Nonprofit Fundraisers! Get Small Shops Started on Planned Giving
By Betsy Steward
In a recent blog, I wrote about the importance of legacy giving right now, because the greatest transfer of wealth in history is happening as the Greatest Generation and Baby Boomers make their estate plans. I believe it’s a mistake to miss this unique opportunity to secure your nonprofit’s future.
If you’re part of a big nonprofit like a university or a hospital, you probably already have planned giving experts on staff, with a robust and active Planned Giving program in place. This blog is not for you.
But if you’re part of a smaller nonprofit, with a small development team, asking your donors to include your nonprofit in their estate plans might have been pushed off your task list (if it ever got there to begin with).
I urge you to get started! If you don’t start one, who will? And if not now, when? You don’t have to hire a planned giving expert — and your nonprofit doesn’t have to be as big as a university or a hospital — to start asking your committed donors to include your charity in their plans. If you can have a conversation with your donors about their giving, is there any reason not to include a mention of the ultimate gift – a legacy gift?
Three elements need to be ready to start talking about estate planning: your organization, your donor, and you. Here’s a checklist as you consider what’s needed to move forward. You’ll see that it’s not prohibitive… you can do this!
Is YOUR ORGANIZATION ready for a planned giving program?
Discussing planned giving is most appropriate for organizations that have been around for at least ten years. Your nonprofit:
must have official nonprofit IRS status — for most, that means it must be a 501(c)3;
must be established in the community with a track record of success;
needs leadership that’s well respected;
needs to be perceived as stable;
(so, if your ED just left and you’re looking for a new one, it might be wise to wait until the next ED is in place – that makes a more compelling story when you talk about estate planning)must have a Gift Acceptance Policy in place.
What if the donor leaves you something that is counter to your org’s values? Or something that you can’t use and will cost your org money to discard? Gift Acceptance Policies are mandatory, not just for planned gifts. If your Board doesn’t have one, start educating them about why it’s important, and help them get started on one.
Is YOUR DONOR ready to be asked for an estate gift?
It’s the strength of the relationship that determines the timing of an estate “ask,” not the age or perceived wealth of the donor. A longtime donor who is clearly committed to your mission and organization won’t be surprised if you bring up the subject, even if they’re middle-aged. In fact, another nonprofit probably already has!
In most cases, the most relevant question is “how many gifts has this person given to you” rather than “how much has this person given to you.” It’s the frequency of gifts that shows someone is a good candidate for this conversation.
Let’s say you have two donors. One sponsored your gala by giving you a $25,000 sponsorship in response to your solicitation, which was a good investment for him business-wise. The other donor has given $100 every year for 20 years.
It’s the annual $100 donor who is the better candidate for a legacy conversation. That person is obviously very committed to your organization. I doubt you’ll surprise her by bringing it up, but I bet you’ll shock the other guy!
Are YOU ready to talk about planned giving?
Your job is to ask. It’s easy to be intimidated by the topic of estate planning, but remember that your ONLY job as a fundraiser is to ask. You are not — and you don’t have to be — a retirement planner, a financial planner, a tax preparer, or an attorney. You are not required to know all that those people know, just to bring up the topic. You just need to know how to ask for a donation.
Your confidence would benefit, though, if you were familiar with these five basic versions of a bequest:
General Bequest: a specific dollar amount or asset
Percentage Bequest: a percentage of the total estate
Residuary Bequest: a percentage, or the entirety, of the estate after all other debts, expenses, and bequests are accounted for
Contingent Bequest: result of a certain condition being met (e.g., if a spouse pre-deceases the donor)
Beneficiary Designation: donors name your nonprofit as a beneficiary of a portion (or all) of their retirement funds, bank accounts, and life insurance policies
Reviewing this list before any meeting where you plan to discuss Planned Giving will help you appear poised and informed. Once you and the donor have discussed it, you can pass the detailed planning off to an expert.
There’s no reason not to ask your committed donors — the same way you ask them for anything else — to include your nonprofit in their estate plans. It’s how you can secure your nonprofit’s future, and how your committed donors’ values can live on in perpetuity. Don’t wait!
Betsy Steward is an independent fundraising consultant. She advises clients on major donor solicitation, cultivation, and stewardship, as well as fundraising best practices, back-office organization, board presentations and writing to donors (appeal letters, emails, proposal letters, thank-you notes, etc.). She can be reached at BetsyVSteward@gmail.com.