A Donor Offers You $5,000. Now What?

Congratulations! You’ve done everything right, so far. As a result, a prospect has offered to write a $5,000 check to your nonprofit organization. She only has one question: “Who should I make the check out to?”

So, what should you do next?:

A. Let loose with an enthusiastic, sincere, “Whoohoo!”

B. Thank the donor and tell her the proper name of the organization for the check.

C. Tell the donor the information is on your organization’s website.

D. Thank the donor, tell her the proper name of the organization for the check, and then say, “And, let me just ask, if I may, do you have any appreciated stock?”

If you’re like most development professionals, you probably answered “B.”

While that’s not exactly a wrong answer, there is a better one that will be more helpful for the donor and for your charity: “D.”

Sadly, many development professionals wrongfully assume that all donors of means know, at least, the basics of financial planning and tax avoidance. However, that’s simply not the case.

Sometime ago, I served on the board of a nonprofit organization. At one of the charity’s events that I attended, a modest donor came over to me and expressed an interest in donating $5,000. She simply needed to know the organization’s official name so she could put it on the check.

As in the above scenario, after thanking her and providing the information, I asked if she had any appreciated stock.

Puzzled by my question, she replied, “Yes, I do. Why do you ask?”

Special Report: Do You Want to Talk with an Award-Winning Author?

Have you ever read a book and wished you could talk directly with the author? Did you ever want to pick the brain of the author to get additional helpful ideas? Have you had questions about the material that you desired to explore more deeply? Were you ever curious about the author’s view of the future? Did you ever wonder what parts of the book the author felt were most important? Did you ever want to let the author know which parts of the book you particularly liked or which parts you disagreed with? Have you ever wanted to know if the author had acquired valuable, new information since writing the book?

If you answered “Yes” to any of the above questions, I have a special opportunity that will interest you.

I (Michael J. Rosen, CFRE) will be interviewed on The Nonprofit Coach Radio Show on Tuesday, February 26, 2013 at 12:00 PM (EST).

I wrote the bestselling book Donor-Centered Planned Gift Marketing, for which I won the AFP/Skystone Prize for Research in Fundraising and Philanthropy. The book is on the official CFRE International Resource Reading List. I’ll be discussing the book with host Ted Hart, ACFRE. We’ll also look at the challenges and opportunities presented by recent changes in government policy.

During the program, listeners will have the opportunity to call in to ask questions. You can learn more about the broadcast and find the call-in number by clicking here.

I invite you to listen to the show live and to participate by calling in to the program. If you’re unable to listen to the live show, you will be able to stream it after the broadcast.

To Sue or Not to Sue Over Unpaid Pledges?

Sometimes, nonprofit organizations sue philanthropists over unpaid pledges. This was recently the case with the Kansas City Art Institute. When a charity pursues this type of legal action, it sends shockwaves throughout the nonprofit and philanthropic sectors.

I do believe there are times when a nonprofit can and should sue a donor. However, this should only be done as an absolute last resort. The three instances when a lawsuit might be acceptable are:

1. The donor dies with an outstanding pledge and an heir challenges the will. In that case, the nonprofit might need to sue the estate to establish its claim and collect.

2. The nonprofit incurs real expense based on the donor’s commitment. For example, based on a pledge agreement, the nonprofit breaks-ground on a new building. The nonprofit might need to sue simply to survive.

3. The donor is about to or has entered bankruptcy. Suing the donor would be a way for the nonprofit to establish its claim. (By the way, I suspect that this fear might be what may have triggered the Art Institute case.)

In any case, suing a donor should only be done after careful consideration and only when all other options have been exhausted.

To sue or not sue over unpaid pledges? That is the question. The answer, offered by Brian M. Sagrestano, JD, CFRE and Robert E. Wahlers, MS, CFRE, is: Avoid the problem in the first place!

Brian and Robert are friends of mine. They are both seasoned, wise development professionals who have served on the national board of the Partnership for Philanthropic Planning. I’m pleased that they have offered to share some of their wisdom below as they introduce us to the concept of “concierge stewardship.”

