Posts tagged ‘Charitable Bequest’

June 30, 2015

Free Webinar Will Help You Get Great Results

Fundraising can certainly be challenging. Have you ever wondered:

  • How can I raise more money at little or no extra cost?
  • Is my organization ready for a planned giving program?
  • What simple planned giving vehicles should I promote?
  • What is my organization’s Bequest giving potential?
  • Who are my best planned giving prospects?
  • Do I need to be an expert to do planned giving?
  • What motivates planned giving donors?
  • How should I ask for planned gifts?

If you’ve ever asked yourself any of those questions, then I have the perfect free webinar for you.

FreeI’m presenting “Planned Giving: It’s Easier than You Think!” During my free webinar, hosted by Wild Woman Fundraising, you’ll get answers to all of the above questions and more. In short, you’ll learn how to easily launch and grow a successful planned giving program.

For many nonprofit professionals, planned giving sounds complicated, with its CRUTs, CRATs, CLUTs, and CLATs. Admittedly, gift planning can indeed be incredibly complex. However, as this free webinar will demonstrate, it does not have to be. Furthermore, a planned giving program can be enormously worthwhile for virtually any organization, even those with little or no budget for it.

For valuable tips to help you grow your planned giving results, register for my free webinar today, “Planned Giving: It’s Easier than You Think!” [July 17, 2015, 3:00-4:00 PM (EDT)]. To register, CLICK HERE.

As a webinar participant, you will receive a number of bonus handouts including:

June 26, 2015

Are You Wasting Time by Hunting Unicorns?

Go to any fundraising conference, and you’ll find unicorn hunters. You might even be one. You can see the unicorn hunters in seminar sessions about Charitable Remainder Annuity Trusts (CRATs), Charitable Lead Trusts (CLTs), and Charitable Remainder Uni-Trusts (CRUTs).

Unicorn hunters believe that Trusts are the cornerstone to a healthy planned giving program. Unicorn hunters scour the wealthiest portion of their donor files to find Trust prospects and then focus an enormous amount of time and energy trying to close big Trust gifts.

Unicorn by Rob Boudon via FlickrSome would-be unicorn hunters are overwhelmed by the hunt. They fear they have no prospects and/or they fear they have insufficient knowledge to pursue such gifts. So, they don’t implement any kind of planned giving effort.

Well, here’s your reality check, courtesy of Giving USA 2015: The Annual Report on Philanthropy for the Year 2014.

As the chart below reveals, the number of Trusts is tiny compared to the number of Public Charities which stood at 963,234 in 2012 (not including religious congregations and organizations with less than $5,000 in revenue), according to the Urban Institute’s The Nonprofit Sector in Brief 2014.

Even if every single charity that received a Trust gift only received one, that would mean that less than 12 percent of charities would have received a Trust gift in 2012. In other words, the likelihood that a fundraiser will close a Trust gift is very small in any given year. Moreover, the odds have been getting smaller as the number of charities has grown while the number of Trusts has declined.

Of course, that’s not quite how it works in the real world. In the real world, large organizations with large donor files containing plenty of wealthy supporters are far more likely to close Trust gifts than smaller organizations with smaller donor lists. If you don’t work at a large, established organization, the chances that you’ll close a Trust gift this year are miniscule.

 Trust Chart - 2015

While the dollars associated with Trust gifts are certainly significant, the actual number of such gifts is small. By contrast, far more people name a charity in their will, make beneficiary designations, give appreciated securities or personal property, or donate from their IRAs.

Keeping your eyes open for Trust-gift opportunities can be beneficial. However, you’re much more likely to close other types of planned gifts. This means:

June 19, 2015

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:

June 16, 2015

Strong American Philanthropy at a Record High!

Americans donated an estimated $358.38 billion in 2014, surpassing the peak last seen before the Great Recession, according to the 60th anniversary edition of Giving USA, released today. That overall total slightly exceeds the benchmark year of 2007, when giving hit an estimated inflation-adjusted total of $355.17 billion. However, Individual giving has yet to recover fully.

The 2014 philanthropy total increased by 5.4 percent, when inflation adjusted, over the revised estimate of $339.94 billion that Americans donated in 2013. Giving has grown for each of the previous five years. The growth in 2014 significantly outpaces the average growth rate of 3.4 percent (inflation adjusted) during the past five-year period.

All four sources of contributions that comprise total giving increased in 2014:

  • Individuals (72 percent of the total, 4 percent inflation-adjusted increase)
  • Corporations (5 percent of the total, 11.9 percent inflation-adjusted increase)
  • Foundations (15 percent of the total, 8.2 percent inflation-adjusted increase)
  • Bequests (8 percent of the total, 13.6 inflation-adjusted increase)

Giving USA 8.5 x 11 Infographic“The 60 year high for total giving is a great story about resilience and perseverance,” says W. Keith Curtis, Chairman of the Giving USA Foundation and President of The Curtis Group. “It’s also interesting to consider that growth was across the board, even though criteria used to make decisions about giving differ for each source.”

