Round Table Round Up: Planned Giving – Why You Should be Doing This Now!

A generational transfer of over $59 trillion is underway through 2052. Approximately 97% of donors leave a planned gift to an organization because they care about the charity. Nonprofit organizations need to take steps today and build necessary infrastructure to allow donors to leave a legacy and impact society in perpetuity.

Planned Giving Overview

1. Why do donors make charitable bequests?
   • 97% care about the charity
   • 82% want to do something special
   • 35% as income or estate tax planning strategy
2. What is Planned Giving?
   • Planned giving is a program of various financial instruments that can be adapted to each donor’s needs.
   • Each donor is unique; what works well for one, does not work well for another.
3. Why is Planned Giving important?
   • $57 trillion transferring between generations through 2052
   • Three options for wealth transfer: Government, Heirs, and Charity ($8 trillion transferred to charity in 2003)
   • If you don’t ask, someone else will!

Common Types of Planned Gifts

1. Gift in a Will or Trust
   • Last will and testament or a trust are the legal documents that give the individual right to exercise the disposition of assets
   • Bequest: specific provision in the will
2. Beneficiary of a life insurance policy
   • A donor can buy a life insurance policy naming your organization as the beneficiary and pay premiums on it
   • The donor may claim a tax deduction
3. IRA Rollover
   • Donors 70.5 and older
4. Charitable Gift Annuity
   • Contract between charity and donor where the donor transfers cash or property to a charity for a lifetime income stream & partial tax deduction
   • When the donor passes, the gift stays with the charity
5. Charitable Remainder/Lead Trust
   • More complex, usually executed by a designated professional
   • Individuals with larger incomes (i.e. those who may be inheriting money from parents)
   • Donor or charity receives a set percentage of the value annually
   • When the donor passes away, the remainder goes to the donor or charity

Is Your Organization Ready?

1. Simple steps to start:
   • Clean up database to determine best prospects
   • Targeted mailings, asking donors if they’ve considered leaving a legacy
   • Cultivation is key; how cultivated are your donors? How much do they know about your organization; where does your organization compare?
   • Utilize CPA’s/Attorneys who may be on your board and have estate planning experience
2. Marketing Strategies
   • Greatest & Silent Generation
     • Hard-copy information
   • Baby Boomers
     • Hybrid: hard-copy & online
   • Generation X
     • Transitional generation = multiple channels
   • Millennials
     • Online/text appeals
     • Want a seat at the table
     • Different definition of support
     • Heavy advocacy
   • Others include:
     • Planned Giving inserts
     • Donor Stories (people like to see their name in print!)
     • Planned Giving ads
     • Internet and social media outreach
     • Tagline in stationary and flip envelopes

Non-Negotiables: Make Sure You Have Proper Documentation

1. Gift Agreement
2. Letter of Intent
3. Attorney Letter
4. Scholarship Agreement

Identify Prospects

1. Who is your target? Overlay with generational metrics
   • Consistent annual fund donors over 70 who have given the last 3-5 years.
   • Alumni

Debunking a Planned Giving Myth

1. “If they leave a planned gift, they won’t contribute to my annual fund.”
   • According to Dr. Russell James, annual giving increases 75%, due to increased investment.