By Hal Abrams, Senior Consultant, Planned Giving
I frequently hear these common misconceptions about planned giving:
“We’ve been meaning to build a planned giving program just as soon as our capital campaign is over.”
“I don’t want to mention planned giving to this donor because he may take money off the table.”
“Mentioning death during a gift solicitation splashes cold water on the giving discussion.”
And these assumed rationales for not using planned giving throughout a campaign
“I would prefer not to raise too much money during the campaign.”
“I enjoy the challenge of fundraising with one arm tied around my back.”
Let’s reverse the order of words to better appreciate the power of Planned Giving. Let’s just call it “Gift Planning.”
Keep in mind that any good fundraiser's ultimate goal is building a sufficient relationship with a donor that shows giving opportunities that compliments their goals. Don’t we want to help our donors plan gifts that match their philanthropic and financial goals? If we don’t fully understand the goals of the donor, our gift solicitations are simply shots in the dark. The successful solicitation asks the donor at the right time for the right amount of money.
Building a Gift Planning program can help a fundraiser better identify the best donors. So let’s build a Gift Planning program!
What donor is better to focus on than someone who has already said your organization is in their will?
With this in mind, steps 1 and 2 to building a successful planned giving program are:
Create a Legacy Society that honors anyone who has made an end of life commitment (will, living trust, retirement plan, life insurance beneficiary or life income gift); and
Promote the heck out of the Legacy Society:
Include magic boxes on all reply mechanisms (“check here if you are eligible to be a member of the _____ Legacy Society because you have included us in your estate”);
Include Legacy Society promotion in all written and email communications (“PS Please let us know if you are eligible to be a member of the ____ Legacy Society”)
Send stand-alone post cards, buck slips, and emails (and include on the website) mentioning the ____ Legacy Society.
The immediate result after just taking these first two steps is to better steward your estate donors. This increased stewardship results in (1) decreasing the chance that the donor will remove you from their will (2) building a strong relationship with a donor who is fully qualified as having a strong affinity. Can anyone have a stronger affinity than someone who is trusting their hard-earned wealth with your organization upon their death?
Charitable giving expert, Russell James, found that over 50% of all charitable estates change one of their charitable beneficiaries within the last five years of a donor’s lifetime. So, let’s make sure we are top-of-mind for as many estate donors as possible.
Russell James' research also finds that donors who join a legacy society give, on average, 75% more after their membership.
Once you've set up and have started promoting your Legacy Society, move to Step 3:
3. Train Legacy Society Ambassadors: Start with development staff, then train board members to advocate for your Legacy Society. Ambassadors should be able to identify potential legacy society members and spot potential issues. They should also identify donors that might benefit from learning about the tax-saving and income increasing aspects of planned giving.
At this point, your Planned Giving Program is well on its way.
Learn about common planned giving techniques. Train your development team to have a basic understanding of planned giving techniques and their benefits. Common techniques include gifts from retirement accounts, stock, and even real estate. A second tier of planned giving techniques include life income gifts, such as charitable gift annuities and charitable remainder trusts. You can gain basic familiarity with these techniques through independent study or 1-2 consultant-led trainings.
With this basic knowledge, the development team can keep solicitation alive. They can offer ideas and solutions to common donor concerns that cause declined solicitations. For example, if a donor is concerned that their assets are not liquid, or they won't have enough money for retirement, your team can offer solutions that help the donor shift looming tax bills into charitable gifts.
Your development officers can make provocative statements such as, “Some of our donors have been able to sell their real estate or diversify their stock portfolios without paying any capital gains taxes.” This naturally elicits donor responses such as, “I own 4 or 5 LLCs with real estate, tell me more” or “That's interesting, but I don’t own any real estate or stocks.” The first answer can lead to better qualifying a donor than the best research department could uncover. The second answer is equally illustrative in qualifying this donor as not as high a capacity as their zip code, car, or job title might suggest (which is usually the extent that research departments can uncover a donor’s assets).
In conclusion, promoting a planned giving program is full of ways to better qualify, steward, and cultivate donors that lead to more and bigger gifts. Reach out to Ostara at any time for coaching and support with planned giving!