Posts tagged ‘Donor-Centered Planned Gift Marketing’

August 7, 2018

Mega-Philanthropist with Profound Legacy:H.F. “Gerry” Lenfest (1930 -2018)

H.F. “Gerry” Lenfest, cable-television pioneer, mega-philanthropist, and civic leader, has died at the age of 88. His extraordinary generosity and wisdom will have a lasting impact.

I had the privilege of knowing Gerry. I was especially honored that he provided the Foreword to my book, Donor-Centered Planned Gift Marketing. I want to share some of his astute words with you. However, I first want to tell you a bit about this great man and his exceptional life.

Gerry Lenfest (left) with Michael Rosen.

Gerry was not born into great wealth. He was born in Jacksonville, FL, and raised in Scarsdale, NY and later on the family farm in Hunterdon County, NJ. After his mother died when he was 13-years-old, his father sent him to the George School, a private boarding academy. A troubled student, he was invited not to return after just one year.

At his new school, young Gerry continued to be something of a juvenile delinquent, his own description. Finally, his father enrolled him at Mercersburg Academy where teenage Gerry began to excel.

Following high school, Gerry was directionless. He worked as a roughneck in North Dakota, a farm hand, and as a crew member on an oil tanker. Eventually, he attended Washington and Lee University where he received an undergraduate economics degree. He served in the U.S. Navy, rising to the rank of captain. In 1955, he married Marguerite Brooks, an elementary school teacher. Gerry went on to receive his law degree from Columbia University and, then, served with a prestigious New York law firm.

Walter Annenberg hired Gerry in 1965 to work at Triangle Publications, Inc., owner of Seventeen and TV Guide magazines, the Philadelphia Inquirer and Daily News newspapers, television and radio stations, and several cable television properties. With the help of loans and two investors, he bought two tiny cable systems from Annenberg in 1974 to start Lenfest Communications. In 2000, Gerry’s company had grown from 7,600 subscribers to over 1 million to become the 11th largest cable company in the nation. That same year, he sold the company to Comcast, netting $1.2 billion in the deal.

Gerry always attributed his great success to the skill and dedication of his various teams and good fortune, whether in business or with the nonprofit organizations he worked with. Knowing he owed much of his success in life to others motivated him, in turn, to help others.

The Lenfests signed on to The Giving Pledge, a movement of wealthy individuals who commit to donating the majority of their fortunes. Over more than two decades, the Lenfests have donated more than $1.3 billion to over 1,200 nonprofit organizations. The top 10 recipients of support from the Lenfests are (source: Philly.com):

ORGANIZATION DOLLARS IN MILLIONS
Columbia University 155.0
Lenfest Institute for Journalism 129.5
Mercersburg Academy 109.0
Philadelphia Museum of Art 107.3
Washington and Lee University  81.0
Museum of the American Revolution  63.0
Curtis Institute of Music  60.0
Lenfest (Pew) Ocean Program  53.3
Wilson College  40.0
Lenfest Scholars Program  32.0

In addition to his enormous philanthropy, Gerry served on a number of nonprofit boards including Columbia University, the Philadelphia Museum of Art, and the Museum of the American Revolution, which he helped create. In 2005, Gerry and Marguerite were awarded the Association of Fundraising Professionals Award for Outstanding Philanthropists.

You can read more about Gerry Lenfest’s extraordinary story by clicking here.

While I could say much, much more about Gerry and his tremendous, positive impact, I’d rather share some of Gerry’s own words with you. Gerry provides some sage advice for fundraising professionals about what they must do to secure significant contributions:

Knowing your prospects and understanding what motivates them are two critical steps in the [philanthropic] process. Quite simply, you cannot skip cultivation and relationship building and expect a successful outcome.”

Lenfest was also keenly aware that the fundraising process should not end when an organization receives a donation. He advises:

Do not make the mistake of forgetting about us once you receive our gift commitment. We may truly appreciate how efficiently and effectively you handle contributed funds so much that we entrust you with another [donation]. We are also in a position to influence others to do the same.”

As a strong advocate for planned giving, Gerry observes:

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July 13, 2018

How to Take the Guesswork Out of Fundraising

Many nonprofit professionals think that fundraising is an art. They rely upon conventional wisdom, best practices, what feels right, what they themselves like, what their boss likes. They often guess about how they can be more effective.

Yes, fundraising is an art. However, thinking of it only as an art will limit your success. Guessing about what might work, and relying on trial and error to find what will work, can be costly.

While fundraising is an art, it is also very much a science. Because fundraising is also a science, there’s plenty of solid research that can guide our efforts. In other words, you don’t need to rely on your gut to figure out the best fundraising approach.

