July 23, 2009
As the effects of the deteriorating economy ripple through development offices of non-profit organizations of all sizes and shapes, increasing attention is being paid to the potential of real estate gifts. This shift in attention is due to several factors:
- With growing liquidity concerns in most households, cash gifts – current or deferred – are becoming harder and harder to come by. This is causing development professionals to turn more of their attention to the non-cash assets of their donors and prospects, particularly real estate assets.
- Real estate assets comprise over 35% of the assets of U.S. households. Yet only about 3% of charitable giving in recent years has come from real estate gifts. Development offices are increasingly recognizing the need to go where the wealth is – the largely untapped potential of real estate.
- More attention is being paid to the experience of those non-profits that have consistently attracted large numbers of substantial real estate gifts. A survey conducted by the National Committee on Planned Giving, published in the Fall 2008 issue of The Journal of Gift Planning, reported that 13% of institutions responding received over 10% of their total contributions as real estate gifts over the previous three years, as measured in dollars.
- The collective experience of institutions that have enjoyed success in pursuit of real estate gifts has led to an increasingly accepted body of “best practices” that permit the opening of the doors to real estate gifts while carefully managing and minimizing the potential risks of real estate.
- Institutions at one stage or another of campaigns – planning phase, quiet phase, or those that have gone public and are concerned about hitting their targets – are increasingly turning their attention to the potential of real estate gifts. Indeed, there is evidence that the methodology for many campaign planning/feasibility studies in the future will devote more explicit attention to the role of real estate gifts in campaigns.