SOFII is My Choice!

As my regular readers know, I seldom do what I’m about to do. Actually, I don’t know that I’ve ever done what I’m about to do.

I’m devoting this blog post to promoting someone else’s website, particularly the section on planned giving.

The web page at issue was posted by SOFII, the Showcase of Fundraising Innovation and Inspiration. SOFII was founded by fundraising legend Ken Burnett ”to be the most comprehensive, best organised, and most inspiring collection of fundraising related content from around the world.”

Photo from Greenpeace Sweeden Legacy Commercial.

The particular SOFII page I want you to check-out is: “Last Chance to Change the World — Legacies (Bequests) Showcase.” On this page, you’ll find no fewer than 28 links to superb planned giving marketing materials from around the world. For example, you’ll discover Greenpeace Sweeden’s clever legacy commercials, University of Oxford’s legacy brochure with individualized insert, AARP’s planned giving newsletter and booklet, and many other fine samples.

I thank the staff at SOFII and the organizations that provided the materials for enabling this valuable resource. Many blog sites and websites share useful insights, helpful tips, and provocative opinions. SOFII also does those things. But, as you’ll see when you visit the SOFII Legacy page, it lets you see the actual materials that our fellow fundraisers are using. And, you know how beneficial that can be.

20 Factoids about Planned Giving. Some May Surprise You.

There is no such thing as a “typical” planned giving program.

The reality is that there are an infinite variety of such programs. They come in various forms in varied degrees of sophistication. Planned giving programs vary by organization type, donor population, organizational budget, and a host of other factors.

A small organization with a limited budget and a modest individual-donor pool may simply promote the idea of naming the charity in a will. By contrast, a large organization with a significant development budget may promote a broad array of planned giving vehicles from bequests to charitable gift annuities to trusts.

Despite the differences from one planned giving program to the next, there are a large number of points of commonality.

This list of 20 factoids about planned giving has been drawn from my book Donor-Centered Planned Gift Marketing. I’m sharing it here because I’ve found, when I’m speaking around the country, that these are some of the tidbits that people have found particularly interesting and/or that they have been surprised by. Here are the factoids:

1.  Bequests are generally regarded as the most common form of planned gift. Charitable gift annuities come in at a far distant second.

2.  Almost everyone has the ability to make a planned gift. Planned giving is not just for the wealthy. Consider the following:

• Among survey respondents over age 30, 69 percent expect to leave an inheritance. (The Stelter Company)
• People over the age of 50 control 70 percent of all privately held financial assets in the United States. (U.S. Census Bureau)
• A 2005 study found that 50.3 percent of U.S. households owned equities in some form. (Investment Company Institute and Securities Industry Association)

3.  Bequests are the major gift of the middle class. Many individuals wish they could provide significant current support to the nonprofit organizations they love. Unfortunately, they’re not in a financial position to do so. They either don’t have the cash to give or need to preserve their resources to live off of during retirement. Planned giving gives these individuals the opportunity to make a significant gift without pain. For example, a donor can leave her home to her favorite charity upon her death. Or, a donor can give to his favorite organization and receive an income for life. Planned giving allows donors to make more significant gifts than they might otherwise be able to make.

4.  The average age of someone who makes their first charitable bequest commitment is 40-50. This means there is a great deal of time between when the donor includes a charity in his will and when the gift will be realized. That’s one reason why sound stewardship is essential. A nonprofit organization wants to remain in the donor’s will and encourage the amount of that commitment to grow overtime.

5.  High-income women are more likely than men to use complex gift planning tools. While it is unclear why this is the case, we do know that high-income women are more willing than men to establish a trust, for example. You can read more about the giving of women by reading my post “Men v. Women: Who are the Best Planned Giving Prospects?”

7 Things You Should Know about Seniors that You Probably Don’t

Photo by Visentico/Sento via Flickr

There are seven things you should know about older Americans that just might surprise you and help you with your fundraising efforts. U.S. Trust, Bank of America Private Wealth Management published the report U.S. Trust Insights on Wealth and Worth-TMbased on its 2011 survey of Americans with an average age of 61 and investable assets of at least $3 million.

There are now approximately 5.6 million households in the U.S. with more than $1 million in investable assets, including 4.8 million with $1 million to $4.99 million and 782,000 households with more than $5 million in investable assets, of which approximately 182,000 have greater than $10 million in investable assets.

Here’s what you need to know:

Of those with net worth of $3 million or more, 40 percent do not consider themselves “rich.” They may consider themselves “comfortable” or “financially secure,” but not “rich.” So, when speaking with those who you may consider to be wealthy, consider that they may not define themselves in the same way. So, be sure to speak their language. For example, many people think that a “bequest” is something that only rich people do and, therefore, there’s a good chance that they will not think this is an option for them since they’re not rich. When talking about a charitable bequest commitment, you might be far better off keeping it simple by talking about “supporting your favorite charity through your will.”

