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Gift from Life Insurance Company

  • 1.  Gift from Life Insurance Company

    Posted 11-21-2019 03:17 PM
    We recently received a check from a Life Insurance company of one of our regular donors. The description above the check says "Surrenders, Gross Withdrawal Request."

    Should we give hard credit to the Life Insurance company and soft credit the donor OR give hard credit to the donor?

    Thanks!

    ------------------------------
    Sara Weibel
    Advancement Communications Coordinator
    Trinity International University
    smweibel@tiu.edu
    ------------------------------


  • 2.  RE: Gift from Life Insurance Company

    Posted 11-21-2019 03:27 PM
    The legal donor is the individual.  The company is just their agent.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987






  • 3.  RE: Gift from Life Insurance Company

    Posted 11-21-2019 03:39 PM
    Would this be the same principle for IRA gifts? Pretty sure this is what I've read on archived posts.

    And what is the best practice for gifts from a DAF (donor-advised fund)?

    ------------------------------
    Sara Weibel
    Advancement Communications Coordinator
    Trinity International University
    smweibel@tiu.edu
    ------------------------------



  • 4.  RE: Gift from Life Insurance Company

    Posted 11-21-2019 04:07 PM
    Yes - the same for IRAs.  Thes assets are owned by the individual.  Not so with DAFs where the individual has already made their charitable gift to the DAF.  The DAF is the legal donor.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987







  • 5.  RE: Gift from Life Insurance Company

    Posted 11-25-2019 09:44 AM
    Hi Sara, 

    Building on John's answer, the key distinction between DAF and IRAs or Life Insurance is who the money belongs to. Even though donors use DAFs as personal giving vehicles, legally speaking, when a donor gives to a DAF, they transfer ownership completely. The donor may advise the DAF to make gifts, but the DAF has no obligation to listen to the donor. DAFs like those offered through Fidelity will generally follow all legal donor recommendations, but not all DAFs operate that way. Once you give to a DAF, your money doesn't belong to you. That's why you get a tex deduction for the gift to the DAF, but not  the DAF's gift going forward. 

    On the other hand, IRAs and Life Insurance disbursements belong to the policy-holders, or, by their hand, the beneficiaries. The bank or insurer have no agency or discretion over the money. 


    Thank you,
    Isaac Shalev
    CRM Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:






  • 6.  RE: Gift from Life Insurance Company

    Posted 11-26-2019 08:55 AM
    Thank you both very much! I am SO grateful for this forum.

    ------------------------------
    Sara Weibel
    Advancement Communications Coordinator
    Trinity International University
    smweibel@tiu.edu
    ------------------------------