Matthews firms target nonprofits

By Todd Cohen

MATTHEWS, N.C. — Lee Hoffman has made it his business to offer nonprofits tools and resources they can use to secure “planned” gifts that are deferred or involve assets other than cash.

A Vietnam veteran and former insurance agent who advised clients on charitable estate planning, Hoffman heads three Matthews-based companies that provide planned-giving services.

In 1983, aiming to reduce the time and effort it took nonprofits and professional advisers to perform the manual calculations required to show donors the future impact of a deferred gift, Hoffman founded PhilanthroTec.

The firm, which has 1,100 customers throughout the United States, offers software and web-based systems that nonprofits and advisers can use to show donors tax deductions and income streams for a range of giving options.

In 1998, seeing a need among nonprofits and advisers for better information about planned giving, and the potential to deliver it online, Hoffman founded the Planned Giving Design Center.

The web-based Center has over 80 clients that host it, including Foundation for the Carolinas in Charlotte, and over 25,000 registered users.

And in 2004, wanting to help nonprofits reduce the cost of handling gifts of securities, the Center acquired Boston-based AssetStream, which processes those gifts online.

After two years of redesigning its site using open-source technology, AssetStream has begun marketing its services and already has 30 customers, including the March of Dimes and Christian Broadcasting Network.

“A gift of stock is the first planned gift a person can make,” says Hoffman, president and CEO of all three companies. “And we wanted to level the playing field because currently only some organizations have the staff and knowledge to acquire gifts of securities.”

In addition to serving as charities’ back-office to process gifts of securities, Hoffman says, AssetStream provides charities with an online calculator, and manuals, brochures, website content and an email campaign they can use to market stock gifts to donors.

With a staff of eight employees, AssetStream expects to add 200 to 300 customers next year, and plans to hire a full-time employee for every 20 new customers, Hoffman says.

Now based in Matthews, AssetStream generates an email message to a client charity notifying it when a donor makes stock gift; generates a letter of authorization for the donor based on the requirements of the donor’s brokerage firm; and sends the donor a tax receipt when the gift is completed.

And a charity can go online to check the status of a gift or review the entire process, and can contact AssetStream to ask questions.

In addition to a $195 set-up fee, a nonprofit can pay $2,495 a year, plus a fee of $50 or 6 cents a share for each security, whichever is greater, or it can pay $295 a year that is taken from the first gift, plus $50 for each security or 3 percent of the value of the security, whichever is greater.

AssetStream also has begun marketing its services to financial-services companies, and Merrill Lynch already plans to use a co-branded version of the product for some of its nonprofit clients.

“The advantage of giving securities is it will cost you less because you avoid paying a capital-gains tax,” Hoffman says, “or you can make a larger gift at the same after-tax cost of giving cash.”

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