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Commentary on ECFA Standard 7.6
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Fund-Raising -- Financial Advice

"The representative of the member, when dealing with persons regarding commitments on major estate assets, must seek to guide and advise donors so they have adequately considered the broad interests of the family and the various ministries they are currently supporting before they make a final decision. Donors should be encouraged to use the services of their attorneys, accountants, or other professional advisors."

The purpose of this Standard is to provide guidance to members that offer assistance with deferred gifts (in contrast to current gifts) or estate planning. This includes any form of irrevocable giving that is likely to deplete the donor’s estate, including outright gifts, gift annuities, deferred gift annuities, charitable remainder unitrusts and annuity trusts, and pooled income funds. It may also include endowments, gifts of life insurance, bequests under the will, or other forms of testamentary device.

Considering the broad interests of the donor and the donor’s family.  A simple outline will enable the representative to take stock of the donor's needs and interests:

Persons:  
For whom (including ministries) is the donor concerned?  What are the donor's objectives for each of these persons?
Property:
 
What assets constitute the donor’s estate?  These would include property, life insurance, pension and retirement benefits, and expectancies (i.e., amounts the donor may reasonably be assured of receiving at some point in the future).
Plan:
 
What are the various means available to enable the donor to use property to meet the objectives?  What are the advantages and disadvantages of each option to the donor
Planners:  
 
What professional advisors (e.g., attorney, accountant, trust officer) should be brought in to assist the donor in implementing the plan?

The role of the donor’s professional advisors. The member's development representative should determine if the donor has sufficient confidence in professional advisors to seek an appointment, or if the donor’s objectives can be expedited if the representative accompanies the donor. Occasionally the representative may want to call on the professional advisors first to assure them that the organization has the donor’s best interests and desires at heart.

If the donor does not have professional advisors, the member's representative may suggest the names of several competent professionals.

Preparing financial or estate planning documents for a donor. The organization may use standard forms of agreements drawn up by an attorney; however, donors should be urged to have the documents reviewed by their own counsel.

As a general rule, the charity’s attorney will not draft wills lest the will be contested on the grounds of undue influence.
 
 


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