The Importance of Legacy Giving

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

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Nonprofit executives and donors frequently hear – and intellectually understand – the words “bequest” and “legacy,” but all-too-often the nonprofit community seems to find itself lagging in establishing these critical campaign components as priorities.

As reported by Giving USA, Americans donated $298 billion worth of charitable gifts last year, with about 8% of that total received in the form of testamentary gifts. Putting this in perspective, this represented $24.4 billion in legacy gifts, an amount significantly larger than charitable support received from America’s corporate and business community!

Legacy giving expresses a donor’s personal values by integrating charitable, family, and financial goals as well as his/her vision for the future. There are many reasons that compel individuals to make legacy gifts.

Common reasons cited by legacy donors include sustaining organizations they care about, memorializeing themselves or a loved one, expressing appreciation to a charity that served them or their family, and meeting the long-term needs of their community.

While the reasons for legacy giving differ, nonprofits would be smart to focus on how giving to an organization can be a very important and meaningful reflection of a donor’s values and priorities. Benjamin Ginsberg, attorney and EHL Consulting’s planned giving expert, notes that there are additional reasons for donors to consider planned gifts, including tax incentives and income, and that most nonprofit outreach should emphasize these incentives.

These incentives frame the planned giving strategies of nonprofits and must be part of the marketing and communication with prospective donors and “investors.”

Development professionals must market legacy giving options creatively in order to help to dispel some common rumors about the notion of planned giving. The discrepancy between individuals who donate to charities throughout the course of their lives and those who allocate substantial gifts to organizations upon their passing is the result of the all too common misconception that one has to be elderly and wealthy to engage in planned giving.

In reality, anyone at any age or socioeconomic status can create a vehicle for long-term support as well as make a bequest to organizations they admire.

Unfortunately, these misconceptions pose a challenge for charitable organizations. In our decades of guiding all types of nonprofits, we see that people are often unaware or may not recognize the imperative for planned giving, perhaps because donors may tend to view giving as a “present tense” activity.

The belief that today’s challenges are the top priority among many nonprofit development departments is also to blame, and often results in the future-thinking concepts being discarded immediately … but both short and long-term thinking are necessary for sustainable operations!

A brief investigation of some of America’s leading nonprofits demonstrates that sophisticated organizations are becoming more forward thinking, considering both dollars for today and dollars for tomorrow.

For example, both the American Red Cross and The Metropolitan Museum of Art in New York City are well aware of the significance of planned giving, and with three and two clicks on their websites, respectively, one lands on their planned giving pages.

Unfortunately, this approach is not the case for many nonprofit organizations! Many nonprofits bury their planned giving literature deep in their website…if it even exists at all. This is counterintuitive to all online fundraising best practices, which encourage sites to have a donate button one or two clicks away from the homepage.

Nonprofit organizations of all shapes and sizes must be proactive about legacy giving. They should invite the involvement of lay leaders whose professional experience coupled with their passion for the organization’s causes can effectively spark this process.

Furthermore, nonprofit organizations should denote a clear section of their website to legacy giving, with contact information for the chief executive, director of development, or the planned giving expert.

In the months ahead, we welcome real-time comments about the impact your nonprofit has received as a result of a formal planned giving outreach effort; concurrently we want to hear from donors who have embraced planned giving and have influenced others to follow their example.

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