This eighth
article in the series on real estate gifting covers information on donors,
charitable organizations, and resources for further education for CCIMs and
others interested in the charitable donation process.
Commercial real estate
professionals and their clients should consider all options when discussing the
charitable donation of real property. Real Estate Gifting Realized, a program
through the CCIM Foundation, facilitates the donation of real estate to
charitable organizations. A donation may be made directly to the CCIM
Foundation or the Foundation can assist with the donation to a chosen charity.
Donors
The interest from donors may be from
either individuals or corporations, so it’s important to understand the donor’s
objective.
For an individual, the objective
can be a
- philanthropic
intent,
- desire to use
and qualify an appreciated asset as a charitable donation for tax deduction
purposes,
- need to
supplement retirement income, or
- desire to
establish a legacy for family members.
In the case of a corporation, the
objective can be to
- provide support in a local community,
- divest itself of underperforming assets,
- utilize the value of the asset as a deferred
compensation vehicle for executives, or
- fulfill philanthropic objectives for public
relations purposes.
Whatever the objective, the first
step of any real estate donation involves a ready, willing, and able donor. In
this stage of the process, it’s extremely important for the donor to seek the advice
of his or her accountant, attorney, or financial adviser; someone who has
enough information about the donor’s financial picture to evaluate the
financial impact of the donation.
Charitable
Organizations
The next step is to identify a
ready, willing, and qualified charitable organization to accept the gift. This
is where most real estate donations break down because most charitable
organizations are not knowledgeable about the real estate gifting process and
are concerned about the perceived risks, the complexity of due diligence, the difficulty in converting the donation into
cash, as well as legal and tax issues. Therefore, approximately 80 percent of
real estate donations are rejected.
The CCIM Foundation’s Real Estate
Gifting Program fills the void as a third-party professional facilitator and
consultant to assist other charitable organizations on the donation of real
estate. The Foundation has a webinar available
for charitable organizations to educate them on the process and its Gifting
Team can be called on to provide information about the process, discuss real
estate options and pros and cons, and explain the due diligence process.
Since different types of real
estate result in different issues, the team is also prepared to work with professionals
from other disciplines such as accountants, investment professionals, appraisers,
environmental engineers, and property managers. The issues are identified and
the appropriate team of experts works together to assess each real estate
donation.
CCIM
Education and Chapter Involvement
Not to be overlooked is the CCIM
who has unique and specific expertise that can be of value in the transaction. CCIMs
are often intimately involved in the donation process once it’s underway.
Education on the process is a key component for any CCIM interested in this
niche however. This is where the Foundation has stepped in to provide an
education program for CCIM Chapters to use at the local level for the benefit
of members. The Foundation also has shorter versions of its program to be used
at luncheon meetings as an introduction to the topic. Finally, for those
interested who cannot attend a meeting, a webinar on ccimef.org that can be accessed
at anytime.
Education on this issue will
increase the likelihood that donors will seriously consider donating real
estate and increase the acceptance of real estate donations by charitable
organizations. Chapters can assist in this educational endeavor by inviting
accountants, attorneys, investment advisers, and the executive directors of
local charities to meetings where the topic is being highlighted. A CCIM can
assist by learning about the options available and considering them as
possibilities when working with both individual and corporate clients.
Each party, donor, charitable
organization, and CCIM designees will benefit as knowledge on the advantages of
real estate donations increases and these donations become accepted and more
prevalent in the charitable world.
CCIMs who have clients that may
benefit from donating property or know of charitable organizations that can
benefit from real estate donations can work with the Real Estate Gifting
Realized program to help those clients achieve a financial advantage through a
real estate charitable contribution.
Mary Stark Hood, JD, CFP, is president
of the Hood Group, which provides consulting services to business organizations
and foundations. She currently serves as a consultant to the CCIM Foundation’s Real Estate Gifting Realized Program.
Contact her at maryshood@comcast.net. Learn
more about the Foundation’s gifting program at www.realestategifting.org.