When combining the Individual and Bequest numbers, we see that individuals contributed 80 percent of all dollars given to charity in 2014. If we include family foundation giving, individual philanthropy accounted for 87 percent of all dollars given in 2014, according to Patrick Rooney, PhD, Associate Dean for Academic Affairs and Research at the Indiana University Lilly Family School of Philanthropy. Large Individual gifts of $200 million or more accounted for a significant portion of the overall growth in Individual giving while the actual number of gifts over $1 million has decreased.

“We saw several very large gifts greater than $200 million — a few were greater than $500 million and one was nearly $2 billion — in 2014,” says Rooney. “The majority of these mega-gifts were given by relatively young tech entrepreneurs.”

Looking at the nine gift recipient categories, all but one saw an increase in giving:

April 17, 2015

Is It Better or Worse to Send More Appeals?

Part of me is definitely a fan of conventional wisdom. Come on. What’s not to like about wisdom?

On the other hand, part of me hates the notion that we should continue doing things because that’s the way they’ve always been done. All too often, conventional is code for mediocre.

In other words, I think it’s wise to regularly challenge conventional wisdom, so long as we do so thoughtfully and preferably with good data.

So, being a good fundraising nerd, I enjoyed reading a number of articles this week that explore how often charities should send appeals to donors.

Let’s start with the conventional wisdom:

The more appeals you send, the more money you will raise.

Change in Hands by Randy Willis via FlickrAndrew Olsen, CFRE, Vice President of Client Services at the Russ Reid Agency, tested the conventional wisdom. In his blog post “Fundraising Myth Busters: Solicitation Frequency,” Olsen concludes, “Don’t be afraid to add a solicitation or two to your annual line up. As this case shows, you stand to make a lot more money for your cause if you do!”

In his post, Olsen shared testing that was done for two nonprofit organizations:

  • In the first case, the organization went from five to 10 solicitations, and year-over-year revenue increased 123 percent.
  • The second organization increased from three to six solicitations, and year-over-year revenue increased 110 percent.

Given that the highly respected Russ Reid Agency conducted the tests, I had to take notice. However, Olsen’s post raised more questions for me than it answered:

  • While gross revenue increased in both test cases, did net revenue increase significantly?
  • What impact does increasing the number of appeals have on long-term donor retention?
  • How does increasing the number of appeals impact donor Lifetime Value (LTV).
  • If revenue went up, why stop at six or even 10 appeals? Why not send an appeal out monthly, weekly, daily, hourly? When should we stop?

With these questions nagging at me, I was relieved to see that direct-response guru Roger Craver wrote a four-part series on the subject for The Agitator blog (Note: The Agitator is now a paid subscription site.).

Craver looked at solicitation frequency a bit more closely than Olsen did. For example, he reported that the net income from successive appeals goes down after a point. He also showed evidence that some donors on a file are more receptive than others to multiple appeals. While not surprising, it is nice to see the data on this and have a chance to reflect on how screening for solicitation-frequency preference can affect net revenue. Craver shows that sending fewer appeals, particularly to certain individuals, can lead to greater net income.

March 10, 2015

Want a FREE Book? How about 2 FREE Books?

From time to time, I come across truly special offers that I’m pleased to share with you.

Today, I want to give you the chance to get not one, but two, FREE books about planned giving written by Texas Tech University researcher Russell James, JD, PhD, CFP:

Visual Planned Giving: An Introduction to the Law & Taxation of Charitable Gift Planning

Visual Planned GivingThis textbook is written specifically for fundraisers or financial advisors seeking to expand their knowledge about charitable gift planning. This introductory book addresses all of the major topics in planned giving law and taxation and features over 1,000 full-color illustrations and images that guide you through complex concepts in a visual and intuitive way. Distilled from his years of teaching Charitable Gift Planning at the undergraduate and graduate levels, James makes this topic accessible and enjoyable for the busy professional.

Here are some of the things you’ll learn:

• The secret to understanding planned giving

• A super simple introduction to taxes

• How to document charitable gifts

• Valuing charitable gifts of property

• Special techniques for donating retirement assets, private foundations and donor advised funds

• And much more!

The paperback version of this book retails for $187.98. However, you can get the electronic version for FREE thanks to my friends at MarketSmart, just click here.

