If you start your Planned Giving fundraising program this year, you won’t believe how much you can achieve by the end of the decade. Here’s your plan for getting there.
What does it cost your charity to not have a Planned Giving program that promotes gifts in estate and retirement plans?
It costs you stronger relationships. When donors include you in their long-term plans, they’re putting you alongside husbands, wives, children and grandchildren. Among the bequests for loved ones, there’s a gift for your organization.
That’s a pretty special relationship and a lot can come from it, as I suggest below.
Depending on how far you go with Planned Giving, perhaps into offering charitable gift annuities, donors will be counting on you to pay them income for life. They trust you that much. That’s a strong bond.
But you need not go that far into PG to feel the love from donors. Having a program that only encourages gifts by will gets you deeper, stronger relationships.
It costs you endowment growth. Many planned gifts are unrestricted. I routinely encourage clients to put as much of that undesignated revenue as possible into creating or growing an endowment.
As you build that fund–by spending no more than its earned income each year–you’re assured of a steady, budget-ready stream of endowment revenue annually. (Well, “assured” is relative. Endowment funds are not guaranteed to have gains every year. It depends on how they’re invested.)
It costs you growth in other giving. It is common for Planned Giving donors to increase their giving in other ways, especially to your annual appeal. They feel the stronger relationship and want to show their love.
Sometimes, planned gift discussions result in outright gifts. I see it about 10% of the time. Donors get so moved by the potential good their gift can do that they decide to make their gift immediate, forgoing the gift they intended for their will or other estate plan.
It costs you fundraising ambassadors. Another example of planned gift donors showing love. Many act as willing spokespeople, encouraging others to give to your organization.
They can sign a letter or an email or stand up at a lunch. I’ve witnessed testimonials that moved rooms full of potential donors to tears.
Donors are so much more compelling than us pros.
Sometimes, you just have to ask. Sometimes, they’ll act on their own.
It costs you time with elder folks. I love the company of older people. Don’t deny yourself the joy. I bared my heart in “I Love Planned Giving.”
Clearly, I’m not objective about Planned Giving. I love it and I’m a proud evangelist!
Think about starting a Planned Giving program. I’d hate to see you take on these costs. They’re so unnecessary.
If you’re not familiar with these, here’s a CGA primer from SmartMoney.com.
In many states your charity has to be approved by state authorities before you can offer CGAs as a gift option to residents of the state. This is for those that have that approval, or if your prospect resides in a state that doesn’t require approval.
The American Council on Gift Annuities has an informative site that includes a summary of regulations state-by-state. (I refer to the ACGA site often, but it’s not definitive for state regs. I always check the primary source–state law–before forming a final answer on a regulation question.)
Who do you talk to?
Prospects for CGAs are typically 65 and over, with most of the gifts coming from those who are in their mid- to late seventies. You should be actively listening to prospects all the time.
Clues that reveal you’re talking to a CGA prospect:
- I need more income
- I’m worried about retirement income
- I’m supporting a sibling; parent; or adult child (CGAs can be written so non-donors receive the lifetime payments.)
- My spouse will need income when I’m gone
- My stock dividends are low (CGA rates are higher than nearly every stock dividend.)
What do you say?
First, explain what long-term gifts do for you. Motivate prospects by feeding off what they already love: your charitable work.
Then, give your overview of the CGA features:
- simple agreement
- make your gift with cash or stock (or whatever state law and your gift acceptance policy say)
- steady, fixed payments for the lifetimes of one or two people
- what remains is a gift that supports our work
What if they’re interested in the financial features?
- rates vary with age; the older you are the higher your rate; would you like me to do a personalized overview for you?
- payments are steady and fixed for life (worth repeating)
- payments are backed by all the assets of the organization; have you seen our annual report on our site?
- assets are managed by X, with oversight by our CFO and/or board investment committee
- CGA program is approved by the state department of insurance (as appropriate)
Your prospect may want to talk to their husband or wife. Offer a personalized, written overview (assuming you have software to produce one) so they’ll have more detail and their discussion can be more informed.
This will get your charitable gift annuity conversations started. What have yours been like?