Whether you are launching a new planned giving program or reviving a flagging one, understanding some key elements of a solid giving program will ensure higher success. Since this topic is so extensive, we will address the first four aspects today: Why a planned giving program is important; How it fits in with your overall fundraising program; Creating a culture of donor-focused gift planning; and Building your nonprofit’s gift planning team. We’ll address the four remaining topics in our next article: Identifying potential donors; Having the planned giving conversation; Marketing your giving program; and Measuring success.

Why is planned giving so important for your nonprofit?

The answer to this question may surprise you. Planned giving allows your donors to meet both their personal planning objectives and their philanthropic goals so they can create a more meaningful and lasting legacy. An effective planned giving program will enable you to help your donors understand what impact they want to have today, what outcomes they hope to achieve for tomorrow, and what legacy they want to create during their lifetime and beyond.

A planned gift allows your donors to give 200 to 300 times the size of their annual gift because it is deferred and based on assets. Tom Ligare, President of Charitable Gifts Agency, explains that “Even though your organization is eager to generate immediate funds, proceeds from a bequest can help ensure your sustainability for the long-term.” In addition, a study by the Center on Philanthropy at Indiana University shows that the average annual gift will double once a planned gift is put in place because the donor feels more connected to your organization.

Eighty percent of all planned gifts come in the form of nonprofits being named as a beneficiary of a will, a living trust, donor-advised fund, life insurance policy, or retirement plan. Sadly, two out of every three people die without a valid will. The remaining assets can only go to three places: the IRS, heirs, or charities. Donors significantly leverage their community impact and reduce the amount they give to the government while still benefiting their heirs by including nonprofits among their beneficiaries.

How does a planned giving program fits in with your overall fundraising program?

Most organizational fundraising focuses on annual giving, grant submission, special events, and major gifts. However, planned giving can play a key role by allowing donors to endow their favorite programs for the future thereby enhancing their legacy. Developing relationships with faithful donors is the key to any successful fundraising effort; however, don’t be short-sighted by focusing only on immediate gifts. A good planned giving program can sustain and support your organization’s mission for the long-term.

Inexperienced board members and fundraisers often look to corporations and foundations as the best prospects for gifts. However, according to Giving USA, corporations and foundations comprise a very small part of the dollars raised by nonprofits. The vast majority of gifts come from individuals, which is where your nonprofit should focus its attention.

Creating a culture of donor-focused gift planning

It all has to start with an organization-wide culture of philanthropy. This means cultivating shared attitudes, values, goals, and practices that people at every level, especially donors, live and feel.  Board and staff members must be so enthusiastically committed to the mission, vision, and values of the organization that they want to do whatever it takes to ensure long-term viability.

The heart of donor-focused gift planning is a donor’s passion. Begin with programs that the donor values. Then find out how the donor would like to see the program and the organization develop over time. Ask about the donor’s financial and legacy goals and then build around that. This will generate a giving response and investment to benefit both the donor and the nonprofit. A donor-focused fundraising program cultivates giving and practices stewardship, ultimately enhancing the mission and energizing everyone connected with the organization.

Building your nonprofit’s gift planning team

Fundraising is everyone’s job, especially in an organization that has developed a culture of philanthropy. Whether a nonprofit is large or small, planned giving success means everyone working together for the common good. Large organizations sometimes battle an institution-focused culture whereas small nonprofits sometimes feel under staffed for fundraising. Do not let the size of your organization deter you from embracing a donor-focused gift planning effort.

A well-rounded gift planning team includes: CEO/ED, Board Chair, Board Development Chair, Staff Development Director, and Planned Giving Officer. Planned giving adds an additional layer of complexity to the team. This can be achieved through a collaboration with a trust attorney, a bank trust officer, and/or a financial advisor.

Since many nonprofits are not large enough or developed enough to have someone in each position, it can be better to look at the activities to be performed rather than positions. These activities may include:

• Identifying prospective donors
• Educating and cultivating donors
• Advocating for the nonprofit within the community
• Asking for support from donors
• Recognizing all donor contributions
• Deepening donor commitment by engaging donors in the mission
• Creating relationships with trusted financial advisors

Whether your nonprofit is just starting a new planned giving program or trying to revive a stagnant one, you will be successful if you follow a clearly defined strategic plan to achieve your fundraising goals. We will discuss the next four aspects of a good planned giving program in our next article.