Brian and Robert both generously provided insights and material for my book, Donor-Centered Planned Gift Marketing, for which I won the AFP-Skystone Partners Prize for Research in Fundraising and Philanthropy.

Now, Brian and Robert have written their own book, Philanthropic Planning Companion: The Fundraisers’ and Professional Advisors’ Guide to Charitable Gift Planning, and I’m honored to have been included in their comprehensive volume. The book is part of the AFP/Wiley Fund Development Series.

The official description of the book notes, “For fundraisers and professional advisors alike, The Philanthropic Planning Companion is the one-stop resource you’ll keep by your side to help your donors/clients meet their charitable and personal planning objectives.”

So, do you want to avoid a nightmare at your organization? If so, read on:

 

The Kansas City Art Institute recently sued Larry and Kristina Dodge for failure to pay $4 million on a $5 million pledge that was to be used to pay for construction of a new building, according to The Kansas City Star.

When the Dodges attempted to defend themselves (rather than hire an attorney they indicated that they could not afford), they made procedural errors and a default judgment was entered against them for the full $4 million due on the pledge. According to The Star, the Dodges made three payments on their pledge before their financial situation was impacted by the Great Recession, limiting their ability to fulfill the commitment.

In the article, Larry Dodge is quoted, indicating that he and his wife were in negotiation with the Institute to come up with a payment plan when it unexpectedly filed suit to collect on the pledge.

Regardless of the outcome, the reputations of both the Dodges and the Institute are forever harmed. Prospective donors will think twice before making a major commitment to a charity that would sue them to collect on a pledge. Meantime, the Dodges reputation, despite their many years of generous philanthropy, will be forever tarnished.

We cannot judge the merits of the Art Institute’s action or the ability of the Dodges to pay on their pledge, as we are not privy to all of the facts of the case. However, it raises a much larger issue about charities and pledges.

Latest Stelter Report Flawed but Still Insightful

Earlier this month, The Stelter Company presented the findings of its latest research project at the Partnership for Philanthropic Planning’s 2012 National Conference on Philanthropic Planning. What Makes Them Give: 2012 Stelter Donor Insight Report is the Company’s third study of planned giving in the United States.

As a nerd and as the winner of the 2011 Association of Fundraising Professionals/Skystone Partners Prize for Research in Fundraising and Philanthropy, I enjoyed reading the report. And, I thank The Stelter Company for adding to the nonprofit sector’s base of knowledge.

While flawed, the report does offer some interesting tidbits. This post will examine some of the useful tidbits and problematic flaws. Some of the insights are new while others will confirm what experienced gift planners have long known or suspected.

Many Planned Givers Are NOT Loyal Donors

Perhaps the most interesting finding is that 21 percent of those who have made a planned gift “never donated to the charity before putting a planned gift in place.” An additional 20 percent did give to the charity prior to making a planned gift, but did so for less than five years.

The conventional wisdom has been that loyal donors make the best planned giving prospects. However, the report shows that 41 percent of planned gift donors are outside of the loyal-donor model. This underscores the importance of making planned gift messaging ubiquitous.

Planned Givers Are NOT Always Large Current Donors

Among those who have made a planned gift and who have also made an annual giving donation to the charity, 40 percent gave less than $500. Only 16 percent have given $5,000 or more. While the old donor pyramid, where small donors become major donors and then become planned gift donors, may be true for many, the vast majority of planned gift donors have not first been major donors.

This means that, when looking for prospective planned gift donors, development professionals must consider the organization’s entire database. This includes large donors, medium donors, small donors, and even non-donors.

Bequest Giving is the Most Popular Planned Gift

The study found that “a bequest is the most popular vehicle for planned giving.” The report confirms what has been a long-held belief among gift planners and a fact that I included in my book, Donor-Centered Planned Gift Marketing.

This is good news for all nonprofit organizations. Virtually all nonprofits can easily and inexpensively promote bequest giving. For those organizations with a bit more expertise and resources, a bequest conversation or a bequest commitment may provide a gateway for a conversation with the donor about more complex giving vehicles. If the market finds a bequest to be the most popular form of planned giving, savvy planned gift marketers will take notice and market accordingly. On the other hand, bequest giving may be the most popular vehicle because it is the one that is already most widely promoted by the nonprofit sector; perhaps this should be examined in a future study.

