Planned Giving Myths, Facts, Stats, Ruminations

Motivate Your Board and Your Team

For the text-only version, click below (although the slides above are more informative!). Here’s the PowerPoint version.

Myths & Facts

Cash is king.

Only 5% of this nation’s wealth is in cash. The other 95% is in assets like stocks and property.

Planned gifts aren’t worth all the effort they require.

The typical completed planned gift is 200 times the size of a donor’s largest annual fund gift.

Planned gifts take too long.

The average time from inception to maturity for a planned gift is 7-10 years. That’s only a few years longer than most campaign pledge periods.

But we need cash now! 

Studies show that those who include a charity in their estate plans (the definition of planned giving!) also increase their outright giving by about 75% — and it stays up.

We don’t have very many planned gift prospects.

Your planned giving prospect pool is probably much larger than your capital pool—it may be up to 5 times larger!

We are not ready for planned giving. We’ll get to it someday, though.

“Someday” is a code word for never. If you wait for perfect circumstances you will never start. You are ready to begin today.

I need to be an expert on gift plans and tax laws before I start asking for planned gifts.

Planned giving is a people business. If you love people and know how to talk to them, you can ask for planned gifts. Get attorneys and advisors involved only when it’s time to work out the details.

I’m not a lawyer, CPA, or CFP. I won’t understand planned gifts.

It’s not rocket science; many of the best planned giving officers aren’t qualified in those areas either — at least on paper. If you care about donors and your organization, you can lead a planned giving program. The donors’ lawyers and financial advisors do the rest.

Planned giving is too complex for me.

No, your job is actually straightforward: You’re simply encouraging those who already love you to include you in their estate plans. The donors’ lawyers and financial advisors do the technical stuff.

Planned giving is too time-consuming.

1 hour a week for 1 year. That’s all it takes to start getting planned gifts.

Planned giving is too expensive.

Too many nonprofits are penny-wise and pound-foolish. You can easily miss out on $500,000 in bequests just to save $3,000 in your marketing budget.

If we ask people for a planned gift, they’ll stop giving cash now.

People who make gifts through their will typically increase the amount of their annual support, often by up to 75%.

Planned giving is too intrusive; donors will object to us meddling in their affairs.

Legacy donors are among the most connected and supportive there are. You’re not meddling; you’re helping them realize how they can make the gift they most want to make.

Planned gifts compete with major gifts.

Most planned giving prospects are not prospects for major gifts. Major donors are truly wealthy, the “millionaire” types. Planned giving donors, generally, are not. Major giving and planned giving are two separate donor prospect categories.*

*A blended gift (i.e., a planned gift structured into an outright gift) can often dramatically increase a major donor’s total gift.

Planned gifts distract from capital campaigns.

Capital campaigns typically focus on 5% or less of the donor base. Planned gifts reach the “hidden constituency” (your most loyal donors). Planned gifts provide up to 30% or more of comprehensive campaign totals.

But we don’t have lots of rich donors!

Almost anyone can include a generous gift in their estate plan, and they don’t necessarily need a lawyer to do it. They can name you as a beneficiary of their retirement plan with 15 minutes’ work, no legal fees, and no impact on their daily cash flow.

Planned giving donors are wealthy.

No, they generally are not. One of the best-selling points of a planned gift is that it does not affect your cash flow — and that makes it accessible to people of all income levels. It’s “philanthropy for the rest of us.”**

**IMPORTANT
Your best prospects are your most loyal donors, not necessarily your wealthiest. The highest predictor for a planned giving prospect is institutional loyalty.

Planned giving donors are old.

43% of bequests are created by individuals younger than 55, and 15% of all planned gifts are by those younger than 45.

A bequest isn’t worth pursuing. People change their wills all the time.

While 69% of donors change their wills, only 25% change a gift in their wills.

Planned giving prospects are older, which means they’re not online.

The number of seniors using the internet has skyrocketed. They’re tech savvy, own smartphones and tablets, and are looking for your planned giving website.

All planned gifts are deferred gifts.

Gifts of stock, annuities, real estate, charitable lead trusts, and IRA gifts such as qualified charitable distributions can be immediately put to work. Other gifts, like bequests, can be realized in less than five years.

Planned gifts market themselves.

Most people aren’t even aware that planned giving is an option! Add in the fact that more than 68 percent of Americans lack an estate plan, and it’s easy to see the need for a robust planned giving marketing program.

My donors don’t want to make planned gifts, because the future is uncertain.

Almost all planned gifts are easily changeable or revocable. That gives donors the flexibility to adjust or even eliminate a planned gift should their needs change.

Estate planning is only about protecting family and assets. People don’t think about gifts to charity when writing their wills.

While protecting loved ones is the primary goal, an estate plan is also a reflection of a donor’s personal values. Including planned gifts to causes a donor supports is a powerful way to shape their legacy.

