The headlines are buzzing about “The Great Wealth Transfer.” It is estimated that more than $70 trillion will be passed down from Baby Boomers to their heirs – with $10-12 trillion estimated to be donated to charity through 2045. Amid high inflation, overall giving is down, yet the number of donors making planned gifts has grown.
Planned giving seems to be having a moment. All of us hear stories of that miraculous $1M gift that appears out of nowhere and think, I want that too! So, what’s a nonprofit to do? To learn more, I chatted with Bruce Temkin, a consultant focusing on planned giving for smaller nonprofits, to get his thoughts and wanted to share his insights.
Let’s start from the beginning – what exactly is planned giving? Is it the same as legacy gifts?
As the name implies, it’s planned – it must happen when the donor is alive. It usually involves others (e.g., spouse, lawyer, accountant) and is often a donor’s largest gift, but planned giving is a technical term, whereas legacy giving captures the spirit of why a donor makes such a commitment. Whether you use planned giving or legacy giving, it isn’t just about future giving, but can also include immediate giving, such as stock gifts and IRA distributions.
Why should nonprofits be interested in planned giving?
Let’s look at it from both directions. From the donor side, you’re enabling your most loyal supporters to show their values by making an ultimate gift to your organization – for their legacy to live on! From the nonprofit’s standpoint, you have a chance of bringing in steady, recession-proof income.
Planned giving seems so intimidating. Do I need a lawyer to help me start a program?
Absolutely not! You’re not providing your donors with legal advice; you’re just inviting them to deepen their support for your organization. In fact, I encourage using simple language that everyone can understand. Over 90% of all planned gifts are bequests and beneficiary designations (e.g., IRAs, retirement accounts). Just having language on your donor communications and your website asking people to notify you if they’ve already included your organization in their estate plans is an easy way to get the conversation going.
What is the first step you’d recommend to take action on planned giving?
Make sure you have a strategy and stick with it. Planned gifts take time to develop, so be realistic and consistent with your timeline. Think about how to incorporate planned giving into your overall fundraising. The first step is to educate your board and staff on planned giving, so they understand how it will benefit your donors as well as your organization. They may even be the first to join your legacy society – if they are already serving on your board, they are likely prospects! The second step would be to encourage donors to hand-raise – make it easy for them to share if they have already included you in their estate plans. Finally, an important and often-overlooked step is to steward those donors who have notified you of their future legacy intentions in a way that fits your organizational culture.
Many nonprofits are a bit timid about making the ask. How do you help them rethink it?
You’re absolutely right: I find that board members and development staff can be so brave at asking for big immediate gifts, yet shy away from a bequest ask. I would shape it as a question: as a long-time supporter, what do you want your legacy to be with our organization? What values or impact would you like to make here in 10/20/30 years? Remember that they can also make a contingent planned gift, meaning that it would only go to your charity under certain circumstances.
Who are my best prospects?
In general, your best prospects are your most loyal donors, regardless of the amount they donate. Your biggest bequests will probably surprise you, so don’t make assumptions based on what your donors are currently giving or their wealth.
What should I include on my website and donor communications?
Consider weaving planned giving messages into all your donor communications – you should always be planting the seed. Do this by adding a checkbox on your pledge card for donors to indicate an interest in planned giving. You can also add basic information easily to your website with your charity name, Tax ID number and internal contact for additional details.
Planned giving is more than a fad – it is a trend that will continue as the population ages and wealth is transferred. We want to thank Bruce Temkin for his insights and look forward to sharing even more about planned giving in future blogs. We’d also love to hear how you’ve encouraged donors to support your organization through planned giving.