Many Planned Givers Are Reluctant to Tell the Charity

Among those who have made a planned gift, 49 percent say that they have not told the charity. This raises an important question not asked as part of this study: Why haven’t you told the charity?

I suspect that many donors simply consider their estate planning a private matter and, therefore, choose not to disclose a planned gift provision to the charity that will benefit. I also suspect that others do not want recognition from the charity that they suspect will lead to more pressure to give more either to that charity or another nonprofit organization that takes notice. But, the biggest reason for nondisclosure may simply be that donors do not understand the value of disclosure to themselves and to the organization. Development professionals need to do a better job of articulating the benefits of disclosure to encourage more donors to do it.

Planned Givers and Prospects Use Social Media

A majority of planned gift donors and prospects surveyed use at least one of five social media networks tested:

–Facebook, 39 percent

–Google Plus, 19 percent

–LinkedIn, 17 percent

–Twitter, 6 percent

–MyLife, 1 percent

The report found, “Almost one-fourth of major donors, current planned givers and best prospects in their 40s would like to connect with nonprofits on Facebook.” Donors and prospects are using social media. Smart development professionals will meet donors and prospects where they are. This means including social media in the marketing mix.

Few People Are Asked for a Planned Gift

Only 26 percent of planned gift donors and best prospects — “people who say they will definitely or probably make a planned gift in the future” — say they have received a letter or email about planned giving. Only 17 percent say they have been asked directly for a planned gift.

If nonprofit organizations want more planned gifts, they need to ask more people, more often, and in the right way. With so few people receiving direct planned giving communications, there is not a high-degree of competition. On the other hand, this means tremendous potential.

While What Makes Them Give contains some useful and valuable information, I have some issues with other elements of the report:

Special Report: Web-Radio Conversation about Planned Giving

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I was recently a guest on the Nonprofit Spark web-radio show hosted by Renee McGivern, President of Spark Plug Consulting. We had a great conversation about one of my favorite subjects: donor-centered planned giving.

Here’s what Renee has to say about the show:

Many, many organizations – even 30, 40 or 50 years old – are not encouraging donors to remember the organization in their wills. It’s a huge lost opportunity and, yet, planned giving can be an easy and natural fit into the fundraising and communications you’re doing now. It does not have to be complicated, and it can be about gifts for today and tomorrow.

My guest this week is Michael J. Rosen, CFRE, President of ML Innovations, Inc., a fundraising and marketing consulting firm based in Philadelphia. He’s the author of the bestselling book, Donor-Centered Planned Gift Marketing. He also is an Adjunct Professor at Drexel University where he teaches a course on advanced fund development. Finally, he is a recipient of the prestigious Skystone Prize for Research in Fundraising and Philanthropy from the international Association of Fundraising Professionals.

You’ll come away from this show with just enough information to talk internally about how to incorporate planned giving into your current fundraising program and to get started.”

 

You can listen to the show for free by clicking here. 

I enjoy talking about gift planning. A planned gift is a great way for a donor to support his or her favorite nonprofit organization in a major way. And, planned giving is something that almost anyone can engage in.

So, yes, I do like talking about planned giving. Sometime ago, I was honored to be interviewed by Jan Uekermann. Jan and I also talked about donor-centered planned giving. You can watch the interview on YouTube by clicking here.

Only 22 percent of Americans over the age of 30 report that they have been asked for a planned gift, according to a study by The Stelter Company. I hope you’re talking to your organization’s supporters about planned giving.

That’s what Michael Rosen says… What do you say?

Special Report: Seeking Helpful Tips from the AFP Conference; Chance to Win a Book

I’ve never missed attending the Association of Fundraising Professionals International Conference since I first attended way back when, in the long, long ago. It’s always been a great chance to see old friends, make new ones, and learn something. Unfortunately, this year, due to my wife’s health condition, I did not go to Vancouver for the Conference. For whatever reason, I know many other development pros who were also unable to attend.

