gifts Accelerated Income Tax benefits from Gifts
on Basis (I.R.S. 50% rule) on Basis (I.R.S. 50% rule)
•Income Tax Deduction for Partial Gift (Bargain Sale)Income Tax Deduction for Partial Gift (Bargain Sale)
•Reduction of Tax Obligation or Deferred Tax Reduction of Tax Obligation or Deferred Tax
Treatment (Capital Gains or Ordinary Income)Treatment (Capital Gains or Ordinary Income)
•Estate Tax BenefitsEstate Tax Benefits
•Phasing of Charitable GiftsPhasing of Charitable Gifts
•Carry over tax benefit (similar to a gift of a Carry over tax benefit (similar to a gift of a
conservation easement) 5 years; I.R.S. 30% rule) conservation easement) 5 years; I.R.S. 30% rule)

14. A TRANSFER FEE PROGRAMA TRANSFER FEE PROGRAM
ENABLES THE DONOR TO ENABLES THE DONOR TO
MAKE A MUCH LARGER MAKE A MUCH LARGER
GIFT OR GIVE MORE GIFT OR GIVE MORE
OFTEN THAN THEY MAY OFTEN THAN THEY MAY
OTHERWISE BE ABLEOTHERWISE BE ABLE

15. To Implement the Program:To Implement the Program:
•Negotiation SkillsNegotiation Skills
•Knowledge of the Federal Tax Code/IRS Knowledge of the Federal Tax Code/IRS
requirements, applicability and benefits requirements, applicability and benefits
•An understanding of the donor’s interests and An understanding of the donor’s interests and
goals/desired outcomes for the proceeds from goals/desired outcomes for the proceeds from
the sale of their asset the sale of their asset
•Knowledge of cause-related marketing Knowledge of cause-related marketing
motivations and benefitsmotivations and benefits
•Legal counselLegal counsel

16. As with any planned giving program,As with any planned giving program,
the donor should be encouraged to seek advice the donor should be encouraged to seek advice
from their own legal and financial advisorsfrom their own legal and financial advisors
and the transfer fee agreement should be and the transfer fee agreement should be
negotiated via and/or reviewed by both parties negotiated via and/or reviewed by both parties
legal counsel, as it is a legal contractlegal counsel, as it is a legal contract

17. Testimonials from Transfer Fee Program ParticipantsTestimonials from Transfer Fee Program Participants
““I established a covenant on the single family lots I owned to permanently I established a covenant on the single family lots I owned to permanently
endow the Land Trust. This method (of charitable giving) should be a model endow the Land Trust. This method (of charitable giving) should be a model
for other landowners.”for other landowners.”
-Stanley Resor, Owner of Snake River Ranch -Stanley Resor, Owner of Snake River Ranch
““The private transfer fee which was implemented by the homeowners association The private transfer fee which was implemented by the homeowners association
has had no impact on the sale of these lots and homes. None of the buyers has had no impact on the sale of these lots and homes. None of the buyers
‘batted an eye’ when the transfer fee was mentioned.”‘batted an eye’ when the transfer fee was mentioned.”
-Mercedes Huff, Owner/Associate Broker-Mercedes Huff, Owner/Associate Broker
Jackson Hole Realty Jackson Hole Realty
““Whenever my firm closes on the sale of a property, it is our responsibility to Whenever my firm closes on the sale of a property, it is our responsibility to
debit the seller at closing for the contribution to the Land Trust Network. debit the seller at closing for the contribution to the Land Trust Network.
This is practically effortless on our part.”This is practically effortless on our part.”
-Joaquin Hanson, President-Joaquin Hanson, President
Jackson Hole Title and Escrow Jackson Hole Title and Escrow

18. The Transfer Fee Charitable Gift Program is a The Transfer Fee Charitable Gift Program is a
copyrighted and patented program developed by copyrighted and patented program developed by
Gail M. Sudore, C.F.R.E. Gail M. Sudore, C.F.R.E.
Copyrighted and patented 2001Copyrighted and patented 2001
All rights reservedAll rights reserved
For further information on the program and/or to obtain For further information on the program and/or to obtain
permission to use the program and a licensing fee permission to use the program and a licensing fee
schedule/agreement,schedule/agreement,
Contact Ms. Sudore at c/o 61 Liberty Street, Dansville Contact Ms. Sudore at c/o 61 Liberty Street, Dansville
NY 14437; Tel: [phone]; NY 14437; Tel: [phone];
E-Mail: [email protected] E-Mail: [email protected]