Why Do Many Planned Giving Marketing
Efforts By Nonprofits Fail?
By Norman Olshansky: President
NFP Consulting Resources, Inc.
Nonprofit fundraising,
whether for annual, capital or endowment campaigns, is all about
relationships. This is one of the main
axioms of fundraising. (See Ten Basic
Fundraising Axioms http://nfpconsulting.blogspot.com/2009/09/fundraising-axioms-simplified.html
Planned gifts are major
gifts. Like with other major gifts, they
require proper prospect research by nonprofits related to the passions,
interests and philanthropic goals of the potential donor, followed by a
thoughtful cultivation process.
Since many planned gifts
utilize giving techniques that can be technical or somewhat complicated, such
as trusts, annuities, transfers of real property, insurance, etc., nonprofits
have depended heavily upon the advice and input of financial services
professionals (accountants, tax attorneys, investment advisors) for the
development of their planned giving programs.
While financial advisors are a very important component within a nonprofit’s
planned giving leadership, too often development professionals have focused too
much on how to structure planned gifts rather than on how to engage qualified
prospects to the point of willingness to consider making a planned gift. As a result, marketing efforts have typically
focused on charitable annuity tables, and a plea to “leave us in your will”
rather than a focus on the interests and values of the donor.
The first step in obtaining
charitable planned gifts is to identify prospects who care about your mission
and have charitable intent.
The quality of a gift is directly related to the
quality of the relationship between the nonprofit and prospect. Major prospects
deserve personal attention. Your nonprofit’s relationship to the prospect has a
direct impact on their gift. The more they know and trust the nonprofit and
their representatives (volunteers and staff), the more comfortable they will be
making a major gift. They need to know that they are getting accurate, current
and reliable information about the organization and the impact of their giving.
They also will be more comfortable knowing that the nonprofit, with whom they
have a relationship, is familiar with
their background, interests and abilities than would a stranger.
Planned
giving is an opportunity for the donor to leave a legacy gift.
The
dictionary has two definitions for legacy.
1. a gift by will especially of money or other
personal property :
2. something transmitted by
or received from an ancestor or predecessor or from the past
As
related to marketing of planned gifts, these definitions of “legacy” offer
great input. Why would a donor want to
leave a legacy through a planned gift? Is
it the motivation for the gift to serve as appreciation for the work of the
organization, or a memorial to a diseased relative, to honor someone, to set an
example for others, to pass on their values of philanthropy to children and/or
grandchildren, to sustain the organization about which the donor cares, to
endow their annual gift, to fund a program or service or scholarship long term,
to be recognized as a major donor while they are still alive, to thank the
organization for its past service to the donor or a family member, to be able
to make a more meaningful gift than they have in the past…. ? The reasons may be different for each prospective
donor.
Research
has shown that the best prospects for planned gifts are:
1.
Long term donors and volunteers who have demonstrated a commitment to
the organization (not gift size but more focused on length of giving)
2.
Those who are over 60 years old
Many
of these prospects are living off of unearned income, have concerns about their
ability to provide for themselves or other family members, long term. Their net
worth may primarily be in property or other assets, which do not produce income
or, at best, minimal interest. They are usually individuals who have been small
or moderate long-term contributors to the organization.
While
many charities have received bequests from individuals who had previously never
made a gift to the charity, most donors of planned gifts fit the
characteristics above when they made the decision to “plan” a gift.
Developing
a “relationship” with the prospect so that conversations can take place that
help the individual articulate what they care about, is the critical first step
once they have been identified as a prospect.
Once
the “solicitor” has acknowledged and demonstrated appreciation for their long
term support, and has determined some of the potential interests and
philanthropic motivations of the prospect related to your nonprofit, ask: “If you were in a position to make a legacy
gift to accomplish some of what you just mentioned, and you had the resources,
would you want to make a legacy gift or gift in perpetuity to our nonprofit”?
Typically,
they will respond that they are not wealthy or in a position to do so and don’t
have the ability to make such a gift.
Ask
what they would want to accomplish with a major legacy gift to the nonprofit,
if indeed they WERE in a position to do so.
Get them to talk about their passion for your nonprofit and their
interests.
At
the right time during that conversation, the solicitor can respond as follows:
“If
we could show you a way that could enable you to make a legacy gift, without
any cash out of your pocket and the possibility to receive income for the rest
of your life greater than you are earning from some of your investments, would
you be interested in learning more?
In
most cases, long term supporters will be curious as to what you are suggesting
and will be willing to learn more.
If
the solicitor is a planned giving professional they can continue the
conversation.
If it’s a volunteer or a staff member
without significant financial services knowledge, they should ask if it’s ok to
have one of the
organization’s
advisors set up a time to discuss with the prospect some of the ways they can
make a legacy gift and also receive income and significant tax advantages.
The
next step or meeting, once their interest has been established, would be to
determine what are the primary assets of the prospect (residence, collectibles,
life insurance, other appreciated assets, etc). Use of appreciated assets for
gift planning offers the donor additional advantages. In addition, a determination should be made
regarding investments in low performing instruments. (money market funds, CD’s,
bonds, etc.) With that information, the professional/advisor can suggest some
of the techniques that might best fit that individual. (Gift annuities, trusts,
life insurance, bequests, stock transfers, bequest, etc.)
It
is important to encourage the prospect to engage their own financial advisors
to make sure what is being discussed is appropriate based on more detailed knowledge
of their unique financial situation and needs.
The
nonprofit’s representative should offer to contact the prospect’s financial
advisor once the prospect has had a chance to initiate the discussion with
their advisor.
Marketing
for planned gifts is primarily a one-on-one engagement of the prospect, their
financial advisor and in many cases, their family.
Establishing
legacy societies and ways to recognize those who sign letters of intent to leave
a bequest by will, or have committed to a planned gift, are critical components
of a planned giving program. The more
planned gifts are recognized for the reasons the gift was made without emphasis
on the amount of the gift, the more such recognition will encourage others to
consider planned gifts.
However,
emphasis on marketing should primarily be on ways to identify and engage those
who fit the legacy gift profile. Brochures, emails, gift tables seminars and
engagement of financial advisors, while helpful, are not sufficient for the
development of a successful planned giving program for your nonprofit. The key to marketing your planned giving
initiative is to get good conversations with appropriate prospects started,
which is all about “relationships”.
How
would you rate the marketing for your nonprofit’s planned giving program?
