Planned Giving: Turning Donor Consideration Into Donor Action

According to Giving USA 2007, charitable bequests totaled an estimated $22.91 billion in 2006. As in recent years, these charitable bequests made up less than 8 percent of the estimated total giving that year. But research shows that one in three individuals would be willing to consider having a charity named in his or her will.

These findings support the belief that organizations need to focus on upgrading donor consideration into donor action, especially for planned gifts. What does this mean for you?

Whether you are beginning a new program or hoping to invigorate an existing planned-giving effort, you are far more likely to be successful if your planned-giving program is fully integrated with your comprehensive development efforts and communication strategies.

Why marketing/cultivation is so important
For decades, passive fundraising has marked the industry approach to planned giving. It seems that we are satisfied with a marketing and cultivation methodology that is separate from many of our related donor-development activities, dependent on direct-mail contacts with 0.5 percent to 1 percent response rates, and reactive to donor intention.

It is possible that our passivity is rooted in a mistaken belief that most planned gifts come from older, wealthy donors who have already contributed significantly through cash gifts. Although some planned-gift donors fit this description, most are hidden in your database. However, we now know how to uncover your best prospects for annuities, bequests and charitable remainder trusts.

Armed with the knowledge of how to pinpoint our best planned-gift prospects by type of giving vehicle, as well as the paths these donors follow in their relationships with our organizations, we can consider an integrated cultivation process. The donor-development life cycle begins when prospects enter our database with a comprehensive, proactive program that erases the misconception that planned-giving marketing should be separated from other donor cultivation.

Building the foundation for the right marketing strategies
Donor development, and the quest for the ultimate gift, begins when new individuals or prospects are added to the database. Whether your organization has natural constituencies — such as alumni, parents or patients — or must draw from a wider, more diverse universe of individuals believing in your mission, starting the cultivation of a special relationship from the early stages of interaction offers your organization a great opportunity to achieve its ultimate funding potential.

Start the process today with an internal evaluation of all your development activities. Does your organization operate from a “silo” approach, with little integration between annual, major and planned giving? Or do you have a comprehensive plan that maximizes overlapping donor contact initiatives and reduces the solicitation impact on best prospects? If so, by reducing internal barriers and placing donors’ interests and needs front and center, you can raise more money.

Raising that “extra” money begins with the solicitation of the first gift. Did you know that annual donors or members who become habitual contributors to your organization form the groups with the highest likelihood of becoming planned-gift donors? Furthermore, were you aware that contributors participating in your mission largely through ticketed special events are far less likely to reach their ultimate giving potential? However, season ticket subscribers, particularly at moderate pricing levels, may be among your best planned-giving prospects. Interesting, isn’t it?

However, like most gems uncovered through data mining, this information is most powerful when we understand the messages to be learned and take the next steps to ensure that we practice the most successful donor-development techniques. The following are critical knowledge points and action items.

* Most planned gifts emanate from habitual annual donors.

* Loyal giving behavior frequently trumps gift size as a predictor of planned giving.

* In addition to annual giving, recurring behavior pertaining to memberships, volunteerism and ticket buying also demonstrates loyalty linked to ultimate giving in the form of a planned gift.

* Loyal donors deserve special treatment, and that begins with the solicitation and renewal process. Whenever possible, reduce the number of “asks” targeting loyal donors and investigate anniversary-date solicitations.

* Loyal donors include individuals who do not give every year. My research reveals that individuals giving at least 60 percent of the time ultimately behave similarly to “never miss” annual donors. Want to take action on this knowledge? Establish a “triggering event,” such as a minimum of three gifts in five years, to identify emerging planned giving prospects. Then focus your best and least intrusive and most successful donor relations activities on these individuals to stimulate their ultimate giving potential.

* Recognize loyalty with the same vigor devoted to mega-gifts. Many loyal donors have significant ultimate giving potential, often through charitable bequests. Let them know your deep appreciation for their loyalty with recognition in your annual report, donor honor roll and Web-based recognition.

* Thank them, thank them, thank them! Break out of formulaic thinking and let your loyal donors know you really care. Yes, it is important for organizational leadership to thank donors, but always remember that most donors are mission-centered. Try having those who deliver or benefit from your services and mission participate in the thanking process. Who is better at documenting the benefits derived from an individual’s gift support?

* Regularly ask donors why they support your mission. Short surveys that concentrate on donor attitudes and preferences, rather than provocative “wealth” inquiries, offer the opportunity for the sharing of insightful information that may strengthen the bond. Make sure you add survey results to the database and develop action items based on the insights gleaned from the responses.

* Never forget, for the majority of planned-gift donors, the bequest or annuity is their major gift. They do not view themselves as capable of making large cash contributions. As such, they warrant special, personalized attention around their consideration of planned gifts.

Conversely, almost all major donors are capable of making an additional planned gift.

Although this form of the gift may not be as appealing to the donors who are accustomed to the excitement generally associated with large gifts of cash, do not forget to ask for a planned gift from major donors.

* Finally, always remember that the personal insights you gain from donor meetings and calls are often the best information you will get for directing future cultivation strategies. If we meet with more legitimate planned-gift prospects, we will close more gifts. Remember, your best planned-giving prospects are charitably inclined donors; if you are not meeting with them, another nonprofit probably is.

Lawrence Henze is managing director at Target Analytics, a Blackbaud Company. This story is excerpted from the whitepaper, “How the Right Marketing Strategies Can Enhance Your Planned Giving Program”.