Happy New Year Everyone! Let’s hope 2022 is a tad better than 2021.
I would like to start off this year talking about planned giving and its importance to your organization, whether you have one or not.
Any nonprofit, regardless of size or location, can and should have a planned giving component as part of its overall resource development program. And, NO, you do not have to be or have an attorney or financial planner on staff to have a good program!
Let’s break this down a little bit. If you are a nonprofit, you should look at every possibility for raising funds in support of your mission. Planned giving is as equal to your special events, annual membership or fund drive, major gifts, or direct mail program in importance. All of these elements are merely tools in your toolbox. Your overall resource development effort should offer your donors multiple ways to support your mission. How they choose to support you is up to them. Thus, you want to offer choices that are appropriate for all points along their lifetime, from acquisition to annual support, to perhaps a major gift or capital campaign contribution, to a planned or ultimate gift.
Individual giving – 75-80% of all charitable gifts come from individuals and planned giving is the ultimate level of individual donor relationships. Only 7-8% of individuals leave something to nonprofits in their estate. Imagine if we moved the needle even one percent! It would make a tremendous difference to your organization.
Financial Stability – Planned gifts can come at any time and are usually the largest gifts individuals will make. If you fill the pipeline with expectancies, you will realize the potential of these types of gifts. And if you place bequests into your endowment, you will stabilize a source of financial security for your organization for many years to come. Donors like the flexibility and the stewardship that they receive, and they like the good feeling of knowing that they have created a legacy.
How many of you have a planned giving program currently? How many of you are looking to improve your existing program or start one?
So how do you get started? The first thing to recognize is that you can’t do it alone; you need to build a coalition of believers. Start with your boss and a key member of the board; these are the people who can make or break your program.
Once you have their buy-in, you need to develop your selling proposition or case for support. Why have a planned giving program?
Why have a Program? I’ve got a few reasons.
It builds endowment. Most gifts by will are unrestricted, and I routinely encourage clients to put as much unrestricted gift revenue as possible into endowment. I know it’s hard, but do it! Restricted gifts that are non-expendable belong in your endowment without question—and in many states, by law. If you had a planned giving program, what size would your endowment be today, and how much revenue would it produce each year? Now is the time to start—or expand—your endowment by starting your program.
Planned Giving grows other giving. It’s not unusual for those who invest in your charity for the rest of their lives, to increase their cash giving, as they get more familiar with your good work. This is the power of relationship building.
People don’t have to be rich to participate. Most of the planned gifts have no lifetime cost. Think of the bequest in a will or naming your charity as beneficiary of an individual retirement account. They come from your donors’ estate and cost nothing while their living. For lots of people, planned giving is the only way they can make their ultimate gift to you. While many would like to make a major gift now, they can’t afford to. Thus, now is the time to welcome these individuals and give them an opportunity.
The recession is coming, it always does, and most organizations need help. People die irrespective of the unemployment rate, the state of the economy, earnings on the NASDAQ and Dow Jones averages and who is president. When money is tight in your institution because other sources of revenue like individual giving, government contracts, foundation, and corporate grants have been reduced, cash still flows from your donors’ wills, life insurance, IRAs, charitable trusts, and other planned gifts.
Planned Giving builds lifetime relationships. When a donor tells you they’ve put you in their estate, you have got the rest of their life to thank them. And you should take every opportunity to do so.
Let’s talk about relationships. I am often amused when I attend the myriad of planned giving conferences and workshops across the country promoting the next best technique that maybe, on a good day, one out of hundred of us would ever use. Nevertheless, it seems that there is always the “technique” of the month while no one talks about the power of relationships.
A number of years ago I had an opportunity to mentor a senior accomplished fundraising executive on planned giving in his new role as Vice President of Planned Giving for a hospital in Northern California. While I was preaching the accolades of charitable remainder trusts, gift annuities and bequests, he spent the next few years making friends. He directed his attention for caring about his donors and their and their family’s estate planning needs first not his hospitals. By focusing on his donor priorities, he was able to establish relationships that few of us could ever match. Let me share some examples of the things that my friend did for six different donors.
- Lorraine: He helped her find a retirement center to move to and physically coordinated the move – much more than she could physically handle.
- Mel: He took Mel on a backpacking trip-something Mel had wanted to do but had never done during his 80 years of life experiences.
- Paul: He earned Paul’s confidence and respect leading to overnight stays in their home and shared motor home trips.
- Dick: He became his caretaker when Dick’s health began to fail and he had no family or friends to help him.
- Mike: He said goodbye to Mike on his deathbed assuring him as executor, his wishes would be carried out.
- Jay: He included Jay in family festivities and was on call 24/7 to assist him when he receives a call for a lung transplant.
Now I know many of us send letters, brochures, birthday cards, the annual report and maybe even make an occasional telephone call. But when was the last time you left your office got in your car and delivered your latest brochure and spent the afternoon really getting to know your donor and their family? When was the last time you picked your donor up at their home and brought them to your organization, introduced them to your CEO, and gave them a tour showing them how “they” are making a difference for so many others? How about just drove them to their favorite market or restaurant because they cannot easily get around like they use to be able to?
Yes, this takes time a lot of time. But I believe time well spent – time that will pay a multitude of dividends for your organization and you personally. Does this approach really work? When my friend started in his position, the hospital had no planned giving program and virtually no endowment. Fifteen short years later, they have more than 50 trusts under management totaling more than $30 million and nearly $100 million in current and future endowment commitments! Oh – and those six earlier donor examples account for more than $25 million in gifts.
Remember philanthropy, and especially planned giving, is all about the relationship you have with your donors. So my advice to you is this: the next time you have a choice between going off to a fine hotel for a few days to learn about the benefits of a charitable annuity lead trust funded with an alpaca ranch or staying home and spending some quality time with three of your donors—choose the donors a little more often. Your donors and your organization will be glad that you did.
In summary, you do not need to be a sorceress to add a planned giving program to your development program. I assure you it will be beneficial for the present and future health of your organization. The addition of planned giving to your advancement department is invaluable to small and large organizations alike.
If your organization doesn’t currently accept planned gifts, we are here to help. The Huddleston Group has developed a variety of materials that can help you get started. Examples include sample policies and procedures, a brochure copy, donor seminar materials, a bequest and charitable gift annuity copy for marketing letters, and much more as well as our session program “Successful Planned Giving”.
Let me know what you need and we are more than willing to share what we can at no cost or obligation, just give me a call.
I hope that this was helpful. If you have any questions, please do not hesitate to reach out to me.
The Huddleston Group is a full-service management, consulting and training firm specializing in philanthropy (i.e., campaign counsel, audits, feasibility studies, and creating a culture of philanthropy), opinion research (i.e., donor satisfaction surveys, focus groups, and marketing research), and organizational management (i.e., board transformation, strategic planning, and capacity building).
Visit us at www.thehuddlestongroup.com for free newsletters, a blog post, and videos.
Good Luck
Ron Huddleston, FAHP, CFRE
President
