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 organi
zation 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?”
6. Women are more likely to give a bequest to religious, health, human services, and environmental organizations than men.
7. Those without children are far more likely to make a planned gift. The presence or lack of children is the greatest indicator of whether or not someone will make a charitable bequest commitment.
8. Only 5.3 percent of those over 50 have made a charitable bequest commitment.
9. 33 percent of Americans are willing to consider a charitable bequest. This means that there is a great deal of untapped potential.
10. While 1 percent of Americans have created a Charitable Remainder Trust, 5 percent are willing to consider one. Again, this reveals that there is a fair amount of untapped giving potential.
11. Among those over 30, only 22 percent say they have been asked for a planned gift. This could explain why there’s so much untapped potential.
12. Once donors name a charity in their will, they almost never remove it. It’s solid stewardship practices that will minimize the defection rate.
13. Only 37 percent of those over 30 are familiar with the term “planned giving.” So, while we may use the term internally, we should be careful how we use the term in public. It’s usually better to talk specifically with donors about what you want. For example, if you want the donor to include your organization in his will, say that. If you want a donor to establish a charitable gift annuity, say that.
14. Real donor stories work much better than fictional, composite stories. Real stories can touch the emotions in ways a composite story simply cannot.
15. For ads and letters to those over 40, a larger font is needed to get them read. If people have to struggle to read something or go hunting for their reading glasses, the chances that they will indeed read the item are greatly reduced. Respect your older prospects and their older eyes.
16. Using a challenge grant for a planned gift appeal can create urgency leading to action. This was a lesson learned by the National Resources Defense Council that I reported on in my post “Can Direct Mail Secure Impressive Planned Gifts?”
17. Donors usually give to things or causes that are important to them, not for the benefits. So, when talking to prospects about planned giving, focus on their motivations.
18. The best source for information about a prospect is the prospect. People love to talk about themselves, so we need to be good listeners. We’ll learn a lot. But, even if a prospect is reserved, we can still learn a great deal from them. For example, when meeting with a prospect in her home, we can look for all kinds of clues. For example, are there photos of children and grandchildren, is the home worth a great deal, is there art on the walls, etc.? Of course, remember that being an observer is different than being a snoop.
19. Tax avoidance is not a powerful motivator for planned giving. While some donors might be interested in structuring a gift in the most tax-advantaged way possible, it is not why they will give to your organization. That’s because they can probably get the same benefits going to any other nonprofit organization in town. So, while tax avoidance might be a motivator in general, it has little or nothing to do with what motivates a donor to give to your specific organization.
20. Organizations will not usually get the gift unless they ask for it. So, ask!
That’s what Michael Rosen says… What do you say?
Michael Rosen Says... 