United States Capitol

Planned Giving

How much of the last $14 billion1 of growth in planned gifts did your organization participate in?

As we read and hear more about our nation’s economic future, no one can be certain of its impact on charitable giving and the nonprofit sector. However, we can say that for any charity where the bulk of their funds come from annual giving, we believe now is the time to add planned giving to lower long-term risk even in the face of market volatility and economic headwinds.

Particularly in the run up to any national election, there is always a degree of uncertainty which fairly consistently affects growth of annual funds. But it is reported that it will take until 2016 to replace the 7 million jobs lost during the 2008–09 recession. Job insecurity and economic uncertainty could alter American’s attitudes regarding gifts to annual fund or for membership since they are made from your donor’s discretionary income.

Also looming is the need for enhanced revenue for federal and state governments. It is our view that changes to the tax law and revenue are coming, now or in 2012–13. Faced with higher taxes, donors will consider planned gifts made in the donor’s lifetime or at death.

With a potentially slow decrease in foundation giving due in part to market volatility, nonprofits now should stay in close contact with their donors, supporters and friends, communicating regularly and often about how they are doing.

A unique aspect to our consulting is not only in the design of a planned giving program but also the capacity to serve as the interim management. Successful projects need specialist staff and a professional maturity few organizations feel they can provide themselves.

Our findings also suggest the majority of small to midsized charitable institutions are missing out on an ideal opportunity to help pre-retirees prepare by, for example, offering them advice2. For starters, people nearing retirement need financial plans specifically designed for them, but fewer than one-third of the respondents aged 55 and older we have interviewed during our last three feasibility studies reported that their financial providers had helped them create one and no one from the charitable organizations they supported had met with them to discuss planned gifts. Further, more than half of the average retiree’s net worth resides in real estate, yet only one percent of the interviewees had discussed gaining access to that home equity with either their financial institutions or their favorite charities.

To help people understand and use such specialized products, charitable organizations should develop sales models that incorporate donor and consumers’ attitudes toward them, particularly along the key issues trust, donor experience, and competence. Many donors fear product pushing and certainly distrust financial advisers who operate on commission—a key advantage for nonprofits. The one thing to never forget about donors: A satisfied donor tends to be more loyal than a dissatisfied one.

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YoungAssociates can provide your nonprofit with:

  • Resources within demanding time schedules,
  • Extensive fundraising and planned gift experience,
  • Fully skilled team, and
  • Professionals who can operate independently while you track online in real time.

This enables your development staff to focus on what they do best while your organization doesn’t miss out on the opportunities provided by planned giving.

Footnotes

1 Giving USA 2006 reported that total bequest giving in 1993 was $8.86 billion. Twelve years later, in 2005, the total more than doubled to $17.44 billion. Charitable bequests in 2009 were estimated to be $23.8 billion, a decline of an estimated 23.9 percent in 2009 (-23.6 percent adjusted for inflation). This reflects the unusually high level of bequest giving announced in 2008 by the Internal Revenue Service in its data released in late 2009. ?

2 The inter-generational wealth transfer is estimated by some to be $14 trillion by 2052. $6 trillion of that is estimated to go to nonprofits. ?

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