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Big Money
Even Middle-Class Families Can Leave A Legacy Gift
By: Warren Cole Smith and Rusty Leonard
EP News---
It’s a problem most people will never have, but how it gets solved could affect American life over the next generation.
What do Christian families with BIG money -- $50-million, $100-million, and more – do when they want to give it away?
In the past, foundations and trusts were often the answer. In fact, there are an astonishing 50,000 foundations in the U.S. today. But some Christian philanthropists have grown wary of foundations. They become self-perpetuating, and over time they end up giving money to organizations and causes that the founders would have found abhorrent. One example: Staunch conservative and committed Presbyterian J. Howard Pew supported Billy Graham funded research for a biography of John Calvin. He was also a staunch conservative on economic issues, advocating free-market to social problems. Today, the Pew Charitable Trusts supports policy positions on the environment and other social issues that Pew would likely find objectionable.
That’s why some Christian philanthropists are looking for other ways to give away large chunks of wealth. Peb Jackson has worked in fundraising and development with Focus on the Family, and with the organization Generous Giving, which helps “high capacity” Christian families give away their money strategically and generously. He is currently with Saddleback Church, raising money for Rick Warren’s Global AIDS Initiative. He said, “There is no one formula. All families do it differently. But most people who come into significant wealth, from the sale of a business or other means, usually give to organizations they’ve already had a long relationship with.”
Entrepreneur Dennis Washington and his wife Phyllis, for example, had been long-time supporters of the Christian ministry Young Life. So it was no surprise that the Washingtons would continue to support Young Life. But the magnitude of that support became a significant news event when they gave their Oregon ranch to the ministry. Estimated value of the gift: over $20-million. Jackson said this gift was made possible because Young Life had an ongoing relationship with the Washingtons and the ministry had the capacity to receive such a large gift. “Without lots of care taken by both the donor and the recipient, a large gift can distort an organization,” Jackson said. “Matching the gift with the organization or individual project is critical.”
Generous Giving President Daryl Heald said his own funding comes from the Maclellan Foundation, “so I don’t want to be too hard on foundations.” But he readily acknowledged that the risk of deviating from the original donor’s intent “goes up with each passing generation.” That’s why at a Generous Giving conference you’ll likely hear the old saying: “Do your giving while you’re living, so you’re knowing where it’s going.”
Calvin Edwards is one of a small but growing number of consultants whose sole business is to work with families to come up with prudent plans for giving. He said not everyone has the ability to leave the kind of “legacy gift” the Washingtons left Young Life. But he is seeing a growing number of families who have the ability to leave $100,000 gifts one or more times in a lifetime. In fact, the Center on Wealth and Philanthropy at Boston College estimates that as much as $41-trillion will be transferred to children, charity, or the IRS by the year 2052. The vast majority of that wealth has been accumulated by middle class families who have paid off their homes and accumulated smaller but still significant financial assets. The cumulative philanthropic decisions of these middle class families will almost certainly have a greater impact than the headline-making $100 million gifts – like the one the Rockefellers gave to Harvard on April 25.
So “big money” is a relative term. And Heald says the Bible certainly does not prohibit parents from leaving money to their children, but he says those gifts should not be a disincentive to doing meaningful and fulfilling work. He said his preference – and scriptural counsel -- would not be to hoard money, but to put it to work.
Also, Peb Jackson said, if that $41-trillion is given wisely, “That’s enough money to make the world a different place.”
Leaving A “Legacy Gift”
Even families of relatively modest means can, one or more times in a lifetime, leave a “legacy gift.” A legacy gift is often defined as any gift that will outlive the giver, such as a gift of land, or the establishment or contributions to an endowment fund. If you are considering such a gift, pay attention to the following:
•Have a clear statement of purpose for the use of the money you are giving.
•Make sure the board members of the organization share your views and values.
•Do not be afraid to place restrictions on how the money can be used.
SOURCE: Generous Giving, Calvin Edwards and Company (5/8/2008)
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