Should Your Legacy Society be Inclusive or Exclusive?

During the recent Association of Fundraising Professionals International Conference, a great event, I was approached by someone serving on an AFP Foundation committee. This person raised a very interesting question that I thought I’d share with you. The question deals with a fairly common planned-giving recognition issue frequently debated by nonprofit boards: Should a legacy society be inclusive or exclusive?

Since 1990, the AFP Foundation has recognized planned gift donors/pledgers as members of its Omega Circle. To become an Omega Circle member, one simply has to make a planned gift or planned-gift commitment of at least $5,000. Now, an AFP Foundation committee is reviewing the minimum threshold, which has not been increased in over two decades. Because I’m the author of Donor-Centered Planned Gift Marketing, I was approached by a member of the committee and asked how I felt about the idea of increasing the minimum threshold from the current $5,000 to $10,000.

I responded to the inquiry by pointing out that legacy recognition societies should be inclusive rather than exclusive. So, I think raising the threshold is a bad idea. Furthermore, I said that I think the committee is asking the wrong question. Instead of asking whether the Omega Circle minimum gift level should be raised, the committee should consider whether or not there should even be a minimum. I do not think there should be one. Again, legacy societies should be inclusive, not exclusive.

When I spoke with Curtis C. Deane, CFRE, CAE, President of the AFP Foundation, he defended the minimum threshold. He pointed out that there are hard stewardship costs in the Foundation’s gift planning program. One of the challenges in running a planned giving program for a professional association is that donors tend to be fairly young and active. This means that the Foundation will be waiting a long time for a gift to be actually realized. To underscore the point, Deane said that stewardship costs have exceeded realized planned-gift income over the six years he has been at the helm of the Foundation. By maintaining a minimum gift threshold, the Foundation hopes to ensure that a gift will retain some meaningful value when finally realized and that the costs associated with long-term stewardship will be more than offset.

While I understand Deane’s position, his arguments have not moved me. While eliminating the minimum gift requirement may result in some very small gifts, I doubt that it will result in a burdensome number of small gifts. Besides, with proper stewardship, some of those small donors will increase the value of their commitments over time.

There are a number of reasons why I continue to favor no minimums for legacy societies:

  1. Many donors will feel uncomfortable disclosing the amount of their planned-gift commitment. For some, this will be an obstacle to making the gift commitment at all. As development professionals, we should be in the business of removing, not imposing, obstacles to giving.
  2. Many donors simply do not know what the value of their planned gift will be. For example, a 45 year old donor who puts a charity in her will for five percent of her estate, will not have any accurate idea of what the value of that gift will be in another 40 years or so.
  3. For some donors, a set minimum becomes a maximum. By setting a minimum at $5,000, an organization will likely find many donors committing to that minimum rather than pledging to do more. That may be one reason the AFP Foundation is considering raising the minimum threshold.

By not setting a minimum in order for a donor be recognized, an organization removes an obstacle to giving. Donors who do not know the future value of their gift or who simply do not wish to disclose the value can make the deferred commitment with great comfort. By not setting a minimum gift level, an organization keeps the focus of the conversation on the donor and his philanthropic aspirations and needs; talking about a minimum gift requirement puts the spotlight back on the organization where it simply does not belong as a part of a donor-centered program. By not having a minimum gift level, more people will be more likely to make a deferred gift commitment. This in turn will inspire greater numbers of other people to follow suit. Simply put, removing a minimum gift requirement is the more welcoming way to go.

I’m reminded of a story I was told by the chief development officer from a rural hospital. She told me that an elderly couple had agreed to put the hospital in their will. They did not specify the amount. Nevertheless, the hospital recognized the couple as planned-gift donors and invited them to a stewardship event that included a tour of the hospital followed by lunch. After the tour, which included the children’s pavilion, the couple attended a simple luncheon with other donors. During the lunch, the gentleman stood up to make an announcement. He told the group that he and his wife had previously decided to include the hospital in their will. Yet, they weren’t sure how much to give and were thinking of something modest. However, when they visited the children’s pavilion, they realized that, having no children of their own, the community’s children are their children. So, the gentleman told the group that he and his wife had now decided to leave their entire estate, including their large farm, to the hospital.

The gift from the elderly farm couple would likely have never happened if the hospital had required a minimum gift commitment. Without having to make a minimum commitment, the couple felt comfortable pledging even though they did not know exactly what they would do. This allowed the hospital to steward them. As the hospital recognized the couple for their support, continued to cultivate the couple, and provided the couple with more information, the comfort level of the donors increased and so did their gift size, dramatically. If a minimum requirement had been in place, the couple would likely either not have made the commitment or would have locked into a more modest gift at the minimum level.