So, I’m calling on folks who were able to go to the Conference to share some of what they’ve learned. If you attended the Conference, please share with us below an interesting factoid you learned or the favorite how-to you picked up. It doesn’t have to be a long description. Any pithy, useful piece of information or advice would be appreciated. Feel free to enter as often as you’d like.

When you share a precious nugget, you’ll automatically be entered into a drawing to win a free copy of my book, Donor-Centered Planned Gift Marketing, for which I won the 2011 AFP-Skystone Partners Prize for Research in Fundraising and Philanthropy. If you already have a copy of my book and you win, I’ll be happy to donate the book in your honor to your favorite charity.

If you’re interested in purchasing a recording of one or more of the Conference sessions, ordering information will be posted at the AFP website. 

That’s what Michael Rosen says… What do you say?

 

[Publisher's Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including "Special Reports," please take a moment to subscribe in the right-hand column.]

Special Report: Academy Awards of Nonprofit Books and Other Honors

[Publisher's Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including "Special Reports," please take a moment to subscribe in the right-hand column.]

I was honored to be recognized recently by the Nonprofit Community blog site in its post “Our Academy Awards of Nonprofit Books.” My book, Donor-Centered Planned Gift Marketing, the winner of the 2011 AFP-Skystone Partners Prize for Research in Fundraising and Philanthropy, was recognized along with four other award winning books in the areas of fundraising and nonprofit management.

Donor-Centered Planned Gift Marketing was also recognized on the Tri-Point Fundraising blog site in Amy Eisenstein’s post “A New Resource for Donor-Centered Planned Giving.” I appreciate Amy’s wonderful review of my book.

In other news, Michael Rosen Says… received a much-appreciated tip-of-the-hat from Fundraising Success magazine. My recent post, “Overcoming the 9 Fundraising NOs” was named one of “Today’s Featured Blog Posts.”

The Business of Giving and Michael Chatman Giving Show recently honored me by placing me and my consulting practice, ML Innovations, Inc., on its list of “Top 30 Most Effective Fundraising Consultants.” I’m touched to be included on a list that includes so many legendary names in fundraising.

I was also honored to be interviewed for an article for The Chronicle of Philanthropy. I was quoted in “Komen vs. Planned Parenthood Fallout Will Make Cancer Group Work Harder, Experts Say” after my blog post, “Does Komen Have a Communications or Integrity Problem?”, caught the attention of staffers at The Chronicle.

My Komen post was also recognized by Amy Stephan in her article “Nonprofits and Social Media: Why Silence is Not Always Golden” for the WindMill Networking blog. I appreciate the mention and her terrific contribution to the discussion.

I think I might actually be blushing. I appreciate all the recognition I’ve received in the past few weeks. And, I greatly appreciate the support of all my clients, contributing writers, and readers, without whom, none of this recognition would have been possible.

That’s what Michael Rosen says… What do you say?

Enter Now to Win a Free Planned-Giving Book

I always find January to be a bit of a let-down. By contrast, December is very festive with Chanukah, Christmas, Kwanzaa, Festivus, and New Year’s Eve. But January? January is dark, cold, and filled with post-holiday malaise.

So, I thought I would do something to bring a bit of fun into January.

In honor of the Martin Luther King, Jr. National Day of Service (January 16), publisher John Wiley & Sons and I will be giving away one free copy of my book, Donor-Centered Planned Gift Marketing.

MLK Day recognizes the birth of King while encouraging citizen action. Many in the nonprofit sector have embraced this day to promote volunteerism. Since my book helps nonprofit organizations secure much needed resources, I thought a planned-giving book give-away would be just one small thing I could do at this special time of year.

In a moment, I’ll tell you how you can enter to win. First, I want to say that I think planned giving is a very attractive way for individuals to support favorite charities, especially during challenging economic times.

A few years back, I was trying to explain to my oldest, childless aunt what it is I do for a living. I tried explaining planned giving. Grasping what I was saying, she asked, “Why on Earth would someone give to a charity after they’re dead?” I asked her, “What charities do you support now?” Among the organizations she supports is an animal welfare group. I then asked, “Who’s going to take care of the little puppies and kittens after you’re no longer here to keep writing checks?” Her eyes widened and, in that moment, I think I might have lost my inheritance.

