If you’ve been around ten years or more, and have demonstrated you have staying power, it’s time to start thinking about promoting legacy giving. And not just a little. A lot.
Even during a pandemic. Why?
Because once you have a steady stream of legacy gifts maturing, you’ve secured your nonprofit’s future — in good times and bad. Not 100% of course. You’ll still need to continue with annual fundraising. But you’ll be confident in the knowledge that every year or so unanticipated income will flow into your nonprofit’s coffers, like a windfall from heaven. In fact, after a while you’ll even be able to conservatively budget for a certain amount of bequest income (based on your averages) each year.
Legacy gifts can be quite transformative for the financial trajectory of your nonprofit. Think about this for a minute. While not every bequest will be six or seven figures, it’s rare to see a two or three figure bequest. They’re all major gifts!
Except… legacy gifts won’t usually fall from the sky unless you seed the clouds.
So let’s take a look at how to do that.
First, Some Facts about Legacy Gifts
You may be surprised to learn you don’t need to have a bunch of wealthy old donors to be ready to launch a legacy giving program.
Per Giving USA:
- The average donor writes their first will at age 44.
- 53% of donors set up their first legacy gift at writing their first will.
- The average age at which donors made their first planned gift was 52.8 years old.
- 68% of donors make their legacy gift via a charitable bequest.
- Close to 30% of donors make their legacy gift by naming the charity as a beneficiary of their retirement plan.
- Over 18% of donors make their legacy gift by designating the charity as beneficiary of a life insurance plan.
- Another 18% make some sort of charitable trust gift.
Don’t worry about robbing Peter to pay Paul.
If you fear promoting legacy gifts might cannibalize your annual campaign, the Giving USA study shows otherwise. In fact, 7% of donors reported their annual gifts actually increased once they made their legacy commitments. And this makes a lot of sense if you follow any of the research about identity and consistency. Human beings are wired to continue to validate their previous decisions. So the more people identify with you, the more they want to continue to identify with you.
Add to the mix the fact that some of your constituents may never make an annual gift, but will leave a legacy gift (pun intended). In my 30 years working in the trenches, I saw many bequest gifts flow in from volunteers, clients and even people who weren’t on our mailing list. These donors may not have been able to afford an outright gift during their lifetime, but they left us their home or their bank accounts once they no longer needed them. And this was especially true for folks without heirs. In fact, we once received a $4.3 million bequest from one such donor!
In other words, you may not know all your legacy donors. But they know you. Or, at least they will know you if you’re actively out their sowing seeds.
Adopt the K.I.S.S. Philosophy
I see too many nonprofits shy away from “planned giving” because it seems too complicated. It’s absolutely not. It’s just that much of the sector became focused over the years on promoting different deferred giving vehicles rather than giving rationales. And it is the WHY, not the WHAT, that is the basic component of ALL successful, inspirational fundraising, outright or deferred.
Let’s “clairify” our terms:
- A planned gift simply means the donor thinks about it; it’s not made on impulse (It is outright or deferred).
- A deferred gift simply means the donor doesn’t give it to you today (It’s not outright, but comes to you after a specified term of years or after the donor dies).
- A legacy gift simply means the donor makes the gift with an eye towards perpetuating their values after they’re gone (it is outright, and set up to leave a future income stream via an endowment or donor advised fund, or it is deferred).
The preponderance of legacy gifts come via simple gift arrangements
You can talk with donors about planning to leave a deferred legacy gift for the future without worrying about having to learn every detail about more complex giving vehicles like charitable remainder and annuity trusts, charitable lead trusts and gift annuities. It’s good to know a little so you can refer your donor to a legal or financial professional if you think you spot a situation where this would be beneficial for them, but don’t forget the basic legacy giving facts.
Over 80% of legacy donors make gifts that don’t require a whole lot of technical expertise. Stories sell, not data. Outcomes sell, not processes. So don’t fall into the rookie trap of thinking you must get into the weeds with your donors about giving vehicle complexities. Donors don’t give to you because you offer them a life income if they set up a charitable trust with you. They can get that same benefit with any charity. They give to your charity because you enact the values they cherish.
Begin with Bequests via a Will
People understand these. So plant the idea your charity is open to accepting bequests. It may seem counter-intuitive, but many donors won’t think of this idea on their own. Especially people who are busy, and who aren’t really thinking about setting up a will.