The AFP Foundation should set an example for the entire development profession and eliminate the minimum gift requirement for inclusion in the Omega Circle. Getting rid of the minimum will encourage more people to give which, in turn, will inspire even more people to give. Adopting a donor-centered posture is the right thing to do, and this is the example the AFP Foundation should set.

That’s what Michael Rosen Says… What do you say? Does your organization have a minimum threshold for membership in its legacy society? What should the AFP Foundation do?

15 Responses to “Should Your Legacy Society be Inclusive or Exclusive?”

  1. Michael, you ask what the AFP Foundation should do, but I’ll first answer the larger question about whether legacy societies should be inclusive or exclusive.

    For all of the reasons you’ve stated, and more, there should be no minimum gift amount. In most cases, the institution’s cost of maintaining the program, even if it includes a free annual event, is insignificant relative to the ultimate benefits. To measure payback over a very short term is consummate short-sightedness.

    The issue of the AFP Foundation is another matter, and for entirely different reasons. I will win no friends with my commentary, but that’s never inhibited me from expressing the truth. Unfortunately, in today’s politically correct world, to be candid and honest is to be unpopular. Hence, my title “the Planned Giving Curmudgeon,” which I wear as a badge of honor.

    From its inception (at the time, I was an NSFRE chapter Board member who was personally absorbing several hundred dollars annually in printing and postage costs for chapter mailings), I expressed the opinion that it was inappropriate for any professional society to establish a 501(c)(3) foundation, putting it on a par with charities that save and improve lives of the ill, poor, victimized or disaster-stricken. These foundations simply mirror or complement the mission of the professional society, and primarily serve their own membership. If they serve a function that is deemed invaluable to the profession, why not just raise the dues a few bucks to cover those costs. A duplicate bureaucracy and extensive fundraising efforts are wholly unnecessary and unconscionably wasteful.

    So, what should the AFP Foundation do? Turn its assets over to a real charity, fold its tent, and add another item to AFP’s Code of Ethics.

    That’s what Jeff Steele says.

    • Jeff, as always, I appreciate your willingness to share your thoughts. While I’ll let your comments stand on their own, generally, I do want to offer a very brief defense of the AFP Foundation. In recent years, the Foundation has become much more efficient. Curtis Deane tells me the cost per dollar raised has plummeted from 66 cents (Ouch!) to 13 cents (Yeah!). More contributions have come from non-members than was the case years ago. The “outside” dollars and the greater efficiency mean that the Foundation is able to offer AFP members increased value, provide educational opportunities to those who otherwise would not be able to afford certain programs, and to fund research that benefits all nonprofit organizations. In the past, when I served on the AFP Foundation board, I had grave concerns. I even spoke loudly about the need for the Foundation to get its act together or to “fold its tent.” Today, I believe the Foundation has become an asset to AFP, the profession, and the sector in general.

  2. I am in complete agreement with you on this issue. Our planned giving society is the easiest of all gift societies on campus to get into – membership in the Columns Society is open to any individual who has made provisions for the University of Memphis Foundation through any one of a variety of estate planning tools, including bequests in a will, charitable trusts, charitable gift annuities or gifts of life insurance. That opens the door to later conversations about statements of intent, campaign gifts, the value of publicity, etc., but there is no requirement for anything more than an admission that you belong. I sincerely doubt that anyone will lie to get into this society!

  3. I absolutely agree and would like to make a couple of points:

    – The Association has set this up to mirror organization/institution development programs. I personally know of none that have a minimum.

    – Whenever a minimum is stated, it becomes the de facto ceiling for most people.

    – Communication/Marketing — I didn’t know the Association had a planned giving/ Legacy program. Effectvely marketing the program should increase the numbers in the Legacy Society and possibility that overall raised will also increase.

    – Stewardship – Review program and see if there are places where costs could be lower without jeapordizing effectiveness. With bequests, you never know for sure until the person dies. So you have to make sure that your stewardship helps communicate/markets your program at the same time.

    – Most importantly, need to answer question: Is this a viable program for an association? Check with your constituency.

  4. At one point I had a supervisor that wanted me to establish (1) a gift minimum for membership, (2) a requirement of irrevocable status, plus (3) differing levels of membership/recognition based upon the amount of the promised gift. Clearly he didn’t understand planned giving. Fortunately, I was able to make the case that “Best Practices” and peer institutions didn’t have these requirements. I think it’s important to be inclusive.

