The Gift of a Lifetime

The recent anonymous million-dollar bequest to Mayhew should inspire all of us who care about the program, regardless of how wealthy we might be, to consider making provisions to support Mayhew through our own estate planning.

I have to admit that talking about end-of-life gifts (also called “planned gifts” or “legacy gifts”) can be awkward, because most of us would rather avoid thinking about our own mortality. That said, as someone who loves Mayhew, and as someone who has made a provision in my own estate planning for Mayhew, I asked to be a guest blogger this month to share my thoughts about how best to leave money to Mayhew and other good causes.

First, let’s agree that those of us who are older think about our financial assets a lot. If we are fortunate enough to have retired comfortably, we hear our financial advisors’ mantra echoing in our heads: “You’ll be fine, so long as you’re careful about your spending. That way, you won’t outlive your assets!” 

And, so, yes, we fear outliving our assets, even when the size of our retirement savings provides a very handsome cushion. And this understandable preoccupation sometimes keeps us from donating to charitable causes as generously as we’d like. But our estate plans are explicitly for when we’re gone, and no longer in need of those assets. Estate planning therefore provides a different and remarkable opportunity for philanthropy.

So please consider any of the following approaches to your estate planning:

• In your will or trust, designate Mayhew to receive a percentage of your estate. You can fulfill your commitment to your heirs and still carve out something for Mayhew and other charitable causes you care about. Or you can make specific designations to your heirs and then divide what’s left among the charitable causes you care about.

• Designate Mayhew as the full or partial beneficiary of one or more of your IRAs or other retirement accounts. This approach has the benefit of simplicity. Though you should always consult with your professional advisors on such matters, designating a charitable beneficiary from your retirement fund does not require redrawing your will: You can simply tell the custodian of your retirement funds – that is, the company that manages your retirement investments – of your charitable intention. (This is what I did: I designated Mayhew as a beneficiary of one of my IRAs. It only took about five minutes to do that online.)

  
  

An added benefit of designating Mayhew or other charitable organizations as a beneficiary of your retirement funds is that, unlike your heirs, Mayhew would not have to pay income taxes upon receiving the funds. That is, your kids would be responsible for paying income taxes as they make withdrawals from a retirement fund you leave them. Not so Mayhew, which, as a nonprofit organization, does not pay taxes. I am not offering legal or investment advice in this post, but if you speak with your advisors, you’ll no doubt learn about the advantages of leaving your retirement fund assets to charity, while leaving your real estate, regular investment accounts, and other assets to your heirs.

• Designate Mayhew or other charities to receive the principal of your donor-advised fund. Donor-advised funds, or DAFs, have become hugely popular in recent years. They provide a lot of benefits to the donors. But I would argue (and I often do) that a DAF has served its purpose by the end of the donor’s life. Rather than naming family members as “successor advisors,” or turning the assets over to the sponsoring organization (usually an entity associated with the financial services industry or a community foundation) for their discretionary grantmaking, you can use all of those assets for good by directing your DAF sponsor to distribute the principal of what remains in your donor-advised fund to one or more charitable organizations.

I hope this gives you fuel for thought. And, while thinking about our mortality isn’t a fun topic, thinking about the impact you would be making on Mayhew and the boys it serves should cause you to smile.

Alan Cantor, Mayhew Trustee Emeritus and former Executive Director, is the principal of Alan Cantor Consulting LLC, which works with small nonprofits in the areas of development, governance, and strategy.

Alan Cantor, Mayhew Trustee Emeritus and former Executive Director