Planned Giving – Building a “To Die For” Program

by Hal J. Abrams, J.D., LL.M. , Planned Giving Consultant 

Planned giving can be a nuanced topic, and is often overlooked by fundraisers as something worth investment. However, it is an excellent way to secure long-term commitments and revenue for your organization. Understanding why planned giving is important and how to build a planned giving program is vital to the success of your organization.  

Below are some common misconceptions about planned giving:  

• “We’ve been meaning to build a planned giving program just as soon as our capital campaign is over” 

• “I don’t want to mention planned giving to this donor because he may take money off the table.” 

• “Mentioning death during a gift solicitation splashes cold water on the giving discussion.” 

Assumed rationale for not using planned giving throughout a campaign 

• “I would prefer not to raise too much money during the campaign” 

• “I enjoy the challenge of fundraising with one arm tied around my back” 

Let’s reverse the order of words to better appreciate the power of Planned Giving. Let’s just call it “Gift Planning.” In this context, it may be easier to see that all good fundraiser’s ultimate goal is to build a sufficient relationship with a donor to help show them giving opportunities that complement their goals. Don’t we want to help our donors “plan” their gifts to address both their philanthropic and financial goals? If we don’t fully understand the goals of the donor, our gift solicitations are simply blind “crap shoots” to hope that when we make a solicitation that we are asking the donor at the right time for the right amount of money. 

Building a Gift Planning program can help a fundraiser better identify the best donors.  

So let’s build a Gift Planning program!  

Is there a better donor to focus on than someone who has already told you that your organization is in their will?  

With this in mind, steps 1 and 2 to building a successful planned giving program are: 

Step One: Create a Legacy Society that honors anyone who has made an end of life commitment (will, living trust, retirement plan, life insurance beneficiary or life income gift); and 

Step Two: Promote the heck out of the Legacy Society: 

• Include magic boxes on all reply mechanisms (“check here if you are eligible to be a member of the _____ Legacy Society because you have included us in your estate”); 

• Piggy back Legacy Society promotion in all written and email communications (“PS Please let us know if you are eligible to be a member of the ____ Legacy Society”) 

• Send stand-alone post cards, buck slips and emails (and include on the website) mentioning the ____ Legacy Society. 

The immediate result after just taking these first two steps is to better steward your estate donors. This increased stewardship results in (1) decreasing the chance that the donor will remove you from their will (2) building a strong relationship with a donor whose fully qualified as having a strong affinity (can anyone have a stronger affinity than someone who is trusting their hard-earned wealth with your organization upon their death?) 

Russell James cites that over 50% of all charitable estates change one of their charitable beneficiaries within the last five years of a donor’s lifetime. So, let’s make sure that we are front-of-mind with as many estate donors as possible. 

Russell James also cites that donors who join a legacy society give on average 75% more after their membership. 

Step Three: Train the development staff, then board members to be legacy society ambassadors and capable issue spotters of donors who could either (a) be a potential legacy society member or (b) might benefit from learning of tax saving and income increasing components of planned giving. 

At this point, your Planned Giving Program is well on its way.  

Step Four: Train the development team to go beyond being an “issue spotter” to holding basic literacy in the benefits of some of the planned giving techniques. These techniques are not rocket science. Common planned giving techniques include giving from one’s IRA, stock or even real estate. Of course, the second tier of planned giving techniques does include life income gifts like charitable gift annuities and charitable remainder trusts. Independent study or having one or two consultant-led trainings should be sufficient to gain basic literacy.  

With this basic level of knowledge, the development team can help keep a solicitation alive by offering ideas why the donor needn’t decline a solicitation (because their assets are not liquid or they are concerned about having enough money for retirement or their kids) and offer solutions that allow the donor to shift looming tax bills to become gifts to charity.  

Once development officers can gain this basic literacy, they can make such provocative statements such as “Some of our donors have been able to seal their real estate or diversify their stock portfolios without paying any capital gains taxes.” This question naturally elicits a response like “I own 4 or 5 LLCs with real estate, tell me more” or “that is interesting, but I don’t own any real estate or stocks.” The first answer could lead to better qualifying a donor than the best research department could uncover. The second answer is equally illustrative in qualifying this donor as NOT having as high a capacity as one might have thought from their zip code, car they drive or job title (which is usually the extent that research departments can uncover a donor’s assets).   

When the dust clears, promoting a planned giving program is full of ways to better qualify, steward and cultivate donors that lead to more and bigger gifts.