I get a good number of calls from nonprofits wanting to start a Planned Giving program. I love talking about it because I feel like an evangelist for PG (sans any religious overtones), explaining what needs to be in place and what the process is to get started. I love talking about it because that’s what my consulting is–building Planned Giving programs where they don’t exist.
Adapted from my 2010 year-long series for GuideStar, “Make 2010 the Year YOU Start Planned Giving,” here are six essentials for you to start your program in 2011.
At Least 10 Years Under Your Belt. You’ll be asking prospects to include you in their will, so they need to have confidence you will outlive them. A nonprofit that has reached 10 years enjoys a solid enough history that most people will get past concerns that you’ll dissolve before they die.
Consistent Donors Over 55. This is roughly the age when people start thinking about their estate plan as a charitable vehicle. Look to people who have given loyally over many years, irrespective of the size of their gifts. Someone who has given you $15 a year for 18 of the past 20 years is a terrific charitable bequest prospect. As well, don’t ignore major donors.
Board Support. As with any significant initiative, you need the board backing your inaugural Planned Giving program. Members need appropriate expectations, so they understand you’re talking about long-term fundraising that won’t pay next year’s salary budget or finance the five-year capital plan. Ideally, board members begin thinking about their own planned gifts and make commitments.
Kick-off With Bequests. In any PG program, bequests will be at least three-quarters of the gifts. Why? There’s no lifetime cost to donors; they can change their minds; everybody understands how the charitable bequest works; donors don’t have to tell you about their intentions; and they don’t have to tell you how much you’ll receive. Small nonprofits may start and stop with bequests, and that is a perfectly respectable planned gift program.
Understand This Is Not Only For The Wealthy. People of modest means make terrific Planned Giving prospects. No lifetime cost makes it affordable and the only way for many middle-income donors to make their ultimate gift to you. If you don’t have lots of major donors, you don’t have an excuse. You can build a successful PG program.
Cheap Marketing Opportunities. You have them! Add reminders to annual fund reply cards. Use email. Put PS’s in other letters. Insert slips in mail you’ve already budgeted. Write a sidebar for your newsletter. Add a simple explanation to your website. Place an appeal in everyone’s email signature. Include a reminder on new business cards as you need them. As a supplement to cheap marketing, if your budget permits, do a personalized, direct mail solicitation.
If you’ve got the first three items in place, put aside excuses and obstacles. You’re ready to roll by executing the last three.
Get going!
I absolutely agree that setting the board’s expectations is critical, Jay. You don’t want them questioning a lack of revenue after only 18 months. But there are other measures of success: wills the organization is now included in; new prospects; meaningful contacts; direct mail reply rates; and attendance at events come to mind.
Under the Board Support, I’d reall emphasize a clear understanding of how long it takes for revenue from Planned Gifts to appear on the books. Most Board Members I’ve worked with – both as a consultant as and an in-house fundraiser just don’t have a clear understanding how long they’ll have to pay out on a Planned Giving program before it produces a consistant revenue stream.
I often use this sort of example as part of my board education on planned giving. I’ll pick a Board Member who is about 50-55. I’ll say, “Let’s supose Mary here makes a bequest in her will to our organization. For example purposes, let’s say Mary makes a $5,000 bequest (always pick a number close to what your research says Mary can afford) to us. When is Mary going to die?”
You’ll get a lot of uncomfortable looks, stares and silence. Let that happen for a minute or so, and then let them off of the hook. Give them the latest average life expectancy for thier state. “If all things work out on average, the state demographer says that Mary will probably live to be 79.”
Again pause to let them start drawing conclusions – then say, “That means we need to wait until 2035 before we will be able to put Mary’s gift to use in our programs.”
This sort of example will help identify the Board Members who don’t want to wait the amount of time that’s necessary for a good planned giving program to pay off. These Board Members will have to be worked with individually before you impliment your program.
That’s been my experience over 24+ years of fundraising. Your’s may vary.
Excellent information … very useful. Thank you!
Well said and a good story. Thanks, Michael!
Tony, I enjoyed your post. In my book, “Donor-Centered Planned Gift Marketing” (http://bit.ly/eRgSum), one of the things I mention is that a common mistake made by nonprofit organizations is believing that planned giving is too difficult to implement. While gift planning can certainly be complex, particularly with sophisticated trusts, it usually is pretty simple. The vast majority of planned gifts are bequests. Gifts of appreciated securities and Charitable Gift Annuities round-out the list of most common vehicles. All are pretty easy. The complex giving vehicles are an extreme minority. While development professionals should be aware of the broad range of giving vehicles, they don’t need to be an expert in all of them. Knowing who to call for assistance is often good enough when the rare needs arises.
Finally, your post reminds me of a nun who approached me at a conference. She wanted to know if her organization was ready for a planned giving program. I asked her if anyone ever left her agency money in their will. Sister said they received about six bequests a year. I responded, “Sister, I don’t know how to tell you this, but you already have a planned giving program. You just didn’t know it.” 🙂
I start Planned Giving programs with bequest promotion, for many reasons. Charitable gift annuities are occasionally appropriate at that stage. Reinsurance as related to gift annuities isn’t in our mix.
Thanks for your question, Annette.
Hi Tony,
What recommendations are you offering your non-profits who wish to establish start-up planned giving programs regarding reinsurance? To utilize or not? How to structure it? Providers? Thanks.
I’m glad it’s valuable to you.
Tony: Great sage advice and thanks for sharing. It would benefit all nonprofits to read what you have provided us on how to proceed in this endeavor.
Good luck on your journey!
Loved the info, got it noted for when we hit that point in our venture! Thanks a ton. We aren’t at a position to solicit or accept donations yet, but finding a lot of good information for when we get started!
Johnny