Tips for Navigating Planning and Giving in Uncertain Times

Empty streets in normally bustling cities tell the story. The country is basically on lockdown as it tries to slow and deal with the spread of the coronavirus. March madness became March sadness, schools are temporarily closed, and people are working from home. Stocks have suffered their greatest losses since 2008.

Many of you who are affected by these events are donors to our organization, and you may be wondering about the impact on the gifts you have arranged or may be considering.

If you have questions regarding any fund you have established in support of our mission or about any gift plan that pays income to you, please contact us. We are ready to help you and provide whatever information you seek.

In general, we would encourage you to take the following actions:

  1. Review, and possibly update, your estate and financial plan with your advisors. If there has been a substantial change in the value of your estate, you may wish to change the provisions in your will or living trust so that you still realize the objectives for your loved ones and charitable organizations. This could also be a time to review the beneficiary designations of your retirement funds and life insurance policies to see that they still reflect your wishes.

  2. Remember that economic downturns, while temporarily painful, can also present opportunities. On March 6, 2009, the Dow Jones reached a low of 6,470, having lost 54% of its value since October 9, 2007. By February 12, 2020, the Dow Jones had climbed all the way to 29,551 (4½ times its 2009 low point). In the third week of March 2020, it dropped below 20,000, about one-third below its high point. As these numbers indicate, many who invested or simply retained investments during a down market have done well. Thus, while a loss of net worth may be an occasion to review your estate and financial plans, it is also important not to overreact.

  3. Choose a charitable plan that makes sense in your current situation. Having experienced the volatility of financial markets, some individuals are hesitant to make an irrevocable commitment of their capital. You may be more comfortable with a gift arrangement that allows you to change your mind. That is why you may choose to include a bequest to our organization or name us as beneficiary of some portion of your remaining retirement funds. Later, if your position becomes more ensured, you might make a current gift where you can see it in action.

    Other individuals might be willing to commit capital if they can preserve or increase their level of income. That is possible with a charitable remainder trust. It can be structured to either pay you a fixed amount or a percentage of trust assets (for life or a term of years). If you fund such a trust with securities that have recently suffered losses and those securities recover much of their value, the capital gain would not be taxed if the trust sells them because the trust is tax-exempt. In many cases, the trust payments will be larger than the dividends or interest that you were receiving. You will be allowed a charitable deduction for the present value of the remaining trust assets that will eventually be distributed to our organization.

    Another instrument that can be very appealing when interest rates are low and stock values are volatile is the gift annuity. It pays a fixed amount for life that is not dependent on stock values or interest rates. Older individuals who are looking for security find a gift annuity especially appealing. It also generates a charitable deduction.

We so appreciate your generosity and that of all of our loyal donors—particularly in uncertain times, for that is when we most need money to continue our mission. Thank you for your gifts of whatever kind during these unprecedented times. We want to partner with you in advancing our mission in a way that works for you.


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