Jennifer Pline, managing director of Trusts and Gifts at Harvard Management Company (HMC), shares her thoughts on the advantages of various planned gift options, the exciting momentum at HMC under the leadership of new president and CEO Stephen Blyth PhD ’92, and the impact planned giving donors can have on Harvard and the world.
Q: Why is planned giving so important to Harvard?
Planned gifts are a powerful part of the philanthropy toolkit. They really offer donors the best of both worlds. By making a planned gift, you can receive income during your lifetime and have the satisfaction of watching your gift grow, knowing that when it is released, you will have made a real impact on the School or area you want to support. You can also benefit your spouse and/or children. Planned gifts are especially effective at helping people stretch their giving. At Harvard, there are statistics showing that a donor’s first planned gift is typically larger than all of his or her previous gifts combined. That is high-impact philanthropy.
Q: What makes a charitable gift annuity an attractive option?
Charitable gift annuities are perfect for those who want to contribute to Harvard’s mission but also need to secure a certain guaranteed annual income during their retirement years. The University’s assets stand behind the annuities; that’s about as secure as you can get. As you can imagine, this option became very popular during the uncertain times of the financial crisis in 2007 and 2008, and it has remained so during the recovery.
Q: Why is it an attractive time for donors to set up a lead trust at Harvard?
A lead trust is a powerful planning tool that enables you to support Harvard while simultaneously transferring wealth to your heirs free of gift or estate tax, or reducing your taxes in a big income year, or both. The effectiveness of a lead trust is enhanced in a low interest rate environment, and with rates still near historic lows, we are seeing a great deal of interest in this estate planning option.
Q: Can you explain how gifts of appreciated property work and why this is a good time to consider making such a gift?
Giving appreciated property is another smart way to combine your philanthropic interest with tax-wise planning. In most scenarios, people who make gifts of appreciated property can deduct the full amount of the value of the property and save on capital gains taxes. This is another way for planned giving donors to stretch their giving and increase their impact because they can make a significant gift and receive favorable tax benefits.
Q: HMC has a new president and chief executive officer. Can you talk about some of the new directions that HMC is taking?
This is an exciting time at HMC. Stephen Blyth, who took over on January 1, 2015, has been doing a tremendous job carrying forward the mission of HMC and determining new ways to build upon it. Stephen has been at HMC since 2006, so he stepped into the position with a wealth of knowledge. He has spent the past nine months setting a course for the future of HMC, designed to improve its investment performance over the long term. In particular, he has outlined clear investment objectives for the organization so it can most effectively support the mission of Harvard. He has focused on reinvigorating our investment process by increasing collaboration among investment teams, considering new partnerships and investment vehicles, and ensuring that we build the conviction to invest at appropriate scale.
Q: What are some of the challenges facing HMC today? How is HMC poised to respond to those challenges?
HMC has a powerful investment platform. Our hybrid model of investment management gives us flexibility to respond to many different types of market conditions. Over the past year, market volatility has increased significantly and liquidity has declined, especially driven by new market regulation. While volatility and low liquidity can be challenging in the short run, they can also present opportunities for investors like HMC that possess stable capital. We are aware that many asset classes have been fully priced due to the unprecedented central bank liquidity injections of the past eight years, yet we feel that opportunities will continue to present themselves across markets over time.
Q: Why should someone support Harvard with a planned gift?
Harvard has the capacity to change the world. When you look at what our faculty, students, and alumni are doing to answer difficult questions, solve problems, find cures, and serve so many needs, Harvard is uniquely positioned to help make the world a better place. Giving to smaller charities will always be important, but when you make a gift to Harvard, you can help effect change on a great scale. I would add that when you make a planned gift to Harvard, our team is committed to providing you with the best in personalized service. If you want to talk to someone about your gift, we are here to answer your questions. We are devoted to helping our planned giving donors.
Q: What do you enjoy most about working at Harvard?
I enjoy being part of a mission-driven organization that has a real clarity of purpose. In the investment world, you often get pulled in multiple directions, but here we’re furthering one institution. I also love working with the alumni. They are fascinating people with amazing stories. Many tell me that they couldn’t have gone to Harvard without financial aid and how the opportunity to do so changed their lives. It’s inspiring to know that a strong endowment makes all of that possible.
Contact University Planned Giving to learn more.