A mid 30's mother of five, had a grandmother with MS, and wants to significantly donate to the National Multiple Sclerosis Society (NMSS). Her and her husband have limited funds to donate as a one-time gift because of obligations to raising their family. What would be an affordable deferred gift that could make a real difference?
What you describe is a prospective donor who is anxious to contribute but lacks significant funds. Presumably, having a relative suffering the ravages of Multiple Sclerosis (MS) has motivated her to want to make an impact.
- Obviously as her children age she can donate time. That is perhaps the most valuable resource. Until she has time for greater involvement, she can participate in organizing events, and so on.
- If she and her husband are young and healthy they can buy an insurance policy that the NMSS owns and is beneficiary of. They can do this extremely inexpensively by using a survivorship or second to die policy to fund the gift. A second to die insurance policy only pays when the last of the couple dies. This will greatly lessen the cost of the coverage. Significantly it will enable them to make a major commitment that they will pay in small increments in future years. This can help them satisfy their personal goals of making a commitment without sacrificing their primary goals of protecting their young children. If there finances are really tight they could discuss ways to structure the policy to minimize contributions in earlier years with their insurance agent.
- They could make a planned gift without using life insurance. For example, they might wish to pledge a larger dollar amount that they commit to pay off over five years. Instead of simply giving the same amount each year, pledge it all up front and make the commitment to pay it. These types of gifts (just like the insurance above) can be used by the charity to "bootstrap" other gifts. The more committed gifts (insurance, planned, etc.) that the charity gets, the more forceful its arguments with other donor's that may have greater financial wherewithal to give big gifts than this young family.
- Make a bequest under their will payable when the last of the couple dies. Again, its not a current outlay which they may not be able to afford today, but its a commitment that bolsters the future of the charity, helps the charity raise more money from other donors, and more. Many charities have designated honor societies for their donor's who make large gifts and/or commitments under their wills. The particular charity you mention, the National Multiple Sclerosis Society, has a honor group called "Pillars". Your prospective young donor might be proud to participate. The more such young (and other) donors that participate in joining this honor society, the easier it will be for the charity to entice other donors.
- The young couple might have family that has greater means and is looking to help the young couple and their charity. In the example you cite, it could be the grandmother or other senior family members. If the senior family members have sufficient wealth, they could use charitable giving techniques that would benefit their heirs and the NMSS as a charity. These techniques become more complex, but in the right circumstances can be a tremendous tax benefit for the family and a boon to NMSS as the charity.
- If the grandmother has a winner in the stock market they could consider giving the highly appreciated stock to NMSS in exchange for a gift annuity. This would give her a charitable income tax deduction in the year of the gift and avoid capital gains taxes. She would also get an annuity paid to her for life which would alleviate some of her financial worries. While this is a plan for the grandmother, If the young couple could help facilitate it they would be helping their grandmother financially while helping the charity. There are lots of indirect ways motivated donors can help charities.