15 Things You Might Not Know about Planned Giving

There’s a lot about planned giving that’s worth knowing and that can help you raise more money. Fortunately, it’s not necessarily all complicated.

Yes, vast differences exist from one planned giving program to the next. Some nonprofit organizations invest heavily in planned giving with dedicated staff and marketing. Other charities invest little and have development generalists talk with donors about gift planning from time-to-time. Despite the differences from one organization to another, there are a large number of points in common.

To help you be a more successful fundraising professional, I want to share 15 insights about planned giving:

1.  Almost everyone has the ability to make a planned gift. A common myth about planned giving is that it is just for rich people. However, that’s not the case. For example, anyone who owns a retirement account, a life insurance policy, appreciated stock, or a home can be a planned gift donor. As H. Gerry Lenfest, the mega-philanthropist, wrote in the Foreword to Donor-Centered Planned Gift Marketing,  “Planned gifts are the major gifts of the middle class.”

2.  The average age of someone who makes their first charitable bequest commitment is 40-50. Another misconception about planned giving is that it is something that old people engage in. While that’s true for certain planned gifts (e.g., gifts from an IRA, or gifts to set up a non-deferred Charitable Gift Annuity), donors of any age can create a charitable provision in their Will or set-up a Beneficiary Designation.

3.  High-income women are more likely than men to use complex gift planning tools. High-income women (those with an annual household income of $150,000 or more) are more likely than high-income men to seek expert financial advice. They are also more likely to establish Donor-Advised Funds or Charitable Remainder Trusts. So, do not ignore female prospects. Instead, be prepared to talk with high-income women about sophisticated giving options.

4.  Using a challenge grant for a planned gift appeal can create urgency leading to action. Research shows that people tend to avoid conversations or decisions involving their own demise. One way to shift the focus of the planned giving conversation from death is to use a challenge grant to encourage prospects to think about making a planned gift commitment so that the organization receives an extra benefit. A challenge grant also creates a sense of urgency that gives donors a reason to act now rather than further delay making a planned gift decision.

5.  Tax avoidance is NOT a powerful motivator for planned giving. With the passage of the new Federal tax code, many fundraising professionals have worried about the effect it will have on charitable giving. Fortunately, multiple research studies demonstrate that tax avoidance is not a significant motivation for planned giving. While tax policy might affect the amount of someone’s donation, it is unlikely to determine whether someone will make a planned gift to your charity. The primary reason for that is that donors can receive the same tax benefits regardless of which charity they give to. Therefore, the motivation for giving to your organization will involve other factors.

Recently, I wrote “10 Things You Might Not Know about Planned Giving” for The Non-Profit Fundraising Digest. In that post, I share some additional insights about planned giving including information from the latest academic research. You can read the post by clicking here.

For even more insights, helpful tips, and real-life examples, read Donor-Centered Planned Gift Marketing, my award-winning, bestselling book.

For three valuable and free resources from philanthropy researcher Dr. Russell James, click here.

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

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4 Comments to “15 Things You Might Not Know about Planned Giving”

  1. Great post as always!
    I hear the tax break myth a lot.

    • Danielle, thank you for your comment. As you well know, there’s no shortage when it comes to myths circulating around the nonprofit sector. That’s why we all need to be teachers with our colleagues as well as prospects and donors. Fundraising is about so much more than fundraising.

  2. The largest gifts a donor gives to an institution is often not cash. It’s assets and assets fund large planned gifts.

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