Planned giving and estate planning can be rewarding ways for your charity to raise funds. Unfortunately, many nonprofits don’t have a program in place because of a lack of staff or experience with this giving method. Contrary to what many believe, no charity is too small to welcome donors who want to leave a bequest or provide some other form of legacy giving.
Here are some things to keep in mind as you approach planned giving with donors.
Find the right people
Candidates to target for planned gifts typically should be multi-year donors who have a history of supporting your charity. It’s important to note that the size of a single gift or the lifetime cumulative amount does not matter – it’s the longevity and consistency of giving over a long period of time. Many donors who give small monthly gifts of $15 have ultimately left a bequest worth many times more.
Be sensitive
Oftentimes major life events are triggers for people to consider creating or updating a will or trust. This might include becoming an empty nester or a death of a spouse. However, don’t wait too long to introduce the idea to your donors; once people reach a certain age, they often are reluctant to alter their will. Everyone is different, but we recommend introducing the concept of planned giving and estate planning when someone reaches 55. According to a report from the Hartsook Centre for Sustainable Philanthropy, the reasons most people make a giving plan are:
- Illness of the donor, a family member or a close friend
- Death of a relative or friend
- Difficulties sorting out an estate
- Family change such a birth, divorce or re-marriage
- Upcoming travel
- Purchase of a house
That being said, if someone is interested in planned giving, be straightforward about how the process works, instead of presuming that the discussion will make the donor uncomfortable. Often donors are already experienced in this area and are interested in leaving a legacy.
Recruit an expert
If you don’t already have an estate planning attorney on your board, you should find one! Their expertise will be indispensable as you recruit donors for planned giving. Donors sometimes have their own financial advisor or estate planning attorney, but often, that is not the case.
Don’t worry about the competition
Yes, larger organizations often are more skilled and experienced when it comes to estate planning. But that doesn’t mean that they own your donor. If you have a loyal donor base, it only takes a little effort for those supporters to include your organization in their planned giving. People give to organizations they love and where they believe their legacy gift will make the biggest impact – and that is often with a smaller charity.
Have a board-approved gift acceptance policy in place
It’s critical that your charity has a simple to understand gift acceptance policy. This will be helpful for the donor’s financial planner or attorney. It will help eliminate confusion about what type of gifts you will accept and will ensure you are in compliance with any IRS or state regulations.
Be willing to help
The main deterrent for individuals setting up planned giving is when organizations aren’t willing to work with them or the process is too complex. As long as you are willing and helpful, your donors will be open to including your organization in their giving plans.