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Get Going On Planned Giving

In the midst of our recession there's greater interest in gifts from estate plans, as donors have less disposable income to donate right now. In any economic climate, planned giving programs help build endowments, cement lifelong relationships with donors, and create a long-term stream of income. Here are ideas to kick-start your organization's fundraising with a planned giving program.

Before you start. Your nonprofit has to be at least 10 years old. You'll be asking donors to put the organization in their estate plans, so they've got to be secure in the knowledge that it will live longer than they do. If you've been doing your good works for 10 years, donors will be more comfortable thinking about you in their long-term planning, because you're more apt to be around for the long term.

Identify your prospects. Look at age and giving history. If you don't have the former in your donor records, use just the latter. The best planned gift prospects are those 55 and over who have been giving to you consistently for many years. When assessing giving consistency, ignore gift size. If someone has given you a mere $10 a year for 17 out of the past 20 years, they're a terrific prospect.

Your analysis can be more sophisticated if you want to slice it by type of planned gift, looking at which ages and giving patterns identify a propensity for which type of planned gift, but I'm talking about getting you started in planned giving, not having a mature program in year one. See the next section.

Start basic, not big. Bequests—a gift to your nonprofit in a donor's will—are the bedrock on which we build all planned gift programs. Bequests far outnumber all other gift types, irrespective of charitable mission. They're the simplest gift to understand, your donor can change his or her mind, a donor doesn't have to tell you about a bequest, there's no lifetime cost, and everybody needs a will.

If you're a small or medium-size nonprofit, start your program with bequest marketing. Use direct mail focused on bequests if you can afford it. If not, put a sidebar in your existing publications or a paragraph in your e-mails. Have a check-off box on every donor reply card that says, "I have included you in my will." Put the same thing on your online giving page.

Start saying "thank you." As soon as someone informs you that they've included your organization in their will, send them a thank you note. Have your executive director or a board member sign it. If you have a board member (or other volunteer) who has included you in their estate plan, ask him or her to write the note.

When you have 25 or so bequests, you're ready to start a recognition society, to formalize your gratitude process. Name your society after someone or something iconic to your organization. We have a client with "The Bell Tower Society." Try to stay away from "The Legacy Circle" and "The Heritage Society," as these could exist anywhere, and there are too many of them already.

You might host an annual luncheon or reception for your members. If you can't afford that, perhaps you can offer preferred seating at an event you're running, or a VIP reception before something larger. You don't have to spend a lot of money. You do have to show genuine gratitude. Bequests are revocable, and you don't want your donors keeping company with the roughly 4 percent of bequest donors who change their minds.

Take their word. I counsel our clients not to ask for bequest documentation. No paperwork will make the gift irrevocable, and you risk offending your donors. Might they lie about their intentions? Not likely. Most people aren't going to bother lying just to get a free lunch. I've been in planned giving for 12 years, and I've never become aware of a faker among our clients' donors.

If a donor offers you documentation, accept it graciously and safeguard it.

You can make bequests irrevocable using a "testamentary contract," also called a "contract to make a will." Your donor commits their estate to a certain gift by signing this instrument, usually so they can get public credit. You wouldn't give credit to a revocable gift because you would end up embarrassed if it doesn't come to fruition through the donor's estate. But these agreements are an advanced topic for a more mature program. We're just trying to get started.

Be satisfied with bequests. For many nonprofits, a bequest program alone is a very respectable planned giving program. They don't have the staff time or expertise to promote more sophisticated, harder-to-close gifts, which will always be vastly fewer in number than bequests.

There are many other gift alternatives, such as multiple varieties of charitable trusts, charitable annuities, life insurance, real estate, pension and retirement plans, and other beneficiary designations. Some or all of these might be appropriate down the road.

I talk to organizations all the time that can't get started because they're overwhelmed by the possibilities. Get started with a simple bequest marketing program. Then see where you are after two to three years in terms of budget, staff time, and expertise.

This is a plan to get started in planned giving. It's simple and basic—and effective.

Tony Martignetti, Esq., Martignetti Planned Giving Advisors, LLC
© 2009, Martignetti Planned Giving Advisors, LLC

Tony Martignetti, Esq. is managing director of Martignetti Planned Giving Advisors, LLC, a planned giving consultancy that works with a wide range of educational, cultural, social service, religious, and healthcare institutions to create donor opportunities by building planned gift programs.

Topics: Fundraising