Posts tagged ‘wealthy Americans’

July 26, 2013

Prospects Are Not Feeling Their “Wealth”

Seventy percent of people with investible assets of $1 million or more do NOT consider themselves “wealthy.”

That stunning news comes from The UBS Investor Watch for the third quarter of 2013. For the report, UBS surveyed 4,000 investors in the US.

The report also found that four out of five survey respondents are either supporting adult children or elderly parents to some degree.

The current edition of The UBS Investor Watch has significant implications for Poor Little Rich Girlnonprofit organizations and their fundraising programs, especially planned giving efforts.

This is particularly true if we take a moment to consider what other studies have revealed about perception of wealth and giving. Research projects have shown that many donors think that planned giving, even bequest commitments, are something that only wealthy people do.

For example, in one focus group study, The George Washington University learned that some alumni held the mistaken belief that bequests involve very large financial commitments from those who are very wealthy. As I describe in my book, Donor-Centered Planned Gift Marketing, three problems arise from this thinking:

First, prospects believe that bequest giving is simply not for them, but rather the wealthy—many who are truly wealthy do not perceive themselves as such and, instead, think of themselves as merely ‘comfortable.’ Second, while some prospects might be willing to give through a bequest, they might not actually do so because they feel their gift would be too insignificant to matter. Third, some prospects expressed embarrassment over the notion of giving a modest bequest gift while the perceived norm is much larger.”

As the UBS study shows, a great number of wealthy individuals do not consider themselves wealthy. As other studies have shown, many people think planned giving is something that only the wealthy do. This means that many people with significant assets will fail to make a planned gift believing it is not something for them.

So, how can nonprofits overcome this perception?

Charities do not need to convince people that they are truly wealthy when they do not think that to be the case. That would certainly be an awkward and unproductive conversation. Instead, nonprofit organizations must do a better job of educating prospects so that they understand that the organization needs and appreciates all planned gifts, assuming that’s the case.

As I share in my book:

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September 30, 2011

7 Things You Should Know about Seniors that You Probably Don’t

Photo by Visentico/Sento via Flickr

There are seven things you should know about older Americans that just might surprise you and help you with your fundraising efforts. U.S. Trust, Bank of America Private Wealth Management published the report U.S. Trust Insights on Wealth and Worth-TMbased on its 2011 survey of Americans with an average age of 61 and investable assets of at least $3 million.

There are now approximately 5.6 million households in the U.S. with more than $1 million in investable assets, including 4.8 million with $1 million to $4.99 million and 782,000 households with more than $5 million in investable assets, of which approximately 182,000 have greater than $10 million in investable assets.

Here’s what you need to know:

Of those with net worth of $3 million or more, 40 percent do not consider themselves “rich.” They may consider themselves “comfortable” or “financially secure,” but not “rich.” So, when speaking with those who you may consider to be wealthy, consider that they may not define themselves in the same way. So, be sure to speak their language. For example, many people think that a “bequest” is something that only rich people do and, therefore, there’s a good chance that they will not think this is an option for them since they’re not rich. When talking about a charitable bequest commitment, you might be far better off keeping it simple by talking about “supporting your favorite charity through your will.”

Older, wealthy Americans believe the most important use of wealth is to ensure financial security for themselves and their families. So, when speaking with these individuals, show them how philanthropic planning can benefit them and their families. For example, a Charitable Gift Annuity can provide them with an income for life. Or, a gift of appreciated stock rather than cash can help them avoid capital-gains tax. Also, be sure that donor prospects understand that you’re not seeking all or even a large portion of their wealth. Let them know that you understand the old adage that charity begins at home. By being donor-centered, you’ll have a happier prospect who will be much more willing to support your organization.

Among older, wealthy Americans, 40 percent say they do not have an estate plan that is comprehensive. There are many reasons for this. They may simply not have gotten around to it. They may not know what their options are. They may not know what the elements are of a comprehensive estate plan. They may not know to whom to turn for assistance. This presents you with an opportunity to be of service. You can educate these people and guide them to get their estate plan in order. In the process, you’ll have the opportunity to discuss how philanthropic planning can be an effective, desirable part of estate planning. And, you will earn the gratitude of those you assist.

Only about one-third (34 percent) of parents agree strongly that their children will be able to handle the inheritance they plan to leave them. This is an opportunity for you to show parents how they can structure their estates to confidently take care of their children while also benefiting their favorite charity. Again, by being of service to prospective donors, you can ultimately help your nonprofit organization.

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