Come from a place of being helpful.
Everyone should have a will. So a good place to begin with your marketing is simply to offer helpful content (e.g., on your website, in your e-newsletter or on your blog) about why people need wills. To take care of their loved ones. To make administering their estate less of a burden for family or friends. To assure their hard-earned assets are directed where they most wish them to go – because you can’t take it with you! You can’t write their wills for them; that would be a conflict of interest. But you can provide simple language they can share with their advisors for leaving a bequest to your charity (here’s an example from Alex’s Lemonade Stand). They may not use this information right away, and they may or may not notify you if they do this, but at least you’ve planted the seed. And from little seeds, big plants sometimes grow.
You might be surprised how many donors with heirs will still leave a charitable bequest. I’ve worked with plenty of wealthy philanthropists who don’t want to leave too much to their children, because they want them to become confident, productive, contributing members of society. If someone has a $50 million estate, for example, they may leave $15 million to each of their two kids and $20 million to charity. I’ve also worked with less wealthy donors who still want to leave a legacy to a beloved charity they’ve supported throughout their lifetimes. “My kids won’t miss an extra $10,000 when I die, and this is something I’d like to do – both to communicate my ethics to my heirs and to leave the community improved by my philanthropy.”
Here are some simple bequest marketing strategies:
- On your website: “Where there’s a will there’s a way. Learn how a will can help you accomplish personal family, financial and charitable objectives.”
- On your donation landing page:“What will your legacy be?” “Consider leaving a legacy to memorialize your important values.” Then include suggested language.
- On your outer mailing envelopes or email signature:“Please remember XYZ charity in your will.”
- Ask donors if they’ve made provision for your charity in their estate plans. Do this:
- On your mailed appeal donor remit pieces
- On your online donation landing page
- In a mailed or emailed survey
- As an insert to another publication (e.g., annual report; program brochure; volunteer application)
- Ask donors if they’d like more information about leaving a bequest.
- Send a targeted mailing. If you’ve done some predictive modeling around “planned giving likelihood” you may have a good idea who your best prospects are, so save more expensive targeted legacy campaigns for them (or for folks who’ve given frequently and are clearly loyal).
Create a Legacy Recognition Society
People like to belong to groups of like-minded folks who share their values. Human beings are joiners. The like being part of a ‘club’– even if it only means you recognize them on a donor honor roll, send them a certificate or share a special newsletter with them. So do what you can to show legacy donors are much you honor them.
Out of sight is out of mind.
Ongoing cultivation and stewardship is important for all donors if you want to retain them. But it’s true in spades for legacy donors. Because these gifts are often revocable. If you’re out of sight with these folks you risk being out of mind the next time they visit their attorney. Or perhaps another charity will actively ask them to name them as a retirement or insurance plan beneficiary. This is easy enough for them to change, so why wouldn’t they if they’ll get more high fives and pats on the back from someone else?
Here are some simple legacy recognition society strategies:
- Publicly recognize members (with permission) wherever you have donor honor rolls (e.g., annual report; newsletter; programs; website).
- Host an annual recognition event (virtual or in-person) to reinforce donor commitment. This is an opportunity to have donors share their personal stories as to why they made this gift, which works to inspire others to sustain or even increase their own giving.
- Offer periodic informational events (e.g., town halls, brown bags; fireside chats) to keep donors apprised of the latest goings-on and focused on the values you and they are enacting together.
- Publish a legacy society newsletter or blog.
Publish Legacy Donor Stories
Even leaders are followers. Two of the principles of persuasion are “social proof” and “authority.” If someone else who is liked, trusted and/or perceived as an authority says something is a good idea, people are inclined to follow them. It’s a decision-making shortcut. So profiling donors who’ve made legacy commitments is a surefire way to inspire others to consider doing the same. Plus everyone loves a good story; we’re wired that way
The people you profile don’t have to be VIPs.
Their stories just have to resonate with someone.
- If a mom in my Mom’s Group tells the story of leaving a legacy in her will so her kids will know her values in the event of her death, I may think that sounds like a great idea for me too.
- If a couple I know from my congregation, who are in my same age and income bracket, set up a named endowment fund for a program near and dear to their hearts, I may call up the development office to ask how I can do this too.
