Legacy Giving and What You Need to Know
The last two years have seen an uptick in the preparation of wills and settling of estates. While this is a sad subject, many individuals choose to pass some of their wealth on to great causes after they pass. Nonprofits that are not prepared to accept legacy gifts should read one to learn how to thoughtfully introduce this difficult subject to its donors. Legacy or planned giving can help nonprofits establish long-term sustainability while bringing donors into the life of your organization. Additionally, donors can leave a substantial and meaningful mark on an organization.
Should your nonprofit begin a legacy giving program?
Although less than six percent of Americans include a charitable gift in their will, one-third of American’s claim that they would consider it when asked by an organization. Furthermore, in the next decade, $30 trillion in inherited wealth will be transferred through wills from the Baby Boomer generation. $30 trillion. Now you may be thinking, one third is willing to “consider” a gift, is that really a large enough number? Well, first let’s take a look at the numbers surrounding the size of those gifts. Bequests from middle-class donors frequently exceed $100,000, and some colleges report that their typical bequest is 2,500 times their average annual gift. US nonprofits received more than $30 billion in bequests in 2016 according to Giving USA. Even if growth from 6% does not reach 33%, a slight increase in gifts averaging $100,000 or more is highly impactful. Research has shown that when individuals are asked about charitable bequests by estate planners during the planning process the number that includes a bequest rises from under 6% to 10.4%.
So, we have seen that nonprofits are missing out on substantial gifts every single year. More importantly, an increase in giving is likely by implementing a simple strategy and quality communication. We have gathered some tips together to help nonprofits begin and find success with a legacy/planned gift program. Take a look below…
1. Make planned-giving a team-wide effort
So many organizations reserves planned giving efforts for high-level staff working with high-level major donors. As the numbers show above, middle-class donors are giving bequests in excess of $100,000, not a small gift at all. Don’t give planned giving responsibilities solely to one person. Communicating these gift opportunities must be more widespread and only communicated to major donors as we have seen with the numbers on middle-class gifts. Similar to traditional gifts, do not underestimate the power of many small, consistent donors.
2. Gather data from your audience
While we have covered some of the numbers related to planned giving, it is important to gather your own data because every nonprofit and its audience is different. To gather the right data for a starting point, nonprofits should ask their audience whether they have included the organization in their estate plan? If not have, they considered it? If yes, what led them to include the organization? Understanding the numbers on how many people are considering a planned gift coupled with the motivation for those who already have is monumental in building a planned giving strategy going forward. Keep this research process cordial and do not badger donors with questions about their planned giving beyond what is necessary as this topic can be somewhat uncomfortable.
3. Simplify planned giving
As stated above, many individual schoose to give simply by receiving more information on the subject of planned giving. For many, without the suggestion and help, planned gifts are never planned. Start by creating tools to help your donors create a planned gift. Early on, this can be as simple as information on attorneys that can help them draft a legal will or blogs like this one that offer information on a relatively unknown subject. The planned giving sector is in need of development and nonprofits must work quickly and correctly to take advantage of the massive amounts of wealth being transferred between generations.
Need help developing your nonprofit’s strategy? We have developed all types of strategies and plans for nonprofits in 20+ countries, and we pass our experience-based insights on to our clients every single day. Let us help you advance your nonprofit today.