Older, wealthy Americans believe the most important use of wealth is to ensure financial security for themselves and their families. So, when speaking with these individuals, show them how philanthropic planning can benefit them and their families. For example, a Charitable Gift Annuity can provide them with an income for life. Or, a gift of appreciated stock rather than cash can help them avoid capital-gains tax. Also, be sure that donor prospects understand that you’re not seeking all or even a large portion of their wealth. Let them know that you understand the old adage that charity begins at home. By being donor-centered, you’ll have a happier prospect who will be much more willing to support your organization.

Among older, wealthy Americans, 40 percent say they do not have an estate plan that is comprehensive. There are many reasons for this. They may simply not have gotten around to it. They may not know what their options are. They may not know what the elements are of a comprehensive estate plan. They may not know to whom to turn for assistance. This presents you with an opportunity to be of service. You can educate these people and guide them to get their estate plan in order. In the process, you’ll have the opportunity to discuss how philanthropic planning can be an effective, desirable part of estate planning. And, you will earn the gratitude of those you assist.

Only about one-third (34 percent) of parents agree strongly that their children will be able to handle the inheritance they plan to leave them. This is an opportunity for you to show parents how they can structure their estates to confidently take care of their children while also benefiting their favorite charity. Again, by being of service to prospective donors, you can ultimately help your nonprofit organization.

Special Report: Important Updates to Two Prior Posts

[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 recently did a blog post titled “Charitable Gift Annuities: How Much Are You Leaving on the Table?” In response, Stephen Kull of Eastern Illinois University raised some questions about risk management and the Insured Gift Annuity Program offered by Morgan Stanley. I, in turn, raised the issues on GIFT-PL, the listserve of the Partnership for Philanthropic Planning, and on the Yahoo Planned Giving Group listserve. You can find Kull’s comment and the responses we received in the comments section of the post.

This past Spring, I wrote a blog post titled “Should Your Legacy Society be Inclusive or Exclusive?” In that post, I criticized the Association of Fundraising Professionals Foundation for considering a measure that would increase the minimum threshold for recognition in the legacy society from $5,000 to $10,000. I argued that even the minimum requirement made the legacy society exclusive when it should really be inclusive. I am happy to report that the AFP Foundation decided not to increase the minimum threshold. Unfortunately, they also decided not to eliminate the $5,000 minimum requirement. I thank Robert N. Croft, CFRE, an AFP Foundation board member, who provided an update to my original post. You can find Croft’s detailed update in the comments section of the post.

I thank everyone who shares their comments and insights. I particularly appreciate the individuals who have made these two particular updates possible.

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

Charitable Gift Annuities: How Much Are You Leaving on the Table?

Does your nonprofit organization already offer donors the opportunity to give through Charitable Gift Annuities? If so, is your organization realizing its full CGA potential or are you leaving a lot of money on the table? If you’re currently not offering CGAs, is your organization’s CGA potential sufficient to justify making this giving instrument available to donors and prospective donors?

In my book, Donor-Centered Planned Gift Marketing, I wanted to help development professionals answer those questions. So, I developed a “CGA Potential Worksheet” after getting some terrific insight from the legendary Frank Minton, Senior Advisor at PG Calc and former Board Chair of the American Council on Gift Annuities. In a previous post, I shared my “Charitable Bequest Potential Worksheet.” In this post, I’ll share my “CGA Potential Worksheet” with you.

First, let me very briefly explain what a CGA is. A CGA is a gift planning instrument that allows older donors to make a current gift to a nonprofit organization and, in return, receive an income for life and a tax deduction on a portion of the gift.

While an initiative to secure CGAs will enjoy greater success or less success from time to time depending on a number of variables including the state of the economy and interest rates, we can estimate what an organization’s potential is over time. To truly project how much a CGA initiative can produce, one must understand as many of the variables as possible including the nature of the prospect pool, the wealth of prospects, the age of prospects, the passion of prospects, the history of the organization, past service performance, the purpose of the fundraising effort, the nature of the cause, the community, past philanthropic performance, the marketing effort, and so on. Collectively, this makes it difficult to forecast actual results. However, one can fairly easily gauge an organization’s estimated potential given a mythical, ideal set of circumstances. The following worksheet is meant to provide development professionals with an understanding of the broad potential impact of a CGA initiative for their organizations.

While this is not a scientific forecasting tool, it can nevertheless help with forecasting by outlining aspirational targets. This worksheet looks at one of the most common, easy-to-market types of planned gifts.