Planned giving allows people to continue to support organizations they are passionate about after they are no longer here to keep writing checks. In addition, planned giving may help donors lower their taxes, pass money and property on to heirs in an efficient way, generate an income, or provide major gifts to organizations without making any sacrifice during their lifetime. All of these benefits of planned giving are magnified during challenging economic times.

For these reasons, among others, I strongly believe that now is a great time to talk with people about gift planning. Today, given economic uncertainty, individuals might be uncomfortable making a significant financial gift out of current cash. However, those same individuals might be perfectly willing to provide some type of deferred contribution or life-income gift.

Only 22 percent of Americans over the age of 30 say they have been approached by a nonprofit organization to consider a planned gift, according to a survey by the Stelter Company. Imagine how much more revenue would be generated if more nonprofit organizations asked more people for a planned gift.

Now, let me tell you how to enter the book give-away.

For your chance to win a free copy of Donor-Centered Planned Gift Marketing, simply comment below.

Special Report: AFP Webinar, “Donor-Centered Planned Gift Marketing”

On November 1, I did a webinar for the Association of Fundraising Professionals. The program was titled: “Donor-Centered Planned Gift Marketing.” If you missed the webinar, you can purchase a recording, slides, and handouts directly from AFP by visiting http://afp.peachnewmedia.com/store/provider/provider09.php. The program is approved for credit by CFRE International.

If you were able to participate in the webinar, I invite you to post comments or questions below. We can continue the conversation here.

The webinar bears the same name as my book, Donor-Centered Planned Gift Marketing. The book is on the official CFRE International Resource Reading List. For writing the book, I was honored to receive the AFP-Skystone Partners Prize for Research in Fundraising and Philanthropy.

I thank AFP for inviting me to do the webinar. And, I thank the AFP Greater Philadelphia Chapter and the Community College of Philadelphia for providing my host location for the presentation.

[Publisher's Note: "Special Reports" are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. "Special Reports" are not widely promoted. To be notified of all new posts, including "Special Reports," please take a moment to subscribe in the right-hand column.]

You Don’t Really Need Another App … or Do You?

So, you’re one of the cool kids. You own a smartphone such as an Android device or Apple iPhone. You’re in good company. A study from the Pew Internet and American Life Project (May 2011) reveals that 42 percent of cell phone users now own a smartphone. Incidentally, 83 percent of American adults now own some type of cell phone.

Perhaps you own one of the 28.73 million iPads that have been sold worldwide. Or, maybe you own another tablet device.

If you own a smartphone or tablet computer, you’re no doubt familiar with Apps, those little pieces of software that allow us to check email, pick a restaurant, search the Internet, or kill pigs by tossing Angry Birds at them, etc. There are over 425,000 Apps for the iPhone and over 480,000 Apps for Android phones. I’m not even counting the Apps for tablet devices. So, do we really need another App?

Well, I happen to believe there’s room for at least one more App. This one is just for those working for or volunteering with nonprofit organizations. The App is the Nonprofit Manager’s FAQ from the good people at Jossey-Bass/Wiley publishing. While an App like Angry Birds might help you pass the time, the Nonprofit Manager’s FAQ will help you pass your time more productively by answering your questions, helping you improve results, allowing you to preview outstanding books for nonprofits, and making buying those books from your favorite online retailer as easy as possible.

As the publisher describes it:

 

[In the Nonprofit Manager’s FAQ] App, you’ll find answers to your most critical nonprofit management questions and challenges. Painstakingly culled from new and bestselling Jossey-Bass/Wiley books and resources written by leading minds and organizations in the field, this App brings together tips and guidance on how to work more effectively in the nonprofit field. Designed for busy professionals, this App offers brief insights on every aspect of nonprofit work including Boards, Management, Marketing, Finance, Fundraising and Legal. New content will be added on a regular basis so download this trusted resource today! Features include: The ability to search and browse all content, pick and save your favorite answers and content, share your discovery via Facebook, Twitter and email, and adjust the text size. You can also discover the sources of the content as well links to websites for the authors and organizations behind it.”