A charitable organization starts with a mission statement that sets the tone and vision. In turning to planned giving as part of your fundraising strategy, it is important to keep in mind that planned giving is all about vision and what’s possible through concerted action in our communities. Those who leave a bequest in their wills for their favorite charities acknowledge that the organization’s mission will not be achieved during their lifetime, but they are hopeful that it will in the future.
Faircom New York believes that every client has the potential to receive bequests and other gifts falling into the category of planned giving — we are eager to share with you some critical background about this valuable revenue source, as well as the various strategies that can be employed in securing planned gifts.
While bequests are certainly the most significant of all planned gifts, the range of what falls under this category also includes:
- Gifts of Stock
- Donor-Advised Funds (DAFs)
- Charitable Gift Annuities (CGAs)
- Qualified Charitable Gift Distributions (QCDs)
- Gifts of Life Insurance
- Gifts of Real Estate
- Transfers of IRA or other retirement account funds
- Pooled Income Funds
- Remainder Unitrusts
- Gifts of personal items (e.g., art and other collectibles)
Given the prominence of bequests in the field of planned giving, the information below ties largely to them, with additional information on other leading sources of planned gifts — namely Gifts of Stock, DAFs, CGAs and QCDs.
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A few statistics about bequest giving in the united states
In 2019, the largest source of charitable giving came from individuals at $309.66 billion, or 69% of total giving; followed by foundations ($75.69 billion/17%), bequests ($43.21 billion/10%), and corporations ($21.09 billion/5%).
Bequests represented 10% of total giving. This is twice the amount given by corporations, and this number will grow.
In the next 20 years, an estimated $30 trillion will be inherited in the United States as the large and prosperous Baby Boomer generation passes its wealth on to the next generation. This is the largest wealth transfer in human history and may be the single greatest opportunity for philanthropy in the modern era.
While Baby Boomers and the Silent Generation represent the majority of most nonprofits’ direct mail donors and most likely the majority of bequest intentions to any nonprofit with a direct mail program, the average age at which donors write their first will is 44 years old, and over half (53%) of donors established their first planned gift at the time of writing their first will.
Why is this important? If a nonprofit does not communicate the possibility of legacy giving to donors regularly, the organization will miss the opportunity to be included in someone’s will. And while donors of course change their wills as their families evolve and as they approach the reality of death, most donors do not remove a bequest designation from their will once it is made.
The greatest barrier to receiving a bequest is not asking. This is a huge mistake, because bequests are large. Bequests from middle-class donors frequently exceed $100,000, and some colleges report that their typical bequest is 2,500 times their average annual gift.
Bequests are of course not the only form of planned giving. Once a person names a charity in their will, they are far more likely to give other forms of planned gifts.
A few key points:
- 93 of 119 total bequests (78%) came from direct mail donors!
- The average direct marketing-sourced bequest was 21.5 times greater than the donor’s average lifetime gift before the bequest.
- Direct mail donors’ bequests are 27 times greater than their average lifetime gift.
- Online donors’ bequests are 63 times greater than their average lifetime gift.
- Staff-solicited gifts are very few in number, yet huge in value. If we encourage and train staff to solicit more bequests, the results can increase dramatically.
Sample of Faircom New York’s Planned Giving Marketing
The beauty of a planned giving postcard is that it doesn’t need to be opened to be read. It is also the least expensive direct mail marketing tool, and while you will rarely receive a known pledge from it (because it has no reply device), its contents are immediately seized by the recipient — even if it goes into the recycling bin. We know that the biggest obstacle to planned giving is not asking, and we also know that as much as 90% of direct mail solicitations remain unopened. We respond to the first barrier while addressing the latter with a clear, visually-impactful message, unhidden by an envelope: You can leave a bequest to (YOUR CHARITY’S NAME HERE!)
Buckslips are little slips of paper, about a third the size of a letter or the size of a Business Reply Card. These can be used to communicate offers or to add last minute news. We often use them to communicate planned giving options within an appeal or an acknowledgement.
Another inexpensive way to push for planned giving is through your acknowledgment strategy.
For example, we designed new acknowledgment stationery for Human Rights Watch that includes a legacy tag line at the bottom. This design was used only to multi-givers who have shown a genuine and, most importantly, constant interest in the organization’s mission over time. The acknowledgment is also mailed with a post-script that stresses planned giving.
Newsletters are valuable communication tools, particularly for planned giving. A planned giving newsletter can offer helpful tips to enable a donor to include you in their will or make another planned gift, such as a gift of stock or life insurance, QCD, recommended DAF grant, and so on. We can also include testimonials from other pledged planned gift donors in the newsletter, which adds social proof as an incentive to drive the reader to make a pledge as well. It likewise allow you to celebrate and honor donors who have made a commitment to you — an important effort to steward that donor over time.
A planned giving newsletter can also allow nonprofit to cultivate this important group of donors and provide them with information — fostering a greater sense of partnership. This is essential to building a relationship with the donor.
Planned Giving Survey Package
A planned giving survey package is designed to convince a donor to pledge a bequest and drive responses that you, as a fundraiser, will act on. We can use checkmark questions or open-ended questions — the latter potentially supplying you with great quotes that you can use in future planned giving or fundraising packages. Most donors like to be heard and they engage in surveys, and you also learn a lot about your donors through these tools.
Planned Giving Seminars
The most effective and direct way to promote planned giving is to talk about it directly with your target audience.
We would recommend inviting up to 20 people at a time to sit in a roundtable format, structured to facilitate conversation. A planned giving seminar involves give and take, question and answer; it should not be a lecture. It should be very informal and friendly, helping to further build a warm relationship with your donors.
Faircom New York can help your team prepare, including determining the channels that you will use to promote the session. We will also help to craft materials and a presentation to fit the content you most want to share; for example, some organizations are prepared to launch charitable annuity programs, while others may want to limit their options to bequests and transfers of life insurance. The final agenda will lead to our team preparing a presentation geared towards your volunteers, donors, or other stakeholders to educate them about their options. Most presentations will include:
- An overview of planned giving.
- How planned giving benefits the individuals who give.
- How planned giving would benefit your organization.
- Projects for which your organization may be raising funds.
- Possible methods to leave a gift, such as:
- Life insurance transfers,
- Real estate transfers,
- Stock transfers.
We could deliver the presentation to your constituents or train you to do so. We recommend the latter as a more powerful way to deliver this message, as you are the best messenger for your mission. Even if you are the presenter, we could attend the meeting to answer specialized questions or offer additional support.
Planned Giving Brochure
A brochure outlining planned giving options is a very useful tool for any nonprofit. Its uses are many, including:
- A tool for your development officers to use on personal visits.
- An insert in various mailings:
- Annual fund mailings,
- Gift acknowledgements, and
- Welcome packs.
We typically design three-panel brochures that can fold neatly into a #10 envelope — the standard letter-sized envelope —mailed at no extra cost. There is usually a business reply device integrated into the piece.
Planned Giving Webpage
Every nonprofit should have planned giving options clearly described on their website. The planned giving page should be linked to your donation page and will enable people to sign up for more information or to inform you that they plan to include you in their estate plans.
Faircom New York has had great success recruiting bequest pledges via Facebook retargeting ads. In the same way that we may utilize retargeting pixels to build visibility of your organization to audiences visiting your site, these tools can be important in tracking planned giving page visitors. However, as a note, there must first be a planned giving webpage in place.
Development officers must be armed with materials and trained to make the planned giving ask when they meet with their donors. To successfully maximize a planned giving solicitation effort, training and constant communication are key.