Almost everyone has the capacity to make a planned gift. Consider just these four facts:
- Among those ages 65 and older, 78 percent own their home (US Census)
- Most Americans own stock in one form or another (Gallup)
- Inflation-adjusted median household net worth grew 16 percent from 2013-16 (US Federal Reserve)
- 69 percent of Americans expect to leave an inheritance (Stelter)
The fact that most Americans have the ability to make a planned gift presents both a great opportunity and a profound challenge for fundraising professionals. With limited staff and budget resources, it is essential to focus legacy giving marketing where it will do the most good. So, who are the best planned giving prospects?
You can visualize the answer to that question as an equation:
Ability + Propensity + Social Capital = GIFT
Your best planned giving prospects will have the means with which to make a planned gift, ideally a sizeable one. However, just because they have the ability does not mean they will take the action you desire. A number of factors influence a prospect’s propensity for giving. Some of those factors might be related to the organization seeking a gift while other factors might have nothing to do with the organization. Finally, we need to consider a prospect’s level of social capital, their degree of engagement with the community and the organization. Someone who scores high in each category is more likely to make a planned gift than someone who scores low.
A simpler way to identify strong planned giving prospects is to recognize that “the most dominant factor in predicting charitable estate planning was not wealth, income, education, or even current giving or volunteering. By far, the dominant predictor of charitable estate planning was the absence of children,” according to philanthropy researcher Russell James, JD, PhD, CFP®. In other words, people who do not have children are far more likely to make a charitable planned gift than those who have children.
However, while the absence of children tells us who is generally more likely to make a planned gift, it does not tell us whether your organization will be the recipient of such a gift. The leading factor that will determine whether someone will make a planned gift to your organization is their level of loyalty, according to legacy researcher Claire Routely, PhD.
As you attempt to determine a prospect’s level of loyalty to your organization, you’ll want to consider a number of factors including:
- Annual Giving. Look for those who give more and give more often.
- Monthly Donors. These individuals tend to give an above average amount and, by virtue of monthly giving, contribute with high frequency.
- Volunteers. A volunteer who does not donate cash is about as likely to make a bequest gift as someone who gives cash but does not volunteer. Someone who does both is far more likely to make a planned gift.
- Engagement. Those who are most engaged with your organization will be most likely to make a planned gift. For example, current board members will be more likely to do so than past board members.
Once you identify your organization’s loyal supporters, you’ll also want to take into account other factors such as their individual ages. For example, if you want to market Charitable Gift Annuities, you’ll likely want to target those over the age of 60 or 65. If you want to encourage people to make a gift from their IRA, you’ll want to focus on those over age 70.5. If you want supporters to include your charity in their Wills, reach out to those who are age 40 and above. When it comes to Charitable Remainder Uni-Trusts, think about people who are in their early 70s or younger. For Charitable Lead Annuity Trusts, consider identifying supporters who have children age 35-55.
In general, Laura Fredricks, a fundraising consultant and internationally recognized author and speaker, describes the 10 major characteristics of the typical planned gift donor:
- They know about the organization and its mission, priorities, and direction.
- They have confidence in the leadership.
- They are satisfied with the organization’s fiscal management.
- They believe their gift will be perpetuated well into the future and that they will have a long and lasting legacy through the organization.
- They give when the time is right for them economically.
- They may have supported the organization in the past with smaller gifts, but a number of them will have no giving history with the organization.
- They possess the assets to give without compromising their economic comfort level.
- They want to ensure that their loved ones are taken care of in conjunction with the planned gift.
- They tend to make several planned gifts over their lifetime.
- They usually consult tax advisors, financial planners, attorneys, colleagues, and family members before making the gift.
Now that I’ve outlined the characteristics of your best planned giving prospects, I must point out that there is an excellent chance that your nonprofit will receive a planned gift from someone who does not meet the criteria I’ve outlined. So, to the degree your budget permits, you’ll want to make your planned giving messaging ubiquitous. In other words, include a planned giving tagline on your letterhead, post information on your website, include articles about legacy giving in your newsletters, give people the option to make a stock gift in your year-end appeals, etc.
While focusing your greatest energy on your best prospects, be sure to not ignore the broader market completely. The results just might surprise you.
For more information about how to identify your best planned giving prospects, checkout my book Donor-Centered Planned Gift Marketing. You’ll find plenty of research-based insights and practical real-world examples.
That’s what Michael Rosen says… What do you say?
Michael Rosen Says... 
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