Spread the Word among Allied Professionals
It’s always helpful to have connections with those who influence your donors. That’s why, when you ask for a major gift, it’s a good idea to ask the donor if they’d like to include their spouse, adult child or other advisor in your meeting. The same holds true for legacy gifts.
Financial and legal advisors are legacy gift influencers.
Good professional advisors will ask their clients if they’d like to include charitable giving in their financial and/or estate planning. Sometimes donors will ask these advisors for recommendations. When this happens, it’s good for you to be on the advisor’s radar. That $4.3 million bequest my agency received, the one I told you about earlier in this article? It was recommended to the donor by an attorney who served on our Planned Giving Advisory Committee. Ours wasn’t his only recommendation; we were one of a dozen recipients. But ours was the largest.
Here are some simple strategies to spread the word:
- Form a Legacy Giving Advisory Committee comprised of attorneys, financial planners, accountants, tax preparers and philanthropic advisors. Engage with this group periodically to make them feel good about their affiliation with you. Provide helpful information. Offer networking opportunities. Share inspiring stories. Ask if you can call on them for guidance as needed. Demonstrate your gratitude.
- Include professional advisors on your Development, Major Gifts or Endowment Committees. This is a recommended strategy if you don’t yet have a professional advisory committee. In the best of all possible worlds, you’d have both. But you can always transition the professional members off your “fundraising” committee when the time is right.
- Send a mailing to local professional advisors (e.g., get a list from your bar association or local trade groups; or ask these groups if they’d be willing to send information from you directly to their lists). Again, provide helpful and inspirational information. See if anyone on the lists would like to become more involved with you (e.g., as a committee member, direct service volunteer, advocate, or donor).
Spread the Word to Your Own Program Professionals
Again, it’s always helpful to have connections with those who influence your donors. Program staff and volunteer coordinators often work with your supporters more closely than development staff. It’s a good idea to show them how they can help further your charity’s mission, without making them feel like “ambulance chasers.”
Alert your staff to the benefits of legacy giving
Sometimes clients will mention they’d like to do something meaningful for the charity that has helped them. Volunteers may say the same thing in a different way (e.g. “I get so much more than I give here; wish there was something more I could offer.”)
Here are some simple strategies to spread the word:
- Meet with your staff to alert them to legacy giving possibilities and prepare them to offer helpful information when the subject arises.
- Emphasize simple strategies that can be accomplished without even visiting an attorney (e.g., beneficiary designation of a retirement or life insurance plan).
- Reassure staff you’re available to meet with any of their clients who would welcome such a meeting. It may be a good idea to include the referring staff member – who is liked and trusted – in this meeting. Don’t make this a requirement however, as some folks will not be comfortable with this.
- Publicly recognize staff who facilitate legacy gifts. You can do this in an internal newsletter on an all-staff meeting.
Don’t Make Looking to the Sky Your Plan
Doing a little rain dance is part of your job. Nearly 70% of people make gifts to charity during their lifetimes; only 10% leave a bequest. Why? No one asks them!
Begin to practice making it part of your standard operating procedure to ask donors: What legacy would you like to leave the world? You don’t have to focus these conversations, at least initially, on an end goal of asking for money. In the beginning, you’re just planting the seeds.
Give things time to grow, mature and flourish. Just remember this won’t happen in a vacuum. Your active participation is what makes a steady stream of legacy giving a reality rather than just a wish. Build a simple plan to make sure you let donors know what a bequest can accomplish, and how much you’d be honored to partner with them to make a lasting difference in your community and the world.
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Image courtesy of Nick Tsinonis on Unsplash.
This is an incredibly helpful post for those of us in small shops – – there are things here I can do immediately and in the near-term for my planned giving program. I just listened to part of a webinar by Russell James. Two suggestions jumped out at me – a meaningful survey and a focus group. Tell your donors you need their help. Why aren’t we doing more planned gifts?
Surveys and focus groups are excellent ideas to help you build your case for legacy gift support. I prefer to focus in on the “legacy” or “endowment” aspects, rather than use the term “planned” or “deferred,” which make folks think about process (gift vehicles) over outcomes that perpetuate donor values. Thanks for weighing in!