Planned giving often ranks as one of the most intimidating forms of fundraising. However, planned giving is a sleeping giant, capable of directing significant gifts to your nonprofit through donor-advised funds, bequests, beneficiary designations, and other planned giving vehicles.
Help planned giving pay off for your organization by avoiding these five common mistakes in the planned giving sector.
1. Donors Always Plan their Legacy Gifts
Planned giving is often described as a donor leaving a legacy to a charitable organization. While that sounds like a noble and exciting idea anyone with the means would want to adopt, it is not always the case that donors decide to leave a planned gift on their own.
The truth is, planned gifts are often the result of diligent and thoughtful outreach and education by a nonprofit. Donors wish to know how their gift will be invested and may have specific wishes for their sizable donation.
And the work doesn’t end once a gift is secured. Bequests in particular are often reviewed annually. This means savvy fundraisers keep their mission top of mind for planned giving donors who have promised a legacy gift. It is important to update and inform planned giving donors regularly as a way to maintain their support for your mission.
2. Planned Giving is Too Complex
Charitable gift annuities? CRATs vs CRUTs? Grantmaking opportunities available through donor-advised funds? While there is a learning curve to planned gift vehicles, fundraisers must commit to learning and understanding the basics. Also visit our glossary for a comprehensive listing of planned giving and estate planning terms.
Another important aspect of educating yourself about planned gifts is knowing your limits. Legacy gifts often require legal intervention to make them official, like a codicil required to update a bequest. Fundraisers should know enough about these gifts to realize when they need to hand their donor off to an attorney or other advisor to complete the planned gift.
3. Planned Giving Should Be Passive
Legacy gifts often require the death of the donor before they arrive at the nonprofit. This fact alone can make fundraisers feel wary about bringing the topic up with donors. (Learn how to initiate the conversations.)
However, planned giving should be honored for its unique purpose. Fundraisers can take heart knowing these gifts establish a legacy for donors, whether they are alive to experience the result of their gift or not.
4. Planned Gifts are Always Deferred
If you’d rather avoid discussions of mortality, you should know not every planned gift matures upon the death of the donor. There are plenty of planned giving vehicles that do not involve deferred gifts.
Options like a charitable remainder trust or donor-advised fund are still planned giving tools but they involve living beneficiaries. Sometimes the donors maintain an involvement in the investment of their planned gift, like through donor-advised fund grantmaking.
5. Stewardship is Less Important with Planned Giving
As previously mentioned, stewardship is still essential with planned giving because donors can and do amend certain planned giving vehicles frequently. However, stewardship matters for more reasons than that.
Stewardship with planned giving develops a special relationship between the nonprofit and the donor. Consider developing a specialized newsletter for this audience, filled with information about new research affecting your cause and upcoming plans for the organization. This messaging helps current and prospective planned giving donors visualize how their legacy will contribute to your enduring mission.
One stewardship tip: if you have secured a planned gift that matures when the donor dies, ask if the donor would like anyone to be contacted by the nonprofit once it receives their planned gift. Some donors take comfort in knowing there will be due diligence with their gift, yes. But also that their memory will come alive for their loved one again through acknowledgment of this successful planned gift.
A related, must-read post: You Had Me at Bequest by Mindy Aleman.
These common planned giving myths keep planned giving at the bottom, or even, falling off the end of the priority list. But it’s vital to unravel the truth about these technical but rewarding forms of fundraising.
Start slow with your education and what you share with your donors, and make sure you have a professional consultant to provide advice. And remember, you can never lose by investing in stewardship and authentic connection with planned giving donors.