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Are You Tackling Planned Giving Yet?

Written by Robert Evans. . Posted in Blog Donors and Giving Trends eJewish Philanthropy Articles Endowment Fundraising Consultants Planned Giving

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While every charitable gift is planned, some are “more planned” than others. And in today’s charitable giving arena the importance of testamentary giving is more punctuated than ever, especially as Baby Boomers age… quickly.

Philanthropy has evolved fundamentally from the “crisis mode” of the post-WWII generation. With a substantial accumulation of wealth, we would expect that donors have money to give for compelling causes and important organizations.

Coupled with increased wealth is increased involvement in philanthropy, as donors strive to find the best fit for their specific areas of interest and demand assurances that their contributions are being well utilized. 

In a nutshell, planned giving focuses on an individual’s assets, which typically comprises the majority of a person’s net worth and allows individuals to make larger gifts than they could merely from their income.

Rather than make a single major gift through various planned giving vehicles, donors can structure a bequest or something more complex that provides both income and tax advantages to the donor as well as heirs.

Depending on the gift, a donor may pay no capital gains tax, receive current tax deductions, qualify for sales tax exemption or receive fixed payments.

Despite the gains associated with planning giving, many nonprofits still do not have a planned giving program in place. Most organizations rely on annual year-end appeals, the bread-and-butter of fundraising, along with events and other “nickels and dimes.” Additionally, smaller organizations generally focus on securing contributions to address day-to-day needs rather than looking at strategic and future needs.

Planned gifts can involve seemingly complex and unfamiliar legalistic terms and are sometimes couched as the private purview of financial advisors, lawyers, and wealth consultants. It’s no wonder why some would hesitate to initiate discussions about planned giving.

Talking about planned giving need not be fraught with technical jargon. It is a wonderful opportunity for dynamic discussions with supporters, engaging them in personal conversations about their hopes and dreams for the future of the nonprofit.

Incorporating planned giving conversations and efforts into other campaign-focused efforts provides an alternative or a partner to outright gifts. Planned giving can be geared towards a larger audience, reaching those who may not have the capacity to make a significant outright gift. There are also tax benefits and supplemental funding considerations to various planned giving vehicles.

Planning legacy gifts requires a dedicated effort of an organization’s professional and volunteer leadership. A commitment to both strategically accommodate and demystify planned giving is a must.

  • Establishing a Planned Giving Committee of supporters who not only are passionate about the organization and its future but also possess some technical familiarity (e.g. lawyers, accountants, financial planners) is essential to ensuring that donors can efficiently plan legacy gifts safeguarding their charitable intent.
  • The Executive Director/CEO as well as past and current leadership should be included in the planned giving process.
  • As always with fundraising, leadership should lead by example so Planned Giving Committee members should be the first to designate the nonprofit as a beneficiary. The other responsibilities of the Planned Giving Committee should include creating gift policies and procedures, marketing, asking for gifts, and donor recognition.

Planned giving should be approached as a long-term venture, where relationships with donors are stewarded through consistent promotion and regular and appropriate promotion, until they are ready to make such a special gift.

Discussing the organization’s mission and future plans is a good way to initiate contact with potential donors and learn more about their specific motivations and preferences.

Communication and education are essential. Virtually all communication should have an integrated planned giving message, including newsletters and brochures along with a “Ways to Give” link on the organization’s website.

Specialized seminars given by legal and financial professionals, possibly drawn from the organizations donor pool, are an informal way to promote planned giving. Recognizing individuals who have made planned gifts is vital to maintaining relationships and building new ones.

Planned giving is the most flexible way for donors to proactively acknowledge the importance of the organization in their lives. Likewise, planned giving affords nonprofit leadership with a tremendous opportunity to forge and strengthen bonds with congregants when discussing how to best use the multitude of testamentary options, not to mention supplementing dues, enhancing capital projects, and supporting vibrant programming.

The time is ripe for small nonprofits to expand their funding capacities and catch up with other nonprofits in strategically planning a sustainable financial future!

Adapted from eJewish Philanthropy – March 2, 2012

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