When your planned giving program grows up

Robin Ganzert

Veteran development professional Robin Ganzert offers advice on the planning and infrastructure nonprofits need when they are ready to move beyond bequests.

Planned giving is truly the philanthropic force for the future. A planned giving program is the key that nonprofits need to take advantage of the upcoming wealth transfer.

Nonprofits here in the U.S. have the luxury of terrific support groups for planned giving, often in their own backyard – planned giving councils.  

The National Committee on Planned Giving has statewide and local chapters throughout the country providing education and professional development. 

In order to understand what the change to a fully developed planned giving program means for their organization and how to explain this effectively to the board, nonprofits need to start getting educated through workshops and other training programs offered by such councils and consultants.

On the technical front

In building an infrastructure, the nonprofit needs to develop a strategic policy that defines what types of gifts the nonprofit will accept and how they will accept them.

  • Gift acceptance policy and strategy

Your gift-acceptance policy should cover whether your organization will accept certain gift assets, gift levels and gifting vehicles

Possible outright gifts to consider include: cash, appreciated securities, real estate, life insurance, art, oil and gas interests, partnerships and antiques, for starters. 

Charitable vehicles beyond the bequest, such as charitable remainder trusts, charitable gift annuities and donor-advised funds should also be addressed.  

Gift acceptance policies should also include gift minimums, structures, and the related procedures for accepting a gift.   

What is important in this conversation is to match your own nonprofit’s tolerance level for risk and complexity with the type of gifted assets you are willing to take.   

Some charitable gifts carry great risks for the organization, and the gift acceptance policy permits the nonprofit to decline and gracefully encourage the prospective donor to provide a gift that can better meet the strategic needs of the organization.

Your gift-acceptance strategy serves as the basic framework for all giving, although such policies are usually not developed at most organizations until the nonprofit begins a planned giving program.

The gift acceptance policy is not only a primary risk-management tool, but can also serve as a communication vehicle to use with professional advisors and donors.

  • Process and procedures

Besides a gift-acceptance policy, the gifting process, the receipting, the accounting, the severance, the investing and the reporting should be also be clearly defined so that the impact of the program across the operational areas can be managed. 

If your organization chooses to accept more complicated gift vehicles, such as charitable remainder trusts and charitable gift annuities, your policy also should deal with issues of trusteeship, investment policies and investment management. 

Investment policy statements for planned gifts should differ from investment policies for your operating reserve or endowment.  

Exactly how they differ depends on the nature of a particular planned gift, its particular time horizons and risk parameters, and state legislative requirements, if applicable.   

Collaboration between experienced planned giving professionals, the board and investment professionals is essential during the investment policy statement development.

  • Administration

After an organization sets up its policy infrastructure with a gift acceptance policy, investment management policy and procedures guidelines, a key next step is planned gift administration.

For charitable remainder trusts, you will need someone to handle payment distributions, trust revaluations, reporting and tax filings. 

With charitable gift annuities, the administration is even more complicated.

There are required state registrations in states where donors reside, annual state filings that may be applicable, frequent annuity payments, reserve calculations and a whole host of other issues that make charitable gift annuity administration a crucial decision an organization needs to consider upfront.

Whether to hire in-house council or outsource is a key decision. You could manage the program in-house entirely, in-house partially, or outsource all gift administration.

You should make these decisions based on your organization’s staffing and skill set, particularly in the finance, legal, IT and development offices. 

There are a variety of consultants that can assist an organization with a start-up charitable gift annuity program and help train a staff team to manage ongoing activities internally. 

  • Training

Educating your board and staff is an ongoing effort.  

The board needs to understand that a planned giving program is a long-term venture, requiring thoughtful donor cultivation and stewardship. 

The board also needs to set the standard by becoming planned giving donors and promoting the cause in their local community.

From the staff perspective, this can be a very technical business rooted in tax code and private letter rulings. But the conversation must be adapted to the philanthropic dialogue for real donor engagement.  

  • Marketing

It is extremely important for donors to know you have a planned giving program, and you must plant these seeds frequently.

The best way to do this is through messaging that is congruent with what the organization is already doing and is tied to its mission and its vision.  Marketing a planned giving program takes long-term commitment and creativity.

Robin Ganzert is deputy director of donor relations at the Pew Charitable Trusts. Previously, she served as senior vice president and national director of Wachovia Nonprofit and Philanthropic Services.  

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