American Charitable Bequest Demographics

This book provides an extensive review of the changing nature of American charitable estate planning from 1992-2012 and includes over 50 charts and graphs. James presents information in a simple, visual fashion with each page containing a graph or chart, comments on the importance of the information, and details about the methodology behind the data. Much of the information presented comes from a long-running, nationally-representative, longitudinal survey including information about the final estate distributions from over 10,000 survey respondents who have died during the study.

• Major sections include:

• National demographic trends

• Trends in charitable plans among those aged 55+

• Examination of matured plans of deceased respondents

• Timing of charitable plan changes

• And much more!

The electronic version of this book retails for $9.99. However, thanks to James, you can get it for FREE when you subscribe to this blog site in the right-hand column. You’ll receive an email confirmation of your subscription that will contain a link to the book. (I recognize that your privacy is important, so I assure you that your email address will never be sold.)

Now that I’ve saved you a bundle of money, I’d like to suggest some books you can purchase that will inspire and help you achieve greater results. When you make your purchase, usually at a discount, at The Nonprofit Bookstore (powered by Amazon), a portion of every sale will be donated to charity.

March 6, 2015

Stephen Pidgeon: What’s Holding Back Your Legacy Fundraising?

What is one of the major things holding back your legacy fundraising efforts?

It’s your own naivety.

You might not like that answer, but it’s the conclusion reached by veteran fundraising expert Stephen Pidgeon, the author of How to Love Your Donors (to Death). Pidgeon will be sharing his insights at the AFP International Fundraising Conference (Baltimore, March 29-31, 2015) in his session, “Bequest Asks: Getting it Right.”

So, why does Pidgeon think many fundraising professionals are naïve?

Because THEY don’t like to thinHow  to Love Your Donors (to Death)k about death, [fundraising professionals] assume everyone else is the same. Well, older people (those in their late 50’s and older) do think about death, and they do it perfectly maturely and with no fuss. And the older they get the more unexceptional it becomes. Indeed, supporters are often hugely grateful for the opportunity to make such a major contribution, albeit after they have died. It is a matter of immense pride to them that they have made the decision and sorted their affairs.

“I’d ask what right has some well paid, youthful charity executive (meaning in their mid-50s or younger!) to deny their best supporters the opportunity of such deep satisfaction. That’s patronising age-ism and when you get into your 60’s or older, nothing is more irritating. Casually mentioning the possibility of a bequest in a newsletter that is read by less than 20 percent of its circulation is NOT ‘…giving your best supporters the opportunity…’!”

The key when speaking with people about bequest giving is to do so in the right way. After all, you’re not helping them plan their funeral; you’re helping them build their legacy. (Be sure to read my post “One Word is Costing Your Fundraising Effort a Fortune” about the latest research findings reported by Dr. Russell James.)

Pidgeon also identifies another problem with bequest marketing:

January 23, 2015

Breaking News: Big Planned Giving Myth Busted!

Many nonprofit professionals have long believed that those who make charitable bequest commitments will be less likely to make an annual fund gift. The fear, held by CEOs and CFOs in particular, is that legacy gift donors will feel they have already done their part and, therefore, will no longer be receptive to annual appeals.

Now, new evidence busts that planned giving myth once and for all!

As researcher Russell James, JD, PhD, CFP will explain in an upcoming  free webinar hosted by MarketSmart, not only will legacy donors continue to support their favorite charities on an annual basis, their support will actually increase once they have made their planned gift commitment, as indicated in the following graph:

Current Giving Before and After Adding Charitable Estate Beneficiary

Among those who have added a charitable beneficiary to their estate plan, the average annual charitable giving before making the estate gift commitment was $4,210. After making the estate gift commitment, the average annual charitable giving jumped to $7,381! On the graph, the label “Mixed” means we do not know how much of the giving was before or after the addition of the charitable estate plan given the timing of the survey.

While making a planned gift commitment does not necessarily cause one to increase his or her annual giving to charities, the longitudinal evidence now reveals that it most definitely does not cause donors to decrease their annual charitable support.

Recognizing that the average annual giving amounts for this group are quite large, James notes:

January 16, 2015

Dying to Know How Much Bequest Income Your Charity will Receive?

I always enjoy hearing from my readers. Sometimes, they give voice to questions that I suspect many others have as well. For example, I heard recently from the Development Associate of a small nonprofit organization:

Hi, Michael. I enjoy your posts and blogs very much. Do you know of any statistics which tell how long it takes to see any benefit from a planned giving program? I work at a small organization and they want to put a dollar amount to be raised in the annual fund raising plan. Doesn’t common sense say you cannot expect a definite planned giving amount EVERY year? We are very small and really only capable of pursuing bequests. Are there statistics to support this in writing that I could use to share with my Board and CEO? Many thanks for all your informative and helpful posts!”

