Every Donor Is a Planned Giving Prospect

A seismic transfer of wealth is on the horizon. Research firm Cerulli Associates estimates that $68 trillion will transition to heirs and nonprofits over the next 25 years.

This presents an incredible opportunity for nonprofits to partner with donors who want to leave a legacy through the missions, visions, values and programs that are important to them. According to Giving USA, donors gave nearly $40 billion in bequests in 2018.

“All organizations ought to be in the arena. It allows people to perpetuate their giving,” says Bill Sturtevant, former vice president for planned giving and trust relations at the University of Illinois Foundation and author of “The Artful Journey: Cultivating and Soliciting the Major Gift.”

“Get in the bequest business,” he encourages. “Bequests are the bulk of all legacy gifts. A bequest program is a straight-forward proposition. The bulk of estates are not going to involve tax situations.”

Joe Chickey, senior vice president with the Sharpe Group, says that charitable IRAs and contributions from the IRA “are the best vehicle with the new tax law.” We have been looking at legacy donors and how they can do something now,” Chickey says. “The IRS does provide advantageous tax structure to charitable individuals, but they don’t advertise it.”

According to Kathryn Miree, president of Kathryn W. Miree & Associates, 90% of maturing planned gifts are bequests and beneficiary designations. “It is more about the relationship with the donor than about the complex gift,” she adds. “It is just about a conversation and asking them to invest in the future. Every donor is a planned giving prospect.”

Miree encourages nonprofits to know who is in their prospect pool. “Your data is so important, and it is almost the weakest link in every shop,” she says, adding that nonprofits needn’t spend a lot of money to get into planned giving. It’s as simple as integrating a compelling case for deferred giving.

“Thank people for their support, and ask them to continue that impact through generations,” Miree suggests.

At The Community Foundation for Northeast Florida, more than 80% of planned gifts come from referrals from professional advisors, according to gift planning officer Mariette Brodeur.

“Grow and strengthen your relationships with the professional advisory community,” Brodeur says. “Ask them, ‘How we can help you help your clients?’”

Michael Rosen, president of ML Innovations and author of “Donor-Centered Planned Gift Marketing,” stresses the importance of planned giving being relationship based—and of showing gratitude, especially with revocable gifts. A thank-you can go a long way.

“Planned giving is fundraising,” he says. “The way you should do any level of fundraising is [the same for] planned giving. Talk to people specifically about what you would like them to do and keep the language as simple as possible.”

Having policies and procedures are important, as is reviewing them annually.

“Sometimes you need to say no to a gift,” says Nathan Stelter, president of The Stelter Company. Stelter also encourages nonprofits to have a plan, as well as a staff and board education process.

Planned giving does not compete with current giving. Indeed, it complements it.

“When people add a charitable component in their estate plans, their giving goes up as well,” says Dr. Russell James, professor and The CH Foundation chair in personal financial planning at Texas Tech University. “It’s all about relationships. When you can get [people] to treat your organization like a family member, they are going to express that commitment in a lot of different ways.”

Most planned gifts are bequests but, “If you think current gifts are skewed toward major gifts, then you haven’t seen anything until you look at planned gifts,” James says.

“Ninety percent of the dollars don’t come from the simple techniques,” he shares, so “when things get complicated, get professionals involved.”

James calls the new tax law a “mixed bag.” According to him, that means:

• “For the top 10%, it is nothing but huge benefits for charitable giving. The value of giving appreciated assets went up dramatically.”
• “Nothing is different for lower-income families.”
• “The middle group should consider bunching gifts into one year or shifting gifts to a donor-advised fund.”

“We won’t know the effects of those things for a couple of years until we get tax data in,” James adds.

It is vital that nonprofits keep in touch with their oldest supporters, since most planned giving documents are signed when donors are in their 80s, 90s and older.

“That is where the bulk of the dollars are controlled,” James says. “Most charitable estates are made the last two to five years of life, and that is when a donor’s giving falls and then the charities go radio silent.

“When they quit giving,” he stresses, “it is a life cycle reality, not a ‘we don’t like you anymore’ reality.”