Outsourcing: Part 1

By Todd Cohen

In 2000, after more than 15 years administering its own planned-giving program and managing the investment of its planned gifts, Rollins College in Winter Park, Fla., concluded it was putting its relationship with donors at risk by handling those tasks in-house.

With nearly $10 million combined in its pooled-income fund, gift-annuity pool and charitable-remainder trusts, Rollins needed to make sure the return on its investments met its obligations to donors, and to the school, and that donors received their income and reports on time, says Robert Cummins, director of planned giving.

“In most cases, it’s not the only gift the donor is making, and we have a stewardship responsibility to keep the donor happy and encourage further support,” he says. “Those are very, very sensitive issues with the donors and can jeopardize our relationship with the donor materially if we don’t do it right.”

So, after issuing a request for proposals and interviewing a handful of financial institutions, Rollins selected TIAA-CREF Trust Co. in St. Louis to handle both the administration and investment-management of its planned giving program.

Rollins is among a growing number of nonprofits that outsource planned-giving functions to banks, specialty firms and community foundations.

Those functions include developing planned-giving strategies and marketing materials, working with donors and their advisers, administering gifts and managing the investment of assets.

“Planned giving represents somewhere between 26 percent and 30 percent of current annual giving nationwide,” says Desiree Heller, vice president for philanthropic consulting services at the Minneapolis Foundation, which offers planned-giving support for local nonprofits.

“If with today’s budget cuts smaller nonprofits can’t afford to hire a planned giving officer,” she says, “what they’re missing out on is quite a bit of money.”

Other stories in this series:

Part 2: Planned giving an untapped resource for nonprofits.

Part 3: Nonprofits face questions in deciding whether to farm out planned giving.

Part 4: Managing investment of planned-giving assets involves complex tasks.

Part 5: Some nonprofits use multiple vendors to handle planned giving.

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