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A Reeves Trust is a type of trust that will give you and your clients a very efficient way to make charitable donations by utilizing a trust that works well within the framework of United Way agencies across the country. It will 1) enable the donor to effectively leverage their charitable dollars, 2) provide you with resources to get the trust created properly, 3) provide you and the donor with access to a registry of local agencies or access to local agencies not currently a part of the registry and 4) provides you with the resources of the United Way system to help effectively manage the donated dollars.
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The Reeves Trust Model Giving Program
The Reeves Trust Model attracts high net worth donors who want to help solve community problems and want to get the most from their charitable dollars. The Reeves Trust Model also encourages collaborative partnerships between the community service providers while also obtaining the accountability services that the United Way system provides.
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How does a Reeves Trust Giving Model work?
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Step #1
The donor's living trust or testamentary trust is set up in such a way that the trust has not only a custodian of the funds with a trustee but also a person or persons named (with alternates in case someone’s no longer able or willing to serve) that designate the disbursing of funds each year to a listed group of qualified charities named in the trust instrument. The testamentary trust is typically set up to pay out the principle and accumulated annual income over at least a 5 year period or longer. A donor's living trust could be set up to pay out income only annually or some combination of income and principle.
The person with the right to designate which charities on the list are receiving the monies each year does so annually in any proportion they deem appropriate to the named charities. This forces the charities to show a need for worthwhile causes if the want to continue to receive funding in future years. Typically, charities would like the funding in large lump sums but there is no accountability to the donor or the trust.
Step #2
In a conference with the client/donor the attorney or other professional advisor should determine what charitable causes they have in mind and in what geographic regions they would like to see their donations used in. This conference with the client is done with the aid of the website tools and consultation by telephone and email provided by the United Way to assist the attorney in locating the best charities to name in the instrument for that particular client. The registry of United Way organizations that is available through this website can be sorted by various causes (disaster relief, elderly care, children’s societies, Salvation Army, Red Cross, etc.) and by geographic region.
Step #3
The trust stipulates that the agencies are encouraged to partner with their local United Way by entering into a mutual agreement that will be beneficial to all parties. While the attorney is drafting the instrument, the United Way will be working on the arrangements to create agreements between the agencies in the United Way and the local United Way that the donor is interested in naming. These agreements will stipulate that any contributions received from the donor will be in lieu of the annual support of the local United Way (if the amount directly donated is more than the annual support amount). (See the section on advantages to the local agencies for doing so).
Step #4
The agencies will provide copies of agreements to the donor’s counsel.
Step #5
For donations to charities outside the United Way, the United Way system might also be able to provide leveraging of donors monies. Attorney’s are encouraged to provide a listing of all charities named by the donor in order to see what assistance can be provided by United Way.
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