We’ve tried planned giving. It doesn’t work for us.

When planned giving programs fail, it’s usually because of poor marketing. Donors cannot give if they’re unaware of your program. Consistent, strategic marketing is the only way to raise more and bigger planned gifts.

Asking for legacy gifts is like asking for someone else’s inheritance.

Charitable planned gifts generally make up just a fraction of an entire estate. You are not asking supporters to neglect their loved ones—you are asking them to consider shaping their own legacy while also protecting their families.

A will is the only way to make a planned gift

Legacy gifts can also be made through beneficiary designations of bank, investment, and retirement accounts, as well as through life insurance.

Our organization is too young for planned giving.

It doesn’t matter if your nonprofit is a century old, or just starting out: Your loyal donors want to support you, and a planned gift is often the easiest way to do that with no impact on their day-to-day cash flow.

There’s no reason to target people without heirs, or single people. They don’t need estate plans, and don’t care about their legacy.

The truth is often just the opposite: Donors without heirs are keen to establish their legacy in some other manner—often through their support of a beloved cause such as your mission. 

We don’t need to market planned gifts to consistent annual donors who give only a few dollars. They don’t want to give more, or lack the means to give.

Your consistent annual donors are your most loyal supporters—no matter how small the gifts. They’ll jump at the opportunity to make a larger impact on your mission through a gift that costs them nothing during their lifetime.

My donor’s children will object if the donor makes a planned gift.

Many donors discuss their estate plans with their families first. Philanthropy is often a family affair; look for ways to involve the entire family in a donor’s gift.

Statistics

  • A typical planned gift is 200 to 300 times the size of a donor’s largest annual gift.
  • Foundations facilitated 21% of nonprofit gifts in 2022 — about $105.21 billion!
  • Americans gave $499.33 billion to charity in 2022.
  • Most donors do not give for tax benefits—they give because they believe in your mission.
  • Including bequests, ordinary citizens gave 73% of all charitable gifts in 2022.
  • More than 68 percent of Americans lack a valid will!
  • Bequests make up over 90% of all planned gifts.
  • The average U.S. donor is 64 and makes two donations a year.
  • More than half of all people don’t know where to find their parents’ estate planning documents.
  • 98% of nonprofits do not have a simple “ways of giving” brochure for donors.
  • Planned giving leads to an increase of about 75% in annual giving!
  • Planned gifts increase about 5% every year—even during a recession.
  • Only 37% of people 30 and older know what “planned giving” means—educate your donors!

Ruminations

  • Planned gifts offer a way to diversify your revenue sources.
  • Planned giving allows anyone, no matter their income level, to become a philanthropist.
  • Donors can use planned giving to create their own legacy.
  • Planned giving has the highest ROI of all fundraising methods.
  • Most nonprofits lack even a basic planned giving program.
  • Nonprofits with even a basic planned giving program fared better during the pandemic than those with no program at all.
  • Planned gifts can be structured to provide tax benefits to donors and their heirs.
  • Once a donor names a charity in their will, they almost never remove it.
  • Actual donor stories work much better than fictional stories.
  • Fundraisers who just dabble in planned giving earn 50% to 100% more than those who do not.
  • Individuals and couples without children are more likely to make a planned gift.
  • Planned giving is a hallmark of legitimate, prestigious organizations that are serious about long-term goals. Donors want to ensure their money goes to a successful nonprofit.
  • Studies show single women and widowed older women are among the most generous donors and best planned giving prospects. Some fundraisers even say that if she’s a pet owner, she will be even more likely to give.   
  • The only thing a donor takes with them when they leave this Earth is their legacy—and when they leave a gift to your nonprofit, it’s like having that legacy hand-delivered.
  • Today’s donors make blended gifts by combining cash pledges, appreciated stocks, bequests, and more to create the biggest planned giving impact for their favorite causes.
  • Donors give to causes, not to institutions. Use language that emphasizes what your donors can do to advance your cause—not what your organization does for its mission.
  • Planned giving has a long history: one of the earliest planned gifts occurred when King David bequeathed assets to his son, Solomon, to build what became known as the First Temple. In America, some of the earliest known planned gifts are credited to four Mayflower pilgrims who left gifts to their churches through their written wills.
  • Planned giving provides a lifeboat for times when the economic waters get rough and philanthropy goes down.
  • Regardless of the unclear economic future and record inflation, planned giving thrives. [Chronicle of Philanthropy]
Legacy Planner Logo

Making Estate Planning Accessible, Simple, Personal, Secure and FREE!

Bequests are up, cash is down. Empower your donors to plan their will and invest their legacy in the cause they support the most.

Reach out! We look forward to hearing from you.

800-490-7090
succeed@plannedgiving.com

We value your privacy and keep your
information private. We do not spam.