Making the ask, Part 2

By Todd Cohen

Before even thinking about when and how to approach donors about planned gifts, charities should make sure they are equipped to handle planned giving, experts say.

“There’s a real need out there for small organizations to get some help getting started in planned giving, and they don’t have any model,” says Tom Smith, senior philanthropic adviser at the Vermont Community Foundation in Middlebury. “They need money to get help, and they can’t get money without help.”

Third-party providers such as banks and trust companies will manage planned-giving programs for charities, he says, but paying their minimum fees typically requires that a charity have at least $1 million in assets to generate the revenue to cover those fees.

“It’s very difficult for small organizations to get started,” he says.

Kathryn Miree, a consultant in Birmingham, Ala., says charities are not likely to be effective at planned giving unless they first do a good job developing their annual-giving programs.

“If the organization does not have discipline and infrastructure and stewardship,” she says, “then you may talk to a donor and even get a positive response from the donor, but you may lose both the gift and the donor.”

Before launching a planned-giving program, she says, an organization generally should be at least 10 years old with an annual-giving program that grows every year in dollars, donors and donor-retention.

Generally, 10 percent to 15 percent of a charity’s donors should have contributed to the organization for five or more years before it should aggressively launch a planned-giving program, she says.

The charity also should have a major-gifts program that is growing each year “because that is the relationship-based part of your giving program,” Miree says.

“In the end,” she says, “I want to know how many donors there are with the potential for planned gifts.”

Other stories in the series:

Part 1: Timing, trust key in asking for planned gifts
Part 3: Planned-giving program can begin with simple steps
Part 4: Nonprofits study giving patterns to identify planned-giving prospects
Part 5: Strategies vary for timing requests for planned gifts
Part 6: Planned gifts can flow from conversations about other donor issues

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