Planned Giving

Nonprofits are often so busy thinking about today, that they do not have a lot of time to think about tomorrow. Thinking and working on planned giving often gets pushed to the wayside for more pressing matters. Planned giving, however, can create a substantial, long term gain for your organization. If your nonprofit already has a strong base of donors that you feel you have cultivated with good stewarded relationships, you may want to consider working on a planned giving campaign.

What is planned giving?

Planned giving is a process in which a donor makes a substantial gift, within his or her lifetime or upon his or her death, as part of their financial or estate plan. Donations given out of an individual’s cash flow or discretionary income are not considered planned gifts. Planned giving can take many forms, including appreciated assets, artwork, life insurance policies, real estate, as well as the creation of charitable trusts. For donors, it connects their philanthropic goals with their financial and estate planning goals, in addition to connecting donors to an organization that they feel is special.

Planning giving is not just for the wealthy. Indeed planned giving is often how middle class individuals make major gifts. It should also be noted that planned giving does not affect annual giving. In fact, legacy benefactors feel a strong sense of connection to the organizations that they invest it, often increasing their annual donations. Planned giving accounts for about 9% of overall philanthropy in the USA. Does your organization receive 9% of its revenue from planned giving? If not, you should consider a planned giving campaign.

How do you start a planned giving campaign?

1) Cultivation and Stewardship

A planned giving campaign is part of an organization’s overall fundraising strategy and is connected to donor cultivation and stewardship. If your organization does not have a developed cultivation and stewardship process, start there and develop your relationships before moving on.

If you have a strong base and developed relationships, you do not need to defer planned giving! Continue your strong cultivation and stewardship and began to identify individuals as planned giving prospects. It is important to understand how to identify potential planned giving prospects. Almost anyone has the ability to plan a gift. Bequests (gifts in wills) are how the middle class give planned gifts. Wealth is not in cash alone but is held in assets that may be not visibly seen (think: real estate, retirement funds). You, however, do need to steward a strong relationship with your planned giving prospects. You want to find loyal donors. Identifying those that give more often than annually (think: monthly donors) and those that volunteer in addition to donating. The most common age to make planned gift designations is between 40-50 years old. Finally, those without children are more likely to make planned gifts.

2) Research

Do some initial research. Learn about your state laws. Read your organization's gift policy, if you have one. Understand the various types of gifts and what they mean (cash, appreciated securities, savings bonds, bank accounts, jointly held accounts, life insurance, IRAs, CDs). Does your organization have any policies against particular gifts? Talk to a lawyer who specialized in estate planning or wills and last testaments to learn about planned gifts so that you may better answer prospect questions. In addition, is your organization prepared to accept particular gifts? Do you know what you would do if gifted real estate or artwork? Do you know the various tax benefits of different types of gifts? Who at the organization will be the leader in planned giving and answer prospect questions? Before you develop your campaign, develop your organization’s infrastructure and policies to be ready to accept a gift.

While researching planned giving may make the process seem more complicated, an easy way to start the campaign without having to know every option is to start by only accepting bequests or gifts in a will.

3) Write

Write up a 1-2 page document on planned giving and your value proposition. Post it on your website and print out versions to give to prospects in a flyer or brochure. Create a website page for planning giving (think: “Other ways to Give”). Use language like, “gift in your will” rather than “bequest.” Look at large nonprofit charities for examples (American Cancer Society, Medecins Sans Frontiers, etc.). Find a small way to include a note about planning giving on everything your organization does (think: footer link to planned giving page "remember us in your will." Remember to mention your vision and long term goals, as well as value proposition. Avoiding taxes are not a major consideration for planned giving. Donors want to make a philanthropic difference to an organization that makes a difference and they value.

Before you actively start the campaign (as well as any other fundraising campaign), you will want to ensure that your website is generally up to date for individuals that want to spend more time learning about your organization.

4) Outreach

Planned giving is similar to any other fundraising effort, you must make the ask and a coordinated ask is always better. Think about your various forms of communication from your website, social media, emails, and direct mails. You can begin to include a link to your planned giving page in newsletters or at the bottom of other emails and direct mailers. Only using passive approaches to planned giving will not create the trusting relationship you need with a donor.

You must make active asks of your designated prospects. First, you can ask your current and past board members. (Think stewardship: When was the last time your reached out to past board members? If it was a while ago or never, you do not start with planned giving but stewardship). Within donor stewardship activities, you can bring your planned giving brochure with you to coffee with the individual prospects. If you do not want to conduct one-on-ones with prospects, consider a free, small special event to target 10-30 mid-level to major donors that you have identified. Invite them to learn about your vision for the future and why you are unique. As with any contact or asks, make sure you follow up with each prospect 2-3 weeks later.

It is important to note that less than 40% of Americans have an understanding of what planned giving actually means and far less have ever been asked. So you may need to educate your donors and talk generally about their philanthropic goals, how planned giving methods can help accomplish those goals, and why almost anyone can make a planned gift.

2) Recognize

You should create a Legacy or champion club for those that make a planned gift to your organization. They may want special recognition on your website, within marketing materials, and at your special events.

Planned gifts can start off simple. Yet, you must have donors that value you. Look at your donor base and work on your stewardship. If you are ready to begin a planned giving campaign, research, write, outreach, and recognize.

For more information on developing a Planned Gift Campaign or developing a financial development plan, contact New Nile Consulting.

Want to donate to an charity, but don't know who?

It’s the end of the year and many people are looking for nonprofits to donate to. But which one? Knowing which nonprofit to donate to can be annoying. There are so many out there!

First, you need to know your own goals. Why are you donating and what effect do you want to make in the long run? What are your personal interests? Decide if the geographical location matters to you, in order to narrow your choices.

You can use Charity Navigator or Guidestar to get an idea. Charity Navigator focuses on large organizations and may only highlight organizations with problems after they become public. They also flag organizations that spend significant amount of their budgets on fundraising versus mission programming. They are not enough, however.

You can also use GiveWell or The Center for High Impact Philanthropy. These organizations attempt to look at published research to see how well organizational programs are working.

The biggest part is doing a little research yourself. But how do you know an organization is actually doing good? Google the news to see if there are any controversies or red flags. Then check their own website. How honest and transparent are they on their main outcomes. Do they post a 990 form or annual report? Some organizations may not have hard evidence- they might be too small or high reward/high risk, but do they make a case that satisfies your needs?

If you have a high dollar donation, your local community foundations may also help you narrow down an organization that is local and fits your needs.

Finally, if you don’t have enough time to do your own research. Email me and I can help you find the right charity.