Planned Giving for Beginners

Published on Wednesday, April 08, 2009
ARTICLES

The idea of starting a planned giving program from scratch, or trying to resurrect one that fell by the wayside years ago, may be overwhelming, especially with the demands of meeting your budget in the current financial climate already on your mind. At the same time, now is not the time to pass up any potential sources of revenue.

The solution is simple: Start a bequest program. In a nutshell, a bequest is a gift made through a will or living trust. Bequests make up the vast majority of planned gifts for any organization, even one with a more comprehensive planned giving program.

According to Giving USA, charitable bequests nationwide totaled $23.15 billion in 2007 - $7.46 billion more than all corporate giving combined. And the Center on Wealth and Philanthropy estimates that up to $27.4 trillionin charitable bequests will be made between 1998 and 2052.

Furthermore, a bequest program can have an immediate impact on your fundraising. Studies show that people who named a charity in their wills donated more than twice as much in any given year as those who did not - over $2,000 more on average.

While no fundraising strategy is immune from the type of turmoil we have seen in the financial sector over the past few months, a solid bequest program is an important way to diversify your fundraising portfolio.

Who makes bequests?

In principle, anyone who makes a gift to your organization during his lifetime is a potential bequest donor. Not surprisingly, single or widowed individuals and those without children are among the most likely to make a bequest. Income is not a factor. In fact, a bequest is a way for a donor of more modest means to make a generous gift without reducing the assets available during his life. Instead, look for repeated giving over a number of years.

According to the Center on Philanthropy at Indiana University, individuals aged 40 to 60 are the most likely to consider naming a charity in their will, while only 15 percent of those who decide to make a charitable bequest arrive at that decision after age 75. People in the first category are usually starting to think about their estate plans, and those in the latter group have already made most of their decisions.

Statistics aside, before donors will consider making a bequest, they must feel both a connection to your organization, and that you will have a long-term impact on a cause about which they care deeply.

How to start a basic bequest program

There are two steps to setting up a basic bequest program. First, let your donors know that you accept bequests. Unlike more complicated estate planning tools, bequests are very easy both for donors to establish, and for charities to accept.

Start putting sample bequest language for donors to discuss with their advisors in your materials as a standard operating procedure, for example:

I give, devise, and bequeath to ORGANIZATION NAME, TAX ID NUMBER, ADDRESS (insert amount, percentage, nature of gift or remainder of estate) to be used for general operations (or your designated purpose).

Remember: Bequests are revocable. So the second step in a bequest program: Invite donors to let you know if they have made a bequest to your group, and thank them. This can be as simple as sending a heartfelt letter from the president and treating the individuals like major donors from that point on - invite them to your organization's events, send them special updates and so on.

Stay focused on the basics above and your new bequest program will pay dividends in the years to come.

Melanie Hildreth is the director of donor relations and the Four Pillars Society at the Institute for Justice. Write her at mhildreth@ij.org.