Right Amount to Ask For

 

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Published September 18, 2013

The Right Amount to Ask For

What is the right amount to ask for? Here are some key factors to consider in setting the amount.

  1. Liquidity is the key
  2. Annual gifts are based on Income— Capital Gifts on Assets
  3. Consider age, number of children, family obligations
  4. Assets held in Trust are difficult to trace
  5. Real Estate and Agriculture can mean— Land Rich, Cash Poor
  6. Valuable Property is expensive to maintain
  7. Donor’s ability to replace Assets
  8. Attitude toward philanthropy and interest and involvement in the institution
  9. Major Gift = 10 to 25 times Consistent Annual Giving
    Example: Annual Gift – $10,000 = Major Gift of $100,000 to $250,000
  10. Age x Annual income x .01 = amount you can ask for over three year pledge period.
    70 years of age x $600,000/annual income = $42,000,000
    $42,000,000 x .01 = $420,000 over a 3 year period
  11. Age times Income ÷ 10 = Net Worth
    Example: 70 years old x $200,000/year = $14,000,000 ÷ 10 = $1.4 million Net Worth
  12. Net worth x .04 = amount that be given over 3 year pledge period
    Example: $14 million Net Worth x .04 = $560,000
  13. 10% of Annual Income = Giving ability over 5 year period
    Example: 10% of $200,000 (Annual Income)= $20,000 . . .
    $4,000/year for 5 years
  14. 10 times Annual Income = Net Worth
    $200,000 (Annual Income) 10 = $2 million Net Worth
  15. 2 to 5% Net Worth = Giving ability over 5 year period
    $2 million Net Worth
    2 to 5% = $40,000 to $100,000 over 5 years
    $8,000 to $20,000 per year

 



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