July 28, 2017 Planned Giving – 3 Things Nonprofits Need To Know
Hopefully, as a 501 (c) 3 organization, your nonprofit has included planned giving in your fundraising model.
Planned giving can be facilitated in a variety of ways. Nonprofits can benefit from life insurance policies or donations of assets or real estate upon a benefactor’s death.
Ok, so your charity has been remembered in someone’s estate. Now what?
Straight cash or funds from a life insurance policy is easy enough to put to work for a nonprofit. However, other assets can actually cost a nonprofit money once accepted. One such example is real estate – there are property taxes, maintenance and upkeep, association dues, etc. To avoid this predicament, you need to turn the assets into cash as quickly as possible. How do you do that?
Personal property assets like art, automobiles, gold and jewelry are not as difficult to sell as real estate, in most instances. Because real estate can be complicated, let’s explore some options there.
First, you’ll want to make sure the deed to any real estate is properly transferred to your nonprofit. The state you are located in will determine the type of deed needed. Contact your attorney for direction here. You must have a deed before you can sell the property.
Next up, have an appraisal conducted for property. An appraisal will serve the purpose of giving you an idea of the value of the donation. Talk with your tax accountant for further guidance here.
Now you are ready to sell the property. What are your options?
You can list the real estate with a Realtor who can post the property to the MLS system, which will get the word out to other agents and the general public via the internet. Often, with a traditional real estate listing like this, an offer from a buyer might have contingencies which can delay closing, thereby incurring additional costs to the nonprofit.
My recommendation? As a real estate broker and auctioneer, I suggest you list the property with an auction company. I recommend this method for various reasons.
Because time is usually of concern in these situations, selling a property via the auction method is optimum because it can be listed, sold and closed on most of the time in 60 to 90 days. An auction company would provide an extensive marketing campaign to make the public aware of the auction. Then on the scheduled day the property would be auctioned for sale, with the closing taking place in 30 days or LESS. An added bonus is that there are no contingencies when a property is sold at auction, meaning there is nothing to delay the closing, thereby avoiding any added expense to the nonprofit.
Turning those estate-provided assets and real property into cash is a priority for nonprofits. If you have real estate or other assets that have been donated to your organization, please contact us and we can help you turn that wonderful planned giving donation into CASH!
Make every minute a revenue generating minute!
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