    I do request a base level of documentation which can be as simple as a checked box and signature on a form stating that Chapman University is included in the donor’s will or living trust. No dollar disclosure required. Ideally, I like to have a copy of the designation page and the signature page on file. New members are typically pleased to provide this documentation, but I have discovered that longtime members seem less inclined to disclose.

  5. Michael,

    I completely agree with you that the legacy society really must be inclusive. My organization’s society is inclusive, as we don’t even ask most people how much their planned gift is valued at (unless it is something like an annuity, where we play a more active role in the process); we take pretty much the same thing that David mentioned above as “documentation.” I simply cannot imagine alienating potential donors like that by excluding them from the society.

    Thanks for this really interesting post!

    • Dan, thank you for taking the time to read my post and the comments. I appreciate your comments. It would be nice if the AFP Foundation changed course and elminated the minimum. At the very least, I hope they steer clear of the idea to raise the minimum.

  6. It is important to remember that the Legacy Society is not only for stewardship, but also a great cultivation tool. Therefore, it is essential to include everyone who indicates that they have included the organization in their estate plan, regardless of amount and regardless of documentation, in the legacy society. What possible motive could anyone have for fabricating a legacy gift intention? A reception once in awhile? A certificate? Getting their name on a list? Those are cultivation tools as well.

    Imagine a donor who said they had arranged a legacy gift — but hadn’t quite gotten around to actually going to their attorney or requesting that change of beneficiary form. Every time they get something from the Legacy Society they are reminded that they still need to get that gift plan done. If they had not been included …. no reminders and no sense of urgency or obligation. I think that is well worth the risk that they may not make the gift after all!

  7. Michael and Others,

    I read this post back in April and greatly appreciate Michael’s viewpoint on this issue. As a board member for the AFP Foundation, I chose not to comment at that time. However, I did take copious notes from the post and reader’s comments in preparation for our board debating this issue.

    I’m pleased to provide an update that at the AFP Foundation’s Summer board meeting, it was reported that the planned giving committee reviewing the minimum threshold overwhelmingly felt that increasing the threshold would be counter to best practices in fundraising. The PG committee didn’t move towards eliminating the current minimum that is in place for recognition. While this may not be the complete change of course for which Michael would advocate, let me elaborate how this small decision is much more meaningful than it may appear.

    The discussion here about PG gift minimums is simply a singular point of the competing role within all fundraising organizations of ensuring best use of dollars (ROI) while promoting effective donor stewardship. Add to that a major function of a “Foundation” as managing and stewarding long term funds, endowments, etc. and you get additional fodder to the ROI mindset. Another factor is the almost inordinate focus in recent years on “fundraising expenses” reported on 990s and third party “evaluations” of a nonprofit’s “effectiveness” based on this expense ratio and you get tremendous pressure to focus on ROI. These competing pressures can lead to an organization focusing perhaps too much on ROI…at the expense of meaningful donor cultivation …such as considering minimum gift amounts, etc.

    As background, the AFP Foundation is in the midst of a major strategic planning process that is leading to very positive changes at the Foundation. As the Foundation for the world’s leading association of professional fundraisers, we are cognizant of the imperative that we truly demonstrate “best practices” in all that we do. Unfortunately, like many nonprofits with limited staff, tight budgets and a dependence upon a cadre of volunteers to fulfill its mission, there is often a void between “best practices” and what actually occurs in the daily grind. In my career as a fundraiser and a consultant, I have yet to find the perfect shop fully implementing every best practice.

    As the Foundation completes the strategic plan this fall and begins implementing its major components, I can assure you that the Foundation’s leadership is looking at every aspect of the Foundation’s activities through the lens of ensuring donor relationships are chief and that the Foundation is demonstrating best practices to the fundraising community. We value your input, your patience, and we greatly value your support.

    PLEASE NOTE: This does not represent an official position of the AFP Foundation and is intended only to provide a conclusion with some insight to the discussion Michael presented. It should also be noted I do not serve on the PG committee and as such was not involved in the full discussions of this topic.

    • Robert, thank you very much for providing an update on this issue. I’m pleased to hear that the AFP Foundation decided not to raise the minimum threshold for recognition in the Omega Society. I think this is a wise move. I wish you and your colleagues the best as you work to develop a new strategic plan. Thank you for your service to the profession.


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