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.