What do Willie Sutton, Dennis Bidwell and real estate have in common?
Nothing, except for this: When asked why he robbed banks, Sutton (photo at left) famously replied, “Because that’s where the money is.” Decades later Bidwell wrote an article pointing out that “real estate assets comprise over 35% of the assets of U.S. households.” If so, he went on, “development offices…are increasingly recognizing the need to go where the wealth is–the largely untapped potential of real estate.”
Bidwell, a Massachusetts real estate consultant, wrote Real Estate in Challenging Times for the Planned Giving Design Center (see the full article here). In the article he wrote, “More and more non-profits are re-examining the risk and reward relationship of real estate gifts and are determining now is the time to start tapping in to the enormous real estate wealth transfer that surrounds us.”
It’s no surprise that, in these challenging times, cash gifts are often hard to attract. Some professional advisors have begun to suggest that their clients turn instead to real estate gifts as a way of meeting their philanthropic objectives.
Many nonprofits have so far resisted the temptation to seek real estate gifts. Their gift acceptance policies may even prohibit these gifts. It should not surprise us to learn from Bidwell that only 3 percent of charitable giving in recent years has come from real estate, despite the fact that more than a third of household assets is in real estate. Bidwell lays out a process of reversing course for those that choose to do so:
- Assess policies and determine if changes are needed.
- Convene key players to refine policies and procedures.
- Develop screening processes and due diligence to assess potential gifts and minimize risks (environmental assessment being among the most important).
- Develop procedures to sell real estate as quickly as possible.
- Train staff and board members on how to recognize potential real estate gifts and how to discuss gifts with donors.
- Determine how to market gifts for sale.