CCIM Feature

Real Estate Gifting Realized: Donors, Charitable Organizations, Education, and Chapter Involvement

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.

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