Should Planned Giving Be A Part of Your Fundraising Plan?
Fundraising management has been my career for more than three decades. My jobs have been to manage and blend all sources of charitable giving for several large nonprofits. My experience includes direct mail, capital campaigns, e-giving, grant writing, special events, corporate giving, tribute gifts, recurring monthly and annual memberships and legacy giving. My jobs have included overseeing fundraising strategy, staff management, and budget management.
I didn’t plan on a fund development management career when I was in my 20s. I graduated with a business degree in Marketing and Computer Information Systems. While looking for my first job after graduation I met a wonderful development professional. He showed me that people could do well by doing good. He showed me that individuals and their families could plan their charitable giving in ways that would provide income for them, avoid income tax, avoid capital gains tax and avoid estate taxes. He could show donors how to give more than they ever believed possible to support the missions of their charities and churches. He had my complete attention. Most people call what he showed me Planned Giving or Gift Planning or Legacy Giving but whatever you call it, it is wonderful, effective and financially foundational. In spite of learning and managing all the other methods of raising money, no success was as personally satisfying or financially impactful as orchestrating the creation of plans that helped people provide financial fuel for their philanthropic passions. This also providing them with personal tax benefits and sometimes a new source of secure income. After decades of experience in all types of fundraising, I remain an unabashed promoter of Planned Giving – because it works for the giver and the for the nonprofit.
Through the years I’ve trained and mentored dozens of people to become successful gift planners. They represent all kinds of nonprofits and churches as they sow the seeds today that will become the financial harvest of the future for the organizations that they represent. During these years, I have often encountered the real barriers that we seemingly always face in performing our roles as gift planners and also those faced by our nonprofit leadership. As a nonprofit executive I consistently encountered two questions that impede or destroy the opportunity of success.
The Question Most Frequently Asked
Why should a nonprofit invest money, time, and talent today into a Planned Giving program that won’t pay a return for 10 or 20 years or more?
The most effective planned giving officers are very much like gifted sales professionals. They know how to connect with people. They are good listeners and excellent communicators. They know the value in asking for a commitment and how to secure it skillfully. They are not intimidating or pushy. They are trustworthy and honest to a fault. They are the faithful face for advancing the mission of the organization. They regularly interact with other fundraising staff and activities. They thrive on measurable results and often are competitive by nature. They are enjoyable people to be around. They are both likable and professional.
Sadly, some planned giving jobs in some organizations are filled with people who seem to believe that their value is their knowledge. They view themselves as consultants. Many of them believe that their value is tied to their knowledge. They know the difference between a Charitable Remainder Unitrust, a Charitable Remainder Annuity Trust, and a Charitable Gift Annuity. They often view themselves as influential content experts. They would like to be the person other fundraising staff call when proven donors are aging and should be presented with continuing their philanthropic support in their remaining years and after they are gone. They often know how to operate the software that calculates and models trusts, annuities, and estate plans. They spend most of their time in their offices. These are NOT the people you want filling your planned giving positions.
Job one for a planned giving staff member is to secure bequests. Simple bequests make up more than 90% of planned giving results. Successful planned giving staff use direct marketing (mail and email), existing donor lists, the organization’s website, the board of the organization, annual giving staff and a network of CPAs, estate attorneys and investment advisors to identify prospects. They orchestrate the creation of bequests, trusts, and annuities with other financial and legal professionals. They are not ‘order takers’ or legal practitioners. Trusts and annuities are tools to be implemented in special circumstances and these pros know what those circumstances are.
Measuring results is not difficult. You must start with how many documented legitimate visits a planned gift staffer has with prospects and professionals. It is vital that these visits be defined and recorded. The credit for these visits must be weighted to encourage contacts that will produce the best results. A casual encounter at the grocery store doesn’t count as a legitimate visit. A brief phone call also won’t qualify. The volume of real meaningful face to face visits is the most important measurement of success. You won’t catch fish if your bait isn’t in the water.
So how do you put a value on bequests, trusts, and annuities? There are a variety of ways to calculate value of a bequest. The key to putting a dollar value on a future commitment is a Net Present Value Calculation. I will not get into the details here but it can be done. Documentation in a CRM system is vital to this process. The current value of new annuities and charitable trusts are fairly simple to calculate – if you have proper documentation. It accounts for life expectancy and the value of funding.
The ACS Planned Giving Unit quickly became successful because we hired wonderful, talented and enthusiastic people-loving individuals. We provided these pros with everything a planned giving officer requires to be successful… leads, marketing materials, technology, legal guidance, mission education, camaraderie, financial rewards (including the first ever incentive plan approved by all profession fundraising federations), and recognition in an incredibly energizing, supportive, and competitive culture.
Now is the time to insure the future of your nonprofit
There has never been a better time to launch or restructure a planned giving operation. We are in the midst of the largest generational transfer of wealth in history. Huge amounts of wealth are held in securities, crypto currency, businesses, commodities and real estate - the owners of the wealth won’t live forever. Many people have reached the stage of life where they would like to give back, help more, and spend their remaining years with a financially secure source of income. Technology offers profound opportunities. The Artificial Intelligence era is underway. Apps make things possible that we only used to dream of. Meaningful information for identifying, targeting, and reaching prospects has never been better. We can easily and less expensively improve results. Upping your planned giving game today will insure a financial foundation for future accomplishments. Endowments built with bequest, trust, and annuity dollars during the coming years will make charitable missions more achievable than ever. Cures for medical conditions like Alzheimer’s, cancer, and diabetes should be expected. We will have new success in solving vexing societal issues like homelessness, hunger and pollution. Don’t miss this wonderful opportunity.
- Rob Mitchell
