A nonprofit new to planned giving should consider donor demographics, free or economical partnership opportunities, and be ready to make a long-term commitment.
What are three key areas to consider in starting a planned giving program?
Does your organization have the donor constituency that would make a planned-giving program reasonable? In other words, do you have people who are 70 and older and thus moving into the prime years for planned giving?
A lot of organizations I’ve dealt with will say, “Yeah, we’ve got those, but we don’t have birthdays in our database.”
You need to begin collecting this data. If you are a really “young” organization, with most donors in their 30s, a planned-giving program might be a lower priority in your overall development efforts.
It’s also important to understand why people make planned gifts.
Most people tend to start thinking about making a planned gift in the last five years of their lives.
So be sure to pay attention to donors as they age out of their prime annual-giving years, and stay in touch with them as they move into their prime planned-giving years.
For example, you might have loyal donors who, as they hit retirement, can’t afford to give as much annually, and so they fall off your priority list.
As a result, this longtime donor may get involved with another organization during this crucial period and end up writing them into their will instead of you.
Organizations not only need to recognize current donors, but also longevity and cumulative giving to tell donors that they’re still important as they age.
Finally, pay attention to the greater demographics of giving. Now is a great time to get started, while there are a lot of people in their prime planned-giving years.
But due to a pre-World War II birth-rate decline, in a few years this pool will shrink considerably.
Certain forms of planned giving can involve complicated tax and legal issues, and often hefty dosages of lawyers and tax forms.
For many organizations, investing in a partnership that will do the bulk of this legal and administrative work on an outsourced basis makes sense.
Setting up a fund through a community foundation is an ideal way for smaller nonprofits to get started in planned giving.
For example, the Foundation for the Carolinas, based in Charlotte, N.C., has a staff of attorneys who are well-versed in planned giving and are on call to assist nonprofits in these programs by filing tax returns and handling other details.
For religious organizations, all national churches have an office whose job is to serve church agencies in this very field. Their advice and help usually is free; it’s part of what your stewardship dollars pay for.
Also, many banks have become more interested in philanthropic services. They often host conferences, and their staff professionals work both with donors and nonprofit organizations in setting up gift annuities and other planned gifts.
Realize that an investment in a planned-giving program must be long-term; it is not a short-term fix for this year’s budget shortfall.
An organization we worked with let go its planned-giving officer after six or seven years, because “nothing had happened.”
When we got involved with them during the 90s, we realized that all the bequests that were coming in at that time could be attributed to his earlier work. Now there was going to be a large gap in such gifts, because this organization had given up on planned giving in the meantime.
Planned giving is something that, if you’re not going to do it, do it well, and do it for the long haul, I would suggest you just not do it.
–Compiled by Elizabeth Floyd
Tom Norwood is a partner at Capstone Advancement Partners, a Charlotte-based nonprofit consulting firm. He previously worked in the leadership of Davidson College’s development office and is founder of the Davidson Consulting Group, which merged with Capstone in 2006.