As the winner of the Association of Fundraising Professionals-Skystone Partners Prize for Research in Philanthropy and Fundraising for my bestselling book Donor-Centered Planned Gift Marketing, I’m admittedly biased regarding the value of scientific inquiry for the nonprofit sector. Nevertheless, I recognize that it’s not always easy to find valid research reports on a given subject. Furthermore, busy fundraising professionals seldom have enough time to read all of the terrific studies that are now available.

Well, I have some great news for you! The folks at the University of Plymouth Hartsook Centre for Sustainable Philanthropy have prepared a literature review, commissioned by Legacy Voice. Authored by Dr. Claire Routley, Prof. Adrian Sargeant, and Harriet Day, the report will help you take the guesswork out of planned giving. Everything Research Can Tell Us about Legacy Giving in 2018 “is [an] in-depth report, compiled from more than 150 papers across fundraising, marketing, sociology, psychology and behavioural economics, available to anyone working in the not-for-profit sector free of charge,” writes Ashley Rowthorn, Managing Director of Legacy Voice.

In the Foreword of the report, Prof. Russell James III, JD, PhD, CFP® says:

It is wonderfully encouraging to read this review of research on legacy giving, and to know that it will be available for so many who can benefit from the work. Such a work is timely, significant, and much needed. Fundamentally, two things we know about legacy giving are that it is important, and it is different…. [The] possibility of dramatic expansion [in planned giving] starts with learning how legacy giving and legacy fundraising works. That starts with this excellent summary of what we know.”

Here are just seven tidbits from the report:

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May 30, 2018

Download FREE Insights about Women in Philanthropy

Women aren’t just important to philanthropy, they’re increasingly important. Let’s look at just some of the insights provided by Optimy in a new whitepaper, Women in Philanthropy.

Women are enthusiastic donors. Consider some of these statistics:

  • 64% of donations are made by women
  • 63% of donations on Giving Tuesday were made by women
  • 3.5% is the average amount of their wealth that women donate while for men it is 1.5%

While men contribute generously to nonprofit organizations, women are building and acquiring greater levels of wealth that will allow them to be larger donors. Here are just a few facts to contemplate:

  • 57% increase in female-owned firms
  • 45% of American millionaires are now women
  • 2/3 of the total American wealth will be controlled by women in 2030

Beyond traditional individual giving, women are also playing a greater role in philanthropy because of the growth in Giving Circles:

  • 46.1% of Giving Circles were launched since 2010
  • Of the 706 Giving Circles reviewed, women lead 640

When it comes to foundation giving, women have more power than ever before:

  • In 1974, 15% of foundation staff were women
  • In 2015, 77% of foundation professional staff were women

For more insights from Optimy about the role of women in philanthropy and a look at what motivates female donors, download the FREE report by clicking here.

When it comes to planned giving, there are also significant gender differences. I pointed out some of them in my post “Men v. Women: Who are the Best Planned Giving Prospects?” and in my book Donor-Centered Planned Gift Marketing where I cited a Fidelity Charitable Gift Fund study:

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May 3, 2018

Who Wins as a Result of New ACGA Decision?

For the first time since 2012, the American Council on Gift Annuities has approved an increase of its suggested maximum payout rates for Charitable Gift Annuities. The rates will be rising by 0.30 to 0.50 percent for those ages where most annuity contracts are done. The ACGA will publish the final rate schedules by May 15, with the new rates becoming effective on July 1, 2018.

The rate increase will make donors the winners of the ACGA decision. Beginning in the second half of the year, CGA donors will be able to receive more income than they previously could in recent years.

A CGA is a gift mechanism that allows donors to make a gift to charity, and then receive an income for life. A CGA contract sets the rate and terms with the donor. The rate is dependent on the age and gender of the annuitant(s), and the number of annuitants.

For charities, the higher CGA payout rates will make this planned-giving instrument more attractive to donors and, therefore, could generate more gifts. So, charities are another winner.

The ACGA summarizes what conditions its board considered when setting the new rates:

Generally speaking, the ACGA’s suggested maximum rates are designed to produce a target gift for charity at the conclusion of the contract equal to 50 percent of the funds contributed for the annuity. The rates are further predicated on the following:

An annuitant mortality assumption equal to a 50/50 blended of male and female mortality under the 2012 Individual Annuity Reserving Table (the 2012 IAR);

A gross investment return expectation of 4.75 percent (which is up from the previous return assumption of 4.25 percent) per year on the charity’s gift annuity funds;

An expense assumption of 1 percent per year.”

