A Planned Giving Program does not require lots of dollars to implement. Simply put, it takes a mindset of the here and now, and developing a thoughtful and intentional stewardship plan with your current donors – starting today. Planned gifts ensure the future sustainability of a nonprofit organization.
1. Because if 20 percent of a nonprofit organization’s operating budget is not coming from its endowment fund by 2025, the organization will likely be in fiscal crisis, according to philanthropic advisors.
2. Because the conversation is not about a donor’s death. It is about offering donors the opportunity to experience this type of transformational giving during their lifetime.
3. Because a donor of any age can be a legacy donor. In fact, a recent study found that 40-49 year olds have the greatest number of charitable bequests IF they have a will.
No need for a background in Trusts and Estates. Focus on the simple. Focus on what you know. Focus on the concepts that nearly all donors know about. Encourage donors to remember your charity through your newsletters, website and other communications with messages as brief as “Have you remembered us in your estate plans?”
Here are 5 tools you can implement now to launch a scaled down planned giving program:
1. Bequests – Bequests are the cornerstone of most estate plans and among the easiest ways for donors to arrange a gift. Donors set up a bequest when they work with their attorneys or legal advisors to draft their wills and without requiring any technical expertise on your part. Your function is to encourage donors to remember you in their plans and perhaps answer questions about how a potential bequest might be used.
These 3 tools require only a beneficiary designation form completed by the donor:
2. Life Insurance – Life insurance is a wonderful yet often overlooked tool for making a gift. A gift can be set up by a donor, selecting your charity as a beneficiary of all or a portion of the policy’s proceeds. Or, a donor could give you a policy and your charity could either cash it in or hold it until a later date. A donor could even give your charity the policy, make annual gifts equivalent to the premium and let you take over the payments.
3. Retirement Plans – Individuals with a retirement plan, whether through their employer or their own Individual Retirement Account (IRA) or 401(k)s, 403(b)s and pension plans, can ordinarily select your charity as a beneficiary of the remaining balance or a portion of the balance. These gifts are arranged by donors contacting the administrator of their plans.
4. Financial Service Products – Your donors likely have certificates of deposit or other accounts at a bank or financial institution. Donors can select your charity as the beneficiary of these accounts or a portion of these accounts through a payable-on-death provision. Your charity would only receive the remaining balance of the funds upon the donor’s death.
5. Planned giving recognition society – You probably don’t consider a planned giving recognition society as a planned giving tool. You should. A planned giving society provides the vehicle to recognize those who have arranged deferred gifts. It’s also a way to remind others that they can make a deferred gift. If you don’t have a recognition level, you have an opportunity: Announce its formation to your donors and provide a way they can inform you if they’ve already arranged a gift. You might be surprised at the number of individuals who have already included you in their plans.*
*Remember to also offer anonymity to those who prefer not to be recognized.
For Sample Appeal Letters and Forms, reach out to Karen Minogue at email@example.com.
In our monthly column from Karen Minogue, Waccamaw Wisdom, we’ll unpack the latest in philanthropy and offer tips to make your giving more effective. Topic suggestions welcome at firstname.lastname@example.org.