Are You Throwing Away Planned Gift Opportunities?

Since 1974, Charitable Bequest gifts have totaled seven to nine percent of overall philanthropic giving.

In 2014, Bequest revenue totaled $28.13 billion, accounting for eight percent of overall giving and an increase over 2013 of 13.6 percent (adjusted for inflation). These figures come from the recently released Giving USA 2015: The Annual Report on Philanthropy for the Year 2014.

Here are some questions to help you determine if your organization is getting its appropriate share of the Charitable Bequest pie:

Does your organization have a planned giving program?

If your organization has a planned giving program, good for you; skip to the next question.

LuMaxArt FS Collection Orange0128 by Scott Maxwell via FlickrIf your organization does not have a planned giving program, why not? The only valid reason for not promoting planned giving is that your organization does not have any individual donors. If your organization has individual donors, there’s no reason not to have a planned giving effort.

While smaller nonprofit organizations might not have elaborate, sophisticated planned giving programs, they can certainly promote Bequest giving, gifts through beneficiary designations, gifts of life insurance, donations from IRAs (when permitted by the government), contributions of appreciated stock, and gifts of personal property.

By promoting planned giving, even small charities can get a slice of the Bequest pie. Not only that, they can even help grow the pie. Just over five percent of Americans name a charity in their will. However, one-third say they would be willing to consider including a charity in their will. There is a massive chasm between these two figures. If more nonprofits ask more people for more planned gifts, we could see far more than five percent of Americans including a charity in their will.

To learn more about planned gifts any organization can seek and how to get them, register for my free webinar “Planned Giving: It’s Easier than You Think!,” hosted by Wild Woman Fundraising on July 17, 2015, 3:00 PM (ET) to 4:30 PM (ET).

Do you have a ROBUST planned giving program?

Okay, you have a planned giving program. Good. But, is it a robust effort or do you simply market passively or focus primarily on your wealthiest donors?

If you simply market passively and expect your donors to make a planned gift without being asked, you’re missing out on gifts your organization should be getting. Just like with any other type of fundraising, you actually have to ask for Bequest commitments if you want them.

If you focus only on your wealthiest, biggest donors, you’re missing a huge opportunity to grow your results. Yes, it’s true that wealthy donors leave the most to charities. In 2014, “estimated Bequest giving from estates with assets $1 million and above amounted to $22.12 billion,” according to Giving USA 2015, while “estimated Bequest giving from estates with assets below $1 million amounted to $6.01 billion.” However, there’s still a lot of money being raised from less wealthy supporters. And there is tremendous potential to raise even more from these individuals.

Here’s what Giving USA 2015 has to say about prospecting for Bequest intentions:

When identifying prospects for Bequest intentions, organizations often overlook the ‘key prospect pool.’ This pool is made up of donors who give small amounts consistently over a period of many years. Often organizations identify prospects for Bequest solicitations in the same way that they identify major gift prospects — by high previous gift amounts. While this constituent group should certainly not be overlooked, screening for long-term loyalty identifies a wider pool of Bequest prospects. Mine your database for those donors who have been giving small gifts ($5 to $50 per year) for a consistent number of years (five to ten). This will target those prospects who are very likely to give small gifts during their lifetime but large gifts at death.”

Here are some benchmarks to help you evaluate whether or not your planned giving program is robust or anemic:

  • Do Bequest gifts to your organization at least total seven to nine percent of all charitable gift dollars each year? That’s the national average.
  • How close are you to having one-third of your donors making a Bequest commitment? That’s the percentage of Americans who say they’d be willing to consider such a gift.
  • Use the free Bequest Potential Calculator you can find by clicking here. My algorithm incorporates input from Texas Tech philanthropy researcher Russell James, JD, PhD. The electronic version of my “Bequest Potential Worksheet,” from my book Donor-Centered Planned Gift Marketingwas developed by my friends at MarketSmart. So, has your organization realized its potential?

To maximize your planned giving program results, follow this advice from Giving USA 2015:

The largest nonprofits, especially arts and cultural organizations, hospitals, and universities, have long invested in planned giving programs — with investments being returned many times over. For many reasons, smaller nonprofits, including houses of worship, have failed to create appropriate and aggressive efforts to secure legacy gifts. Across the board, nonprofits must communicate the importance of planned giving to donors through in-person conversations and print and digital platforms. Personal appeals should stress that planned giving is ultimately about leaving a philanthropic legacy — making a long-term impact on an issue dear to their hearts.”

For loads of research-based planned gift marketing ideas for any organization, checkout my book Donor-Centered Planned Gift Marketing, available on Kindle or in paperback.

For valuable tips to help you grow your planned giving results, register for my free webinar, “Planned Giving: It’s Easier than You Think!,” hosted by Wild Woman Fundraising.

For information about how I can help you create or enhance your planned giving program, contact me directly.

