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Effective planned-giving programs

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Question:

What are three key elements of an effective planned-giving program?

Answer:

You need to have the board of directors or the supervisor of the planned giving officer behind the program. So you need buy-in from the organization.

You also need personal contact and cultivation.

Q:

How do get buy-in?

A:

The organization needs to be committed to a long-term cultivation of donors.

A planned gift comes from the donor who believes in the organization’s purposes, and also believes that the organization is stable and will carry through with the charitable purposes of the gift. Typically with a planned gift, the charitable purposes are to be accomplished in the future.

If an organization is starting a new program, it should not plan on receiving any contributions through the program for several years. Often, the charity only receives funds when the donor dies.

That’s where you need buy-in. The charity needs to provide staff support for several years for an effective planned giving program to start showing results, and even then it will probably be several more years before there’s a substantial financial benefit to the organization.

In the long-term, the benefit to the organization that it wouldn’t otherwise have is a future source of large financial gifts.

Q:

What are effective strategies for cultivating donors?

A:

First, education: The charity can be sending planned-giving materials regularly, but donors are most receptive at key milestones in their lifetimes.

For example, if a donor is selling a business, the planned-giving strategy of putting some or all of the business into a planned gift before the sale is consummated is very important, and information about that will only be relevant to a donor who is thinking about selling a business.

So the charity should continually be sending information to potential donors that is readable and interesting.

But the charity should know that only a few donors will be particularly receptive at any given time.

Second, keeping up a personal relationship: In a well coordinated planned giving program the planned giving officer will be making personal visits or telephone calls, and the charity will be inviting the potential donors to activities and programs, such as a reunion at a school.

Human-interest stories about completed gifts [about donors?] also are useful. That way the charity can tell about a particular gift in a way that lets people think, “Well, I could do something like that.”

The organization also needs to strike a chord with potential donors about something they want to change or ensure in the future, like preserving a natural area to be available for future generations.

For the donors to make a charitable gift, they need to know what the opportunities are at the organization.

Q:

How can a charity find and connect with potential donors?

A:

People on the board with contacts, and the officers of the charity, should work with particular donors to encourage their involvement.

Charities also can use two kinds of advisory boards.

One type of board consists of professional advisers who become knowledgeable about the charity and can then recommend the charity to their clients.

Another type of advisory board consists of potential supporters, both donors and people who have beneficial contacts for the charity.

This board is provided with information about the organization’s programs and plans, and given an opportunity to provide feedback or suggestions so the advisory board members feel a part of the organization.

Q:

What are the benefits of a planned giving program?

A:

Planned giving programs provide flexibility to a charity in how it raises money.

Within the tax rules, there are many ways to structure programs to meet the needs of donors and the needs of the organization.

So a donor and the charity should work to identify what each wants, and communicate that to their respective professional advisers.


Ranlet Bell is of counsel to the firm of Womble Carlyle Sandridge & Rice PLLC in its Winston-Salem, N.C., office and works almost exclusively with nonprofit organizations.

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