Regarding the first question about how long it will take a new planned giving program to become effective, I’ll provide the standard consultant’s answer: It depends. I’m actually not being flippant. The answer depends on a great number of variables including, but not limited to:

  • How many planned giving prospects are there?
  • How educated are they about planned giving?
  • What is the quality of the relationship that the organization has with prospective planned gift donors?
  • How old are the prospects?
  • How healthy are the prospects?
  • Do your prospects tend to have children and grandchildren?

The good news is that while we cannot easily predict when an organization will begin to benefit from a bequest giving program or how much money the program will produce by a particular date, we do know that the organization will benefit sooner as well as later. Even with deferred commitments such bequest gifts, charities will often begin to see a return within three to five years.

The Wizard by SeanMcGrath via FlickrThe second question also does not lend itself to an easy answer. However, as the Development Associate suspects, it is “common sense” to say that most organizations “cannot expect a definite planned giving amount EVERY year.”

Nevertheless, I know that this issue is not limited to this particular charity. I also know that it’s not limited to small charities. Not long ago, I learned of a much larger nonprofit organization that always budgets to receive $1 million of bequest revenue annually despite the objections of the group’s planned giving specialist.

So, what is the answer? How much, if anything, should organizations budget for planned giving support?

While large organizations with mature development programs might be able to forecast planned giving revenue with some degree of accuracy and safety, there is no way a small organization with no significant prior planned giving experience can do that. Budgeting on bequest revenue is generally problematic for the following reasons:

  • You don’t know how many individuals have already made a bequest commitment but simply have not told you.
  • You don’t know how many people would be willing to make a bequest commitment.
  • You don’t know how many people who have made a bequest commitment have changed their will to remove the charity.
  • You don’t know when people who have made a bequest commitment will die. While actuarial tables can provide some hint at this, the reality is that such tables are more reliable with larger groups rather than single individuals.
  • Many people who are willing to make a bequest commitment will not tell you the amount of that commitment. If the commitment is a percentage of estate, the donor will likely not even know how much will end up in the charity’s hands.

In short, with bequests in particular, there are too many unknowns. For a new planned giving program, regardless the size of the charity, projecting bequest revenue figures would simply be guesswork. Even for larger organizations with an established gift planning program, budgeting for planned giving revenue can be risky. For example, I know of one organization that budgeted for planned giving revenue but came up short resulting in an operating deficit. Ouch!

November 14, 2014

One Word is Costing Your Fundraising Effort a Fortune

If you’re like most nonprofit development professionals, you’re doing it. You’re using one particular word in your fundraising effort that is costing your nonprofit organization a fortune.

I have the research that proves it.

If you talk with prospects about and ask them for a “bequest” commitment, you’re leaving enormous sums of money on the table. That’s the conclusion of recently released data shared by Russell James, JD, PhD, CFP, a leading philanthropy researcher based at Texas Tech University.

wordsthatwork3-01James will be sharing his research-based insights during a free webinar hosted by MarketSmart, on Wednesday, November 19 at 1:00 PM (EST). Words That Work: The Phrases That Encourage Planned Giving will explore the words and phrases that inspire donors to give and give more. Conversely, James also will look at the words and phrases that development professionals traditionally use that are actually counter-productive, such as the word bequest.

Consider this: A 2014 survey of 1,418 individuals found that 23 percent of respondents were “interested now” in “making a gift to charity in my will.” By contrast, only 12 percent were “interested now” in “making a bequest gift to charity.”

In other words, talking about bequest giving cuts your chance of getting a bequest commitment nearly in half! For greater results, it’s better to use simple, approachable language. As James suggests, when communicating with donor prospects, it’s a good idea to imagine you’re talking with your grandmother.

Not only do the individual word choices we make have a massive impact on the money we raise, how we use simple phrases can likewise make a huge difference.

James recently reported that 3,000 actual testators in the UK, not simply survey takers, were randomly placed into one of three groups when speaking with an estate planner:

  1. No reference to charity.
  2. Would you like to leave any money to charity in your will?
  3. Many of our customers like to leave money to charity in their will. Are there any causes you’re passionate about?

When the estate planner did not raise the subject of charitable giving, five percent of testators initiated the inclusion of at least one charity. In the second group, which was asked about including a charity, 10.4 percent agreed to do so. Clearly, asking has a significant, positive impact. However, members of the third group, which heard that others were including charities in their will, were even more likely to make a commitment. Now, here’s one of the key findings: Among those in the third group, 15.4 percent included at least one charity in their estate plan.

The commercial sector refers to the simple phrasing used with the third group as the bandwagon effect or social-norm effect. People are more likely to take action if they know others are already doing so. As the research demonstrates, this principle holds true when encouraging people to include a charity in their estate plan.

Interestingly, the positive impact does not stop at just the percentage of folks willing to make a charitable plan.

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