If your organization has a CGA program, you’ll want to reach-out to your prospects and donors to let them know about the CGA opportunity and higher rates. The new rate schedule provides a good reason to contact people about CGAs.

When communicating with people about CGAs, remember to encourage them to think about establishing a CGA with a gift of appreciated property (e.g., stocks, bonds, real estate). This will provide the donor with the added benefit of avoiding capital gains tax. Your organization will also benefit. Nonprofits that experienced greatest growth in their CGA programs, as well as average CGA gift size, emphasized gifts of appreciated property compared to cash, according to a recent ACGA report.

If your organization does not already have a CGA program, you might want to consider starting one. While managing an in-house CGA program can be administratively burdensome, there are third-party organizations (i.e., community foundations) that can administer your program for you.

Whether you manage the program in-house or out-source it, your organization will still be legally responsible for making payments to donors. While the CGA rates are designed to allow approximately 50 percent of a gift to ultimately go to the charity, there are many instances (particularly during the Great Recession) when that was not the case and charities received less than 50 percent, nothing, or were in a negative position. CGA programs are not without risk.

When marketing your CGA program, be careful to avoid a common mistake:

Do NOT sell CGAs as investments.

There are three reasons to avoid “selling” CGAs as an investment:

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April 20, 2018

Do Not Make this Big Error with Your Next Challenge Grant

I’ve seen it frequently. Fundraising professionals often make a big error when using a challenge grant. And they compound that error unethically by misleading prospective donors. It’s a common issue that is costing the nonprofit sector a fortune.

What’s the huge mistake? Fabrication of a bogus challenge grant.

True challenge grants are great. When a fundraising professional inspires a donor to provide a challenge grant, the nonprofit has a powerful tool to encourage greater contributions when making an appeal.

Typically, a challenge grant will match new and increased support to a charity. Oftentimes, the match will be dollar-for-dollar, though other multiples can also be arranged. In the case of a dollar-for-dollar challenge, if a new donor gives $100, the challenge-grant donor will give the charity $100. If a $50 donor from last year gives $75 this year, the challenge-grant donor will give $25. Typical challenge grants are not unlimited; the donor will set a maximum total amount.

Using a challenge grant can be an excellent fundraising tool for four reasons:

1.  It encourages donor support by increasing the value of donations. For example, with a one-to-one match, new donors have their contributions effectively doubled, thereby significantly magnifying the impact donors can have.

2. It encourages donor support because donors do not want the organization to lose money. If a donor makes a new or increased gift, the charity will receive additional money from the challenge-grant donor. However, the converse is also potentially true.

If a donor does not give, the charity could lose out on some of the challenge grant. Therefore, while a challenge grant can increase the value of a donor’s gift, it can also create the impression of a cost to the organization if the donor does not give. Some donors are motivated by the concern, “If I don’t give my $125, the organization could miss out on another $125 from the challenge-grant donor. I don’t want to cost the organization $125.”

3.  It creates a sense of urgency to give now. Typically, challenge grants must be fulfilled within a narrow time-frame. So, prospective donors are encouraged to act now rather than delay their philanthropic decision. The sooner someone gives in response to an appeal, the more likely they are to give. People who set an appeal aside thinking they’ll get to it later, often do not.

The urgency created by a challenge grant is also useful for planned giving campaigns encouraging donors to include the charity in their Will (Charitable Bequest). People do not like to think about end-of-life planning, so it’s easy for them to keep delaying until it’s too late. A challenge grant creates a sense of urgency that can overcome what social scientists call personal mortality salience.

You can read about a fantastic challenge-grant campaign for planned giving in my book, Donor-Centered Planned Gift Marketing, beginning on page 188.

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April 13, 2018

Why are Fundraising Results Missing the Mark?

The nonprofit sector has an unfortunate secret. While not a well-kept secret, it is nevertheless something that receives too little attention. So, let’s take a moment to shine a spotlight on the issue.

Overall, American philanthropy has remained at approximately two percent of Gross Domestic Product for over six decades, with the percentage bouncing between 1.6 and 2.3 percent, according to Giving USA. Every year when the amount of money donated to charities goes up, the nonprofit sector pats itself on the back even though it is merely keeping pace with GDP.

Despite the massive growth in the number of nonprofit organizations, the significant increase in availability of educational materials, the production of helpful research, the professionalization of the fundraising field, and the rise of new technologies, the nonprofit sector has failed to budge philanthropy relative to GDP.

Now, as a committee convened by The Giving Institute begins to consider ways to grow philanthropy beyond the two-percent-of-GDP mark, I’ve written an article for the Association of Fundraising Professionals magazine, Advancing Philanthropy, that explores the challenge: “What Will It Take to Dramatically Increase Philanthropy?”

