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DirectGiving® is a convenient, efficient and flexible way for
advisors to facilitate charitable gifts through the use of web-based Donor Advised Funds and
Charitable
Gift Annuities.
Donor Advised Funds
This approach allows individual donors to make a gift of appreciated property,
obtain an
immediate tax advantage and still retain the long-term ability to designate
donation
recipients. This is all done without the expense and administrative burden of
establishing
a private foundation. Donors have the ability to allocate investments and
designate
disbursements all on-line, 24 hours a day, 7 days a week.
Charitable Gift Annuities
This approach is analogous to charitable remainder trusts (CRT) without the
associated
administrative burdens of a CRT. A Charitable Gift Annuity allows donors to
make a gift of
appreciated assets, and obtain an immediate tax deduction, while retaining the
right to
receive income in the form of a periodic annuity payment from the foundation.
The remainder
of the gift is passed along to designated donation recipients in much the same
way as a
Donor Advised Fund. Donors have the ability to allocate investments and
designate
disbursements all on-line, 24 hours a day, 7 days a week. DirectGiving® allows
financial
advisors to automate the giving process and to generate substantial revenue
through the
placement of assets in the Charitable Giving Market.
Market Opportunity
The potential market is very large. In 2000 alone, the estimated contributions to charitable
organizations exceeded $203 billion with more than 82% coming from individuals.
Conservative estimates predict that at least $1.7 trillion in charitable assets is expected to be
transferred between generations over the next 20 years, and at least $6 trillion over the
next 50 years, according to Boston College researchers. In surveys done of high net
worth households, nearly 82% indicated a strong interest in doing more financially for the
non-profit community. Donor advised funds are one of the fastest growing trends in
philanthropy in recent years with the number of new funds increasing 33% and asset
values growing 29% in 2000 to $10.2 billion, according to Chronicle of Philanthropy.
This opportunity translates into a significant opportunity for financial service providers
who are looking to provide thier clients with solutions by exposing opportunities for
gathering assets in mutual funds and capturing annuity and life insurance premiums.
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