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Make 2010 the Year YOU Start Planned Giving, Part VI

A final "Hello!"

This is the last installment of my 2010 article series to get your planned giving program started this year. We started your program with charitable bequests because they are the simplest—and by far the most popular—planned gift. There's more detail on why to start with bequests in this article from 2009.

The year's previous articles can be found in navigation links to the right.

In this final episode, we look at other planned gifts you can promote with relative ease because they do not require in-house expertise.

Beneficiary Designations

Your charity can receive a gift from any financial asset that has a death beneficiary feature.

The most common example is life insurance. The organization can be named as a beneficiary to get the death benefit when the insured (your donor) dies. One life insurance policy can provide support for multiple charities by dividing the death benefit fractionally. That helps you overcome the objection "I'd like to include you in my long-term plans but I have other charities to support." You'd rather have 10 or 20 percent of something than 100 percent of nothing, which is what you'll get if you don't suggest sharing the death benefit with others.

This type of gift is typically seen among donors in their mid- to late sixties or beyond who bought life insurance for a particular purpose, say, to provide for college education or guarantee that the mortgage would get paid off in case of their untimely death. Those needs having been satisfied, the policy is now excess and ripe for charitable giving.

One policy can help your donor's family and nonprofits. Just as multiple nonprofits can be named as beneficiaries, family member(s) can be included in the mix as well.

Your donor needs only your legal name and tax ID number. That's the information he or she uses to complete the change of beneficiary form from the insurance company.

I hope you're not keeping your federal tax ID secret. It's too late. It's already public. It's part of your IRS Form 990 disclosures, and that form is available from the IRS, state attorneys general, and probably GuideStar. Don't keep the tax ID under wraps like your personal Social Security number. Publicize it, along with your organization's legal name, so donors can easily include you in their financial asset death distributions.

Beyond life insurance, any of the following assets may have a death beneficiary, payable on death (POD) or transfer on death (TOD) clause that can mean a long-term gift to your charity: 401(k) employer retirement plans; 403(b) employer retirement plans (think Fidelity or TIAA/CREF plans); individual retirement accounts of all stripes, such as Roth, traditional, SEP, and SIMPLE; commercial annuities; checking and savings accounts; and brokerage accounts.

Promote any of these in a sidebar in your first 2011 newsletter (why wait, and what are you waiting for?); in your next annual report; on your Web site; and in prospect and donor meetings. Urge your prospects to think about their assets that have death benefits and consider naming you in them. List the possibilities I named above in an eye-catching, bulleted list. Provide the two pieces of required information and tell them it's as simple as transferring the info to a change of beneficiary form.

When donors tell you they've named your organization as a beneficiary, welcome them to your recognition society. There's detail on inaugurating yours in October's article.

Living Trusts

These trusts aren't created for charitable purposes, but they can include a charitable gift of the remainder. People who set up living trusts want to avoid the court-supervised process of accumulating and distributing their assets after death. It's called "probate," and in some states it is slow. It's also public. Once each of us dies, our will becomes a public document, and all its hitherto secret provisions see the light of day. Some people prefer to keep their after-death distributions hidden from public scrutiny—and they seek a quicker procedure for liquidating their estates—so they create a living trust. These instruments are also called "revocable living trusts."

The trust details how assets are to be passed upon the death of the trust owner, and your nonprofit can be included in that distribution. In that respect, the trust is similar to a will.

You can figure out which of your donors already has a living trust by looking at the checks you receive. If any of them say, "trustee of revocable living trust" or "living trust" in the identification block, those donors are owners and trustees of this type of trust and are already using them to make gifts to you. That's because while living, all your donor's assets, including checking accounts, are put into the trust. (And in most cases, owners of these trusts act as their own trustees.)

If you identify trust owners, you can target a solicitation to them asking them to consider including you as a remainder beneficiary. You want to do that after you have a strong relationship. A serious call to action comes only after proper cultivation.

If you don't know of any living trust owners, you can still generally promote the idea with the methods I listed above for beneficiary designations. You might have constituents owning living trusts who aren't current donors.

Bountiful Bequests

Never abandon your bequest marketing in favor of other gift possibilities. Keep up consistent bequest mailings and other promotion channels, as described in previous articles, and the gifts will come in. Always think of the bequest gift having been made when the donor tells you they've included you in their will. That's when you say, "Thank you," and welcome them to your society.

If you have resources to promote only one planned gift, make it bequests. They are the bedrock of every program and it is perfectly respectable to stop digging when you hit bedrock.

Looking Back

Many thanks to my GuideStar editor, Suzanne Coffman, for all her work to make my writing cogent, and for recognizing the potential in my idea. And to you, my readers. I genuinely hope this series has helped you inaugurate your planned giving programs.

You have my good wishes for your holidays and year-end fundraising.


Read the Other Articles in This Series

Tony Martignetti, Esq., Martignetti Planned Giving Advisors, LLC
© 2010, Martignetti Planned Giving Advisors, LLC

Tony Martignetti, Esq. is managing director of Martignetti Planned Giving Advisors, LLC and hosts Tony Martignetti Nonprofit Radio, Big Nonprofit Ideas for the Other 95 Percent. He is a frequent speaker and trainer, and you can find him on his blog, LinkedIn, and Twitter.

Topics: Fundraising