To answer that question, we need to understand how and why past attempts to do so have come up short, such as the insightful work of the Commission on Private Philanthropy and Public Needs in the 1970s.

We also need to understand the broad societal cultural factors that are affecting philanthropy so that we can develop strategies for inspiring cultural change and/or adapt to factors beyond our control (e.g., decline in religious affiliation, erosion of social capital, drop in volunteerism, etc.). Furthermore, we need to understand the cultural issues within the nonprofit sector that block change and, ultimately, greater success.

We also must set a realistic, consensus goal for moving the philanthropic needle. While that goal should be bold, it should also be based on something other than a dream. A credible target mark will give us all something to shoot for.

As Henry David Thoreau once wrote:

In the long-run, [people] hit only what they aim at.”

While it will likely take at least a couple of years for The Giving Institute’s commission to do its work, you and I do not need to wait. There are things we can do now to begin to move closer to a more vital philanthropic mark, something greater than two percent of GDP:

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April 9, 2018

8 Simple Tips to Boost Planned Giving Results

Planned Giving is a vital source of contributions for the nonprofit sector. Organizations that do not have a gift-planning program envy those that do. Those that do have a planned-giving program want even better results.

It’s no wonder.

Bequest giving amounted to eight percent of all charitable donations in 2016 (Giving USA). That’s just counting people who included a charity in their Will. It does not include people who gave through Beneficiary Designation, Charitable Gift Annuity, Stock, Appreciated Personal Property, or other planned-giving vehicles.

While planned giving can certainly present challenges, there are many simple things you can do to create or enhance your organization’s gift-planning efforts:

1.  Focus Your Efforts

You likely do not have the time or budget to reach-out personally to every one of your organization’s supporters to seek a planned gift. Instead, you need to focus on the highest priority prospects, those most likely to make a planned gift.

So, who are your best planned-giving prospects?

The answer to that question will depend on what type of planned gift you are seeking. For example, if you want more people to include your charity in their Will, arguably the most common form of planned giving, you’ll want to consider two key factors:

First, people who are childless are far more likely to include a charity in their Will, according to philanthropy researcher Russell James, JD, PhD, CFP®. However, just because someone is more likely to make a Charitable Bequest commitment to a charity does not mean they will be willing to commit to your charity.

Second, loyal supporters of your organization are the people most likely to make a planned gift to your specific organization, according to UK-based philanthropy researcher Claire Routley, PhD. Your loyal supporters are people who donate frequently, regardless of gift amount. Loyal supporters are also people who volunteer. People who donate cash and volunteer are nearly twice as likely to make a gift through their Will compared to individuals who do only one or the other, James’ has discovered.

When seeking other types of planned gifts, you’ll want to take into account other factors. For example, if you want people to contribute from their IRA, you’ll want to appeal to people over the age of 70.5, the age of eligibility for such giving. If you want folks to donate appreciated Stock, you’ll broaden your audience because the majority of Americans own Stock.

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March 21, 2018

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.

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January 12, 2018

Hang-on to the Holiday Spirit with FREE Gifts and Resources to Raise More Money!

For most of us, whether we observe Hanukkah, Christmas, or just the New Year, the holiday season is an uplifting time full of joy. However, the same cannot always be said of the post-holiday period, according to Linda Walter, LCSW. Her article in Psychology Today cites many reasons for the post-holiday blahs, for some, even depression.

As an antidote for the after-holiday letdown, I want to share several free resources with you that just might help you keep the holiday spirit going while also helping you raise more money in 2018.

The Donor-Advised Fund Widget. For starters, let me tell you about the Donor-Advised Fund Widget created and offered free-of-charge by the generous folks at MarketSmart. This useful, free gift will help you continue to celebrate the season and raise more money for your nonprofit organization.

When it comes to fundraising, a general rule is: Make it easy for people to give your organization money. You probably already do this in a number of ways. For example, your organization probably allows donors to place gifts on their credit card, mail a check in a business reply envelope you supply, give online, or contribute when they buy products (e.g., Amazon Smile).

So, why not also make it easy for someone to recommend a donation from his or her DAF account?

Rather than viewing DAFs as enemies that divert vitally needed funds away from charities, nonprofit organizations should view DAFs as a great fundraising opportunity. Unfortunately, the problem is that nonprofits have not made it easy for people to donate from their DAF accounts…until now.

Greg Warner, Founder and CEO of MarketSmart, says:

Amazon is successful primarily because they make it easy to buy stuff. Similarly, if nonprofits just made it easy to transfer DAF money, the bottleneck would get un-clogged. But no one was stepping up. So I did!”

