The Legacy Property FundGrowing Conservation Philanthropy
Keystone Conservation TrustMay, 2010
Funding Conservation using the Legacy Property Fund
What: • New pipeline of private sector capital
Why: • Diversify and expand funding • New major gifts tool for you• Tax-advantaged opportunity for your supporters
How:• Tap in to a new asset base for conservation
philanthropy – real estate transactions
The Unrealized Potential of Gifts from Real Estate
Millions of dollars in gifts are achievable
Unlocking the Value in Homes at the Time of Sale
At the time a home is sold, there is an opportunity to create a gift Gifts can be created at no expense to the
seller, or gifts can be enhanced Reduced income taxes and savings on
capital gains taxes produce the gifts Basic transactions yield 3-5% of sales price
Flexibility of the Approach, Some Real Cases
Board member / major donor created single large gift from sale of summer home (second
home) Charitable couple created gifts to multiple conservation organizations from sale of primary residence Individual created multiple gifts from sale of summer residence
How the Program Works IRS sanctioned bargain sale technique
• Donation to KCT at appraised value with a promissory note from KCT at reduced value, creating the charitable gift
• Income tax benefit on gift amount• Reduced capital gains tax
No charge to organization nor donor• KCT retains 2% of sale price when property is sold to
a third party
Two tracks: Examples• Basic transaction (‘no cost’)• Philanthropic transaction (donative intent)
Sharing The Donation Donation split among KCT and other
charities of the donor’s choice Basic (No cost) Gift:
• 50-50 split NGO & KCT (KCT retains minimum 2% of sales price)
Larger gift: • 2% to KCT• Balance to your organization and other
charities of the donor’s choosing
Working Together Proactively communicate the
opportunity Identify potential prospects Test for interest, then, hand it off to KCT KCT handles logistics
Your role is critical to the fundraising outcome
Working with Your Supporters and You
Run customized scenarios• Four inputs: fair market value, basis,
mortgage amount and income tax bracket
Review by supporter and their advisors
Donation agreement• Before signing with buyer!
Donation, resale, and gifts
Who to talk to Piggyback on your existing
development activities Profile of best prospects
• Transition• Downsizing (less need for all
cash from transaction)• High tax bracket• Small or no mortgage on home (equity build
up)• Higher value properties or properties other
than primary residence (second homes)
What’s Next Drawing attention to the opportunity: “Drip” marketing
• Goal: build awareness, acceptance (and funds!)
• On-line on KCT and NGO websites• Print media – brochure, newsletter, targeted
letter to owners of conservation easements• Discussions with your Board, staff, donors,
realtors, financial advisors, attorneys Follow up with more information, as
needed
For additional informationKeystone Conservation Trust336 King of Prussia RoadRadnor, PA 19087
John [email protected]
www.keystoneconservation.org