Fundraising Best Practice Series: Volume 9, Planned Gift Prospecting

Does your nonprofit have a planned giving program?  Many nonprofits do, but I’m constantly surprised by the number of nonprofits that don’t.  If your nonprofit doesn’t have a planned giving program, you really need to start one.

Here’s why.  According to Giving USA, bequests accounted for $16.3 billion in charitable contributions in 2011.  That’s huge!

Here are some basic tips on starting and marketing a planned giving program…

Don’t believe the hype.  A lot of organizatoins avoid planned giving because there is a belief that planned giving is too complex – and that you need to have special expertise before you can even begin a planned giving program.  This isn’t true.  The vast majority of planned gifts (90%+) come in the form of simple bequests.  There isn’t much at all that your organization has to do to accept a simple bequest.  Focus in the early years on simple bequests, gifts of appreciate stock and charitable gift annuities.  These are easy to accept, and do not require a deep understanding of some of the more sophisticated giving vehicles.

Secure planned gift commitments from board members first.  If you’re just starting a planned giving program, the best place to begin is by securing commitments from each of your board members.  This will send a strong message to your constituents and the community that planned gifts are important to the long-term health of your organization.

Provide a planned giving check box option on your direct mail reply devices.  You’re not asking people to make a commitment by mail, just to check the box if they’d like more info on including your organization in their estate plans.

Highlight planned giving options in your receipt mail.  Receipts are a great place to include simple inserts showing donors the benefits of including your organization in their charitable estate plans.

Ask current planned gift donors to provide you with endorsements and stories of why they chose to include you in their estate plans.  These can be incredibly powerful in convincing other donors to include you in their estate plans as well.  Highlight these stories and endorsements in your newsletters and on your website.

Identify the key indicators for high potential planned gift donors.  These donors look and behave much differently than major donors.  They do not make large annual cash contributions, and are not likely to upgrade their giving significantly from year to year.  In fact, many times an estate gift is the only large gift they will make to any charity.  They are, however, likely to make frequent small contributions (often even as small as $1 – $5 , several times per year).  Other key indicators are age (the older the better), education (more is better), single or widowed, and no children.

Know what an acceptable planned gift is for your organization.  Decide upfront as you’re creating your planned gift program, the types of gifts that you’ll accept in your program.  Will you accept simple bequests, real estate, vehicles, appreciated stock, closely held stock, etc.  You should also establish minimum gift amount thresholds for each giving vehicle.

Network with estate planning professionals in your community.  Get to know local estate planning attorneys, financial planners and real estate advisors.  These are the professionals assisting people in your community with their estate plans.  If they know you and have a good impression of your organization, they may be able to recommend your organization to clients who are interested in including charitable giving in their estate plans.

Append age to your donor file.  Having access to this information will make it a lot easier for you to quickly sort and identify some low hanging fruit for your planned gift prospecting efforts.

Create a legacy giving society.  Induct anyone who has made a planned gift commitment.  Develop a low-cost premium (plaque, framed photo, etc.) to give to new legacy society members.  Include a custom cover letter with your newsletters to legacy society members, and send custom e-mail communications to legacy society members.  Stewardship is the goal here, not securing annual cash gifts.

Don’t base next year’s planned gift income expectancies on this year’s actual results.  With most other fundraising vehicles (direct mail, online giving, major donors, etc.), you can pretty safely take this year’s actuals and project out next year’s results within 5% – 10%.  That’s not the case with planned giving.  Because most planned gifts are not realized until the donor’s death (sometimes months or even years after), predicting planned gift income is very challenging.  Don’t let the board set this as an annual expectation.  You don’t have enough control over the variables to project this with any degree of certainty.

Mail an annual planned gift prospecting letter to your donors.  Estate plans are being created earlier by younger people every day.  This is especially true given that Baby Boomers are being forced to plan for their retirement, their children’s futures, and for their parents’ end of life care, etc.  If you can afford it, send a planned gift prospecting letter to any donor who has given 3+ gifts in the last year or 5+ gifts in the last 24 months.  If you need to reduce costs, segment further based on age.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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