Five steps for launching planned-giving programs

Chris McLeod
Chris McLeod

Julia Vail

RALEIGH, N.C. – Nonprofit organizations miss out when they let the technical aspects of planned giving intimidate them, Chris McLeod, vice president of the Greater Charlotte Cultural Trust, said at the N.C. Center for Nonprofits 2008 Statewide Conference.

The trust, formed by a partnership between the Arts & Science Council of Charlotte-Mecklenburg and Foundation for the Carolinas, is dedicated to helping cultural organizations build endowments through planned giving.

Nonprofits get scared away by terms like “flip trust,” “charitable-gift annuity,” and “pooled-income fund,” McLeod said, even though about 85 percent of planned-giving falls under the category of simple bequests.

“People let the 15 percent of the technical get in the way,” McLeod said. “What I hate to see is these small hand-to-mouth organizations deciding not to wade in because they feel they don’t know all these prerequisites.”

Add to this the awkwardness of broaching the subject of death, and it becomes even less likely that nonprofit staff will bring up planned giving with their donors, McLeod said.

However, planned giving provides a great way to build not only lifelong relationships with donors, but also strong endowments, she said.

Since planned gifts tend to be unrestricted, nonprofits are able to use funds how they see fit.

“Most people who make major gifts make them for particular buildings or programs, not for operational costs,” McLeod said. “Also, most organizations lack the discipline to take a huge chunk of money and put it into an endowment.”

McLeod outlined five steps nonprofits can follow to ease the process of starting and publicizing a successful planned-giving program.

Start with the board

To make sure planned giving works for their organizations, nonprofits should get their boards involved first.

“The board’s role is the long-term fiduciary well-being of the nonprofit,” McLeod said. “So if the board won’t get involved, your nonprofit probably isn’t ready for a planned-giving program.”

Not only do boards invest in the sustainability of the organization, but they also get the word out to other potential donors.

“Board members have to be familiar with the logistics as well as the emotional and spiritual aspects of the nonprofit,” she said.

To give board members a sense of ownership in the mission, organizations should begin by drafting a “planned-giving wish list.” This list of specific goals works to inspire potential donors and give them a better idea of what their gifts will set in motion.

“It gives people food for thought about the impact of a planned gift,” McLeod said. “It also serves as a donor conversation starter and a way to get feedback.”

Find a community foundation partner

Nonprofits should pair with community foundations to increase visibility in the community and provide a partner that understands the ins and outs of planned giving, McLeod said.

Partnering with community foundations ensures that “investments are controlled locally, invested well and managed properly,” McLeod said. “What it tells donors is, ‘We understand what’s important to you.'”

When nonprofits get involved with community foundations, they also get publicity through the foundation’s annual reports and events.

“You often get access to people who wouldn’t otherwise be familiar with your mission,” she said.

Community foundations also anchor nonprofits during times of change. As nonprofit staff come and go, foundations provide consistent guidance and an archive of information.

Integrate planned-giving messaging

Nonprofits should utilize their websites and newsletters to give potential donors a way to get involved.

Annual-fund mailings should include an option for donors to receive information about planned giving or include the organization in their estate plans.

“Your donors actually want to make planned gifts,” McLeod said. “Having these conversations with them can have a significant impact of the number of opportunities for your organization.”

Form a donor-recognition society

In order to attract donors to a planned-giving program and keep them actively involved, nonprofits should make a point to advertise what their donors’ charitable dollars are already doing for their missions.

“Give your donors a chance to wave their hands in the air and acknowledge that they’ve made an impact,” McLeod said.

Some of the ways nonprofits reward their loyal donors are special events for family members, handwritten thank-you notes and inclusion of their personal stories in marketing materials.

Many nonprofits form “legacy societies,” or lists of donors who have made planned gifts.

“The least you can do is treat them like family,” McLeod said. “Especially since these are funds that their own family isn’t getting.”

Aside from making donors feel good about their contributions, legacy societies give visibility to planned-giving donors and make others want to get involved.

“You need to treat them like the investors they are in your future,” she said.

Start asking

In the wake of the credit crisis, many organizations have canceled their annual fund drives out of respect for their donors’ financial situation.

“This is a bad idea,” McLeod said. “You’re essentially telling donors you don’t need their money.”

The principle is the same for both major gifts and planned gifts: If you don’t ask, donors won’t give. And planned-giving programs allow nonprofits to tap into wealth that annual campaigns do not, McLeod said.

“People who give to your annual fund give out of their checkbooks,” McLeod said. “If you’re not in the planned-giving game, you don’t have a chance to capture a portion of your donor’s assets.”

Instead of spending valuable time learning the planned-giving lingo, McLeod says nonprofits must communicate their goals clearly and give donors a sense of long-term ownership in charitable missions.

“People don’t wake up in the morning and think, ‘I want to start a charitable-gift annuity,'” she said. “They think, ‘I want to make sure every child gets an education.'”

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