Planned giving can be a powerful resource for non-profits to both grow and diversify their revenue stream. But it can also be intimidating and downright mysterious. As a result, non-profits flirt with planned giving. They try to learn how to launch a program by attending seminars. Unfortunately, their experience of planned giving can too often be defined by receiving income checks from bank trust departments or getting lucky news of an unexpected bequest. Programs that succeed typically demonstrate an organizational commitment to a strategic, disciplined and continuous effort over a sustained period of time.

Why consider a planned giving program?

How better to secure the insecure future that so many non-profits face than with deferred gifts? Every non-profit is at risk of losing their largest donors at death. That valued annual donation or capital gift must be replaced by either soliciting a new donor or by targeting another source of revenue. A bequest or other planned gift endows the donor’s annual income stream with a permanent stream of revenue. Planned gifting offers benefits that current gifts do not, including the potential to be far bigger than anything a donor can do in their lifetime and bringing the donor much closer to your organization during their lifetime. Evidence also shows planned givers are likely to increase their annual gift. A 2007 study by the Center for Philanthropy at Indiana University found that individuals with a charity in their will donated more than twice as much  money in any given year than those who do not have a charity in their will. (1) 

Planned gifts are a win-win: they round out your revenue base, and they help donors expand their giving options.

What is planned giving?

Simply defined, planned giving is the means through which a donor can leave money or assets to a non-profit at their death. The gift typically confers a financial benefit on the donor or their heirs, either during their lifetime or at the end of the gift’s lifetime. Bequests (gifts via will), trusts, insurance, annuities, IRAs and real estate are the most common gift planning vehicles. Financial benefits to the donor are typically in the form of improved income and/or reduction/elimination of a current or future tax liability.

Successful planned giving programs are not built on selling the features of planned giving. They are most securely built by tapping into a donor’s passion for your mission.

Is my organization Ready to launch a formal program?

Not every organization is ready to launch a planned giving program. How do you know if your organization is ripe for one? Some fundamental questions worth asking are:

•        Does your board understand what planned giving is and if not, do you have access to an affordable resource to help educate them? Education can involve a board presentation by a consultant, a financial advisor or a well-versed staff person. Consider putting an estate/trust attorney on your board.

•        Is your annual donor base strong and growing? Planned gift donors are a subset of your donors and are often those donors who give consistently. Non-profits with healthy, growing fundraising programs will have the most potential for planned gifts.

•        Do you have a Gift Acceptance Policy? Developing and documenting clear acceptance standards will help facilitate the receipt of gifts. Will you accept non-marketable assets? Are you willing to be named Trustee of charitable trusts? Is there a minimum gift annuity size you will accept? Sample Gift Acceptance Policies can be found at www.boardsource.org.

 Does my organization have the Ability to conduct an effective planned giving program?

Planned Giving programs require resources above and beyond that of annual campaigns and capital campaigns. 

•        Does development staff time allow for meaningful dedication to planned giving or is time absorbed by special events and annual giving efforts? Cultivation, developing relationships, and gift solicitation require face to face time with donors. It will take an average of seven touches with a prospect to get a planned gift.

•        Does development staff have experience in planned giving and, if not, how will they get training?

•        Does your planned giving budget allow for the use of a consultant either to help start up a program and/or to run one? In the absence of internal resources, a consultant can kick-start your program and help keep it running.

•        Do you have software that not only captures annual gifts but also planned gifts? Information is power. Is it clear which staff is responsible for what parts of the data input and management process?

Is my organization Willing to support a successful planned giving program?

Planned gifts operate on a different model than annual or capital campaigns. They involve future cash flow, reducing their priority for many non-profits. Commitment to a program requires:

•        Full and active board support. Board members should be asked to consider a planned gift. They lead by example and are an invaluable resource to help identify and cultivate other gift donors.

•        Realistic performance metrics that the board understands and supports. Planned giving results are measured differently than annual giving. Be patient because financial results will take a few years to materialize. Develop nonfinancial measures in the shorter-term that all agree upon, such as the number of members in your Legacy Society, the number of gift commitments, the number of planned giving proposals produced by staff, etc.

•        Ongoing marketing. Planned giving needs to be regularly promoted in your marketing materials and through educational venues. New programs focus on raising the program’s visibility, educating donors and planting seeds for the planned gift. Per consultant Kathryn Miree, “… Most veteran gift planners have stories of donors arriving to discuss a charitable remainder trust or gift annuity bearing a dog-eared, three-year-old copy of a newsletter that planted the idea.” (2)

•        Investment in professional development. Development staff will benefit from joining professional organizations like the local planned giving council. Attend education sessions locally and nationally and subscribe to periodicals and newsletters.

Deborah Moses is a Senior Client Consultant for Fifth Third Institutional Services working with local non-profits to provide charitable management services. She has spent over 20 years in the investment management field in the Pittsburgh region and was responsible for managing a locally-recognized non-profit organization for six years.

(1) The Center on Philanthropy at Indiana University. (2007). Bequest Giving Study for Campbell & Company. Retrieved October 5, 2009.  http://www.philanthropy.iupui.edu/Research/Bequestgivingstudy-CampbellCompanyFellow.pdf

(2)  Miree, Kathyrn W. (2009). Demystifying Planned Giving Marketing: Secrets for Success. Retrieved  October 5, 2009. http://www.kathrynmireeandassociates.com/PDF/DemystifyingPlannedGivingMarketing.pdf