Remember, if your donors pass away without making a Bequest commitment, you’ve lost an important opportunity forever. So, don’t throw away the opportunity to secure such gifts now while your donors are still here.

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

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9 Responses to “Are You Throwing Away Planned Gift Opportunities?”

  1. Michael – We have two thrift stores and have consistent in-kind givers. Would you consider them bequest prospects as well as those who have given cash over time? Of course, one can jump to the conclusion that if they are giving away nice goods, they perhaps have giving potential. (We have converted some to cash donors as well by deliberately asking.)

    • Patrick, thank you for your question. I believe that everyone who supports a nonprofit organization is a planned giving prospect. Now, that does not mean that your in-kind thrift shop donors will be your best prospects, it just means that they should be included in your ubiquitous planned gift marketing efforts. People do not need to give cash in order to be viable planned giving prospects. Consider this: researcher Dr. Russell James has found that those who only give cash and those who only volunteer are pretty much just as likely to make a bequest commitment. Those who do both are the best prospects and are far more likely to make a bequest commitment. You can checkout the graph in my post “Warning: US Volunteerism at a Decade Low!”

  2. Michael – we have a larger pool of people giving $25 for the past 10 years, what is the best way to cultivate these smaller donors?

    • Debbie, thank you for your question. There are a great many things you can do to cultivate your smaller donors. Before cultivating them for planned giving, you’ll want to cultivate them for giving in general. In other words, you want to make sure they keep giving. Some of the best things you can do to retain and cultivate donors is to thank them promptly and effectively, engage them, and let them know exactly how their gifts are making a difference. With those three things in place, I would also invite donors to become monthly donors and mid-level donors.

      For ideas on how to cultivate smaller donors for planned giving, I encourage you to checkout my book, Donor-Centered Planned Gift Marketing, which is full of easy to implement ideas. Newsletter articles about donors who have made a planned gift are one obvious idea. Site tours, seminars, donor recognition events can all be used to cultivate planned giving support. If you have email addresses for your donors, you can send monthly email newsletter with useful, donor-centered information. At an appropriate point, you can survey your donors to see who has already included your charity in their will, who has interest in possibly doing so (so you can continue to cultivate them), and who does not have an interest. You can even use mail and the telephone to ask donors to make a planned gift commitment.

      Before I wrap it up for now, I just want to add that you will want to get your board involved in gift planning BEFORE you turn to your lower-level donors. You’ll want to develop a case for planned giving support and, then, get your board’s buy-in. If you can’t enroll any board members in planned giving, then you’ll need to go back and develop a more compelling case for support. Once you have a group of board members committed to planned giving, you’ll be able to share that great news with the rest of your donors.

      I hope this has helped a bit.

  3. I’m with you almost all of the way.

    One line struck me as wrong, “Do Bequest gifts to your organization at least total seven to nine percent of all charitable gift dollars each year? That’s the national average.”

    Bequests may be 7-9% of overall charitable giving, but it’s wrong to assume that it’s an “average” that organizations should shoot for. That’s an overall figure for the sector, including organizations large and small. And including religious orders and nonprofit universities, which are “typical” (as dangerous a word as “average”) bequest recipients.

    This made me wonder if there’s a better way to come up with a nonprofits target bequest expectations. I’m thinking that rather than bequests’ overall ranking, it would be more appropriate to look at it in relation to individual giving.

    So, if individuals are about 74% of overall national giving, compared to bequests being about 8%, then we’d say bequests, overall, are about 11% of individual giving.

    Then, an organization can see if they’re doing well on bequests using that 11% of individuals figure.

    If individuals are 50% of your income, bequests “should be” 5.5%. If individuals are 25% of your income, bequests “should be” 2.75%. If individuals are 85% of your income, bequests “should be” 9%.

    What do you think? A little more complicated than asking, “Do Bequest gifts to your organization at least total seven to nine percent?” But maybe this formula gives the organization a bit more of a realistic goal?

    • Ken, thank you for suggesting another benchmarking idea. I like it. Unfortunately, one of the problems with averages (in either model), is that they are, well, averages. If we had data by type of charity and size of charity, we could build a model that would be more meaningful. However, even with the limitations of the available data, fundraisers and nonprofit managers can gain at least some insight about the health of their planned giving program relative to the rest of the nonprofit sector.

      By the way, giving by Individuals in 2014 amounted to 72 percent of overall giving.

  4. You don’t mention that almost 60% of all charitable bequests evaporate prior to probate…

    • Frazier, thank you for your comment. You’re right. I did not mention anything about Bequests that evaporate before probate. For that matter, I didn’t mention anything about donors who remove charities from their will prior to death. Instead, I focused on realized Bequest gifts.

      By the way, I also chose not to address the issue of Trusts gone wrong. For example, the United Jewish Appeal of New York is suing US Trust for mismanaging the Trust established by Bill Gottlieb and, allegedly, inappropriately drained by his heirs leaving only a modest portion for the charity, counter to the donor’s intent.

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