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_:: per_ . . Death and Taxes How will nonprofits raise the subject of m - o- n - e -y if the estate tax ends ? By Brad Edmondson YOU CANT TAKE IT WITH YOU . AND that the change would hurt charitable Fund- Raising Counsel in New York you cant leave more than $ 675,000 to your giving, but losing a chunk of the $ io . 9 City. One reason: The wealthy have a lot heirs, either, unless you're also willing to billion isn't their biggest worry. It turns more to give away. Since 19go, the value pay the government through the nose . out fundraisers like the estate tax because of the Standard & Poor's Soo Index has Federal taxes on large estates can run as it gives them a great opening line. nearly quintupled. Another reason: Giv- high as 6o percent. The rules could change "The presence of an estate tax encour- ing as a percentage of personal income soon. The president-elect and Republican ages people to talk to advisers about increased from 1. 5 percent in 1995 to 1 . 8 leaders in Congress have vowed to weaken estate planning, and charitable giving is percent in i999 . or eliminate the estate tax this year. That usually part of that conversation, " says "Nonprofits have a difficult tightrope prospect has the rich cheering, while many Scott Blakesley, a Kansas City attorney to walk right now, " says Jay Steenhuysen fundraisers for nonprofit organizations, and president of the National Commit- of Gift Planning Direct, a fund-raising including thousands of preservation tee on Planned Giving. "Without that firm in Los Angeles . "They want to get groups, are quietly freaking out. incentive, inertia will take over. People gifts, but they also want their donors to a Currently, unmarried Americans try- doet want to talk about this. " have more discretionary income so they ing to . avoid the tax must reduce the Even worse, nonprofit groups fear, have more to give. " value of their estates below an exemption speaking out in favor of the estate tax As the population rapidly ages , fund- that will rise from $ 675, 000 this year to could offend their most important raisers grow giddy. The most generous slightly more than $ i million in 20o6. donors . "A perverse relationship develops donors tend to be elderly, and the num- One common mechanism to whittle between donors and charities, and the ber of Americans aged 65 and older down an estate is a bequest to charity. charities become gutless , " says Pablo increased almost i2 percent during the Another is setting up a family founda- Eisenberg, a former executive of a non- i99os . The number of Americans aged rion that makes charitable gifts . Only profit organization and 65 or older should rise about 1 . 4 percent of taxpayers will pay * now a senior fellow at " if you asked your from 34. 7 million in 2000 estate tax, but a lot of money is at stake. Georgetown Universitys to 53 . 2 million in 2020 , The estate tax generated $ 24 billion for Public Policy Institute . other how muchaccording to the Census the government in 1998 , according to the " Repealing the estate tax she 's leaving you , Bureau . Moreover, the Internal Revenue Service . In addition, would cost nonprofits $ 6 � would people who will write charitable bequests from estates that paid billion a year. Most non- bequests in the next two the tax totaled $io . 9 billion that year. profit executives do not ga. over? " decades belong to a During the presidential campaign, even know if their wealthy blessed generation that Democrats proposed raising the tax donors will object if they oppose the worked during the go-go years of the exemption on estates in 2006 from $ L15 repeal, But they have kept quiet in antic- 1950s and ' 6os and watched the value of million to $ 5 million . That would elim- ipation of that reaction. " their houses take offduring the ' yos and inate the tax for 70 percent of small busi- Lobbyists for the nonprofit sector say ' 8os . In their retirement years, they' ll nesses and 90 percent of family farms, they will fight for the estate tax, but some enjoy generous pensions and social secu- supporters claim, association executives say that if non- my payments that will allow their nest Republicans propose doing away with profits play their cards right, losing a few eggs to continue appreciating. the estate tax entirely. If they prevail , billion dollars a year across the board In i99o, Cornell University economist other taxes on estates will remain . But if from a change in the tax law wont mat- Robert Avery predicted that older Amer- the big one disappears, relatives, chari- ter. That's because charitable giving has icans would transfer $zo trillion to their ties , and beloved pets will have a level been increasing by $i billion a year, and heirs and assigns over the next 55 years . playing field for becoming heirs , it exceeded $ igo billion in r999 , accord- That was before the stock market quin- Most planned-giving experts believe ing to the American Association of tupled. Rerunning the numbers last year, 12 PRESERVATION