The DAF Widget goes on your organization’s website. Your donors with DAF accounts then can easily find their account management company from a comprehensive list of over 800 service providers. Then, they simply click to go directly to their DAF management company’s website where they can enter the relevant information to make a donation recommendation for your organization. To see the widget live, visit the Navy-Marine Corps Relief Society website by clicking here.

DAFs are an increasingly valuable source of donations for charities. Consider the following market-wide insights from The National Philanthropic Trust 2017 Donor-Advised Fund Report:

  2012 2016
Number of DAF Accounts 204,704 284,965
Total Assets in DAF Accounts $44.71 billion $85,15 billion
Grants from DAF Accounts $8.5 billion $15.75 billion
Ave. DAF Asset Size $218,413 $298,809

To put the above figures into context, non-corporate private foundations gave $45.15 billion to charities in 2016. By contrast, donations made from DAFs totaled $15.75 billion that same year, equating to roughly one-third (34.8 percent) of the estimated amount granted by non-corporate private foundations.

In other words, DAF donations represent a significant and growing source of gifts for nonprofit organizations. However, to get your share, you need to make it easy for people to recommend donations from their DAF accounts. That’s why MarketSmart created the free DAF Widget.

You can learn more about the DAF Widget and claim yours by clicking here.

There is just one catch, if you want to call it that. The DAF Widget is in its Beta Edition. So, MarketSmart is looking for feedback, either directly or through comments below. Then, Greg promises to invest more time and money to make the DAF Widget even better. So, if you use the DAF Widget, please let us know how you think it could be made easier to use and more effective.

Here are seven additional resources for you to help get 2018 off to a great start:

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December 15, 2017

Avoid a Big Misstep Now to Raise More Money in 2018

Fundraising can be complex and challenging. We need to consider strategies, tactics, technology, staffing, budget, and so much more.

What if I could help you cut through all of the clutter, so you can avoid a big misstep now and raise more money in 2018?

Well, here you go:

If you want to raise more money, do not fail to send a proper thank-you letter.

It’s pretty simple, right? I think it is. Unfortunately, so many nonprofit organizations mess up this important step in the development process either by not sending a thank-you letter at all or by simply dashing off a letter with little thought. While professional fundraisers expend considerable effort to master the complexities of the fundraising process, many stumble when it comes to something as simple as the thank-you. Don’t be one of those fundraisers.

The thank-you letter is an essential part of a sound stewardship program. Every donor should receive a thank-you communication. It amazes me that some organizations still refuse to send thank-you letters to lower-level donors. Sending a simple receipt is not the same as a thank you.

A wise person once observed that the most important communication a donor will receive from you is the first thank you after the first gift. At that point, many donors will decide whether to ever make another gift to your organization.

So, what are the three essential principles of a great thank-you letter?

1. Immediacy.

The first rule of effective thank-you letters is: Be sure to send them. The corollary is: Be sure to send them immediately, within three to seven days of the gift coming in. If you delay, donors will likely think that you do not need their money or that you do not truly appreciate them. Wise organizations that don’t have the infrastructure to do this will outsource the gift acknowledgment process recognizing that it’s a worthwhile investment.

2. Caring.

Let your donors know you care. You can do this by sending a thank-you letter out on a timely basis. In addition, make sure you spell the donor’s name correctly, acknowledge the amount received, encourage the donor to contact you with any comments or questions, include an appropriate gift receipt and tax information. If your organization hosts events or programs for the public (i.e., a theater company that has a new stage show about to open), take the opportunity to share this information with your donor. These are just some of the things you can do to show you care.

You should also remember that a thank-you letter is not another solicitation piece. So, don’t appear ungrateful by asking for more money or enclosing a gift envelope. I know this is a controversial issue so, for more about this, read “Can a Thank-You Letter Contain an Ask?”

3. Meaningfulness.

Don’t just send a simple thank-you letter that shows you didn’t spend much time thinking about it or drafting it. One way to force yourself to be a bit creative when writing a thank-you letter is to not use the words “thank you” in the first sentence. This prohibition will slow you down and force you to be more thoughtful when writing the letter.

Another tip is to remind donors of the impact their gifts will have. Better yet, tell them how their gift is already being put to good use.

Whenever possible, hand sign the thank-you letters. Even better, hand sign the letters and write a short P.S. This will go a surprisingly long way in building a meaningful relationship with the donor.

For her book Donor Centered Fundraising, Penelope Burk reviewed hundreds of thank-you letters. Based on her analysis, she outlined 20 attributes of great thank-you letters. I felt so strongly about her list that I cited it in my own book, Donor-Centered Planned Gift Marketing:

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