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Query to development officers...
• Are you living life from one auction
to the next?
• Has your development program settled
into the comfort of incremental year-to-year successes?
• Are you content with cautionary budgets
and narrow victories hailed by board and CEO alike?
• Can you not find time to do something
you know you should be doing, like a planned giving
program?
If your answer is yes to any of the above, beware!
Somnolence can be fatal.
Cash vs. Assets
Perhaps it isn’t your fault. Maybe your hoard
and executive director think planned giving is a waste
of your time. Besides, we're going to have flat tax
soon and planned giving will be obsolete!
In more than three decades of development work, I have
observed that nonprofit without planned giving programs
have bought into one or more myths.
They have determined unconsciously that they would
rather invest 92% of their development budgets in the
pursuit of the 8% of assets that the average individual
holds in cash, as opposed to focusing resources on persuading
individual donors to invest in the work of the organization.
These assets are held in stocks, bonds, real estate,
life insurance, business ownership, retirement funds
and other assorted holdings that can’t be given
away by check or money order.
In this area of complex tax code, more than 85% of
planned gifts are made simple bequest. As for the flat
tax, should that come about, people would still be able
to bequeath something to your organization.
Planned Giving Myths
All gifts are planned. It’s just that the planning
is proportionately longer and more involved as the size
of the gift increases.
But, you say, we need to keep the lights on and my
medical coverage funded. I didn’t say you should
stop everything you’re dong. I’m suggesting
a slight reordering of priorities.
Before you conclude that planned giving programs aren’t
right for you agency, consider these myths:
Myth #1: We'll have to wait decades
until somebody dies before we see a return on our investment
from planned giving.
If you do planned giving the way it should be done
- as a long-term, relationship-building service to the
donor - you will see immediate returns
in the annual giving of your planned giving prospects.
Planned gifts, years off but sooner than you think,
are a bonus.
Myth #2 and #3: To do planned giving, we will
need to hire a lawyer-like character at great expense
to talk about all the tax strategies involved. (This
goes along with, "It's the tax advantages that
generate planned gifts” myth.)
Tax advantage as an incentive to make gifts rank very
low on every scale ever tested. As for tax knowledge,
when it is called for, you can engage
an expert. Your expert can talk to the donor's
expert. Some of the "lawyer-like" characters
who
haunt development departments are excellent professional
fund raisers, but you may not need overkill. Successful
planned giving - like every other development task -
is almost always tied to bringing the donor to the point
of saying, "Yes, I want to help."
Myth # 4: Unless your organization has a "rich"
constituency, planned giving is a waste of time.
What do you really know about the resources of your
constituencies? Even the most sophisticated programs
know next to bumpkus!
Many of your rich constituents have financial advisors
and existing estate plans... both of which can be significant
psychological and tangible barriers to the success of
planned giving pro- grams. It's your average donor who
typically can see the planned giving program as a direct
and useful service provided by a nonprofit whose pro-
grams are meaningful and important. In essence, it's
the average donor who learns something of substance
in the process of helping you. Planned giving expert
Robert Sharpe, Jr. has noted that the most likely planned
gift donor is a modest but consistent donor.
Volunteers are more likely to want to participate in
special events because donors get something in return.
Selling tickets is always easier than asking for outright
gifts. Offering donors valuable information is easier
than asking for outright gifts too! And, unlike most
major gift solicitations, the solicitor is not asking
for a specific amount. The solicitor is asking the donor
to consider the inclusion of the nonprofit in their
estate plan or, if already included by bequest, to consider
using the asset(s) that would fund the bequest to fund
it in a more tax-advantageous way! Your lawyer can help
with this last option.
There are times when the solicitor might ask for a
specific gift... such as in a capital campaign. A planned
gift might be the best (or only) way that the donor
can make the commitment.
Myth #5: People who are going to include us
in their will don't need to be asked to do so.
Unfortunately, most people don't have a will. I've
read numbers as high as 70% for the general public and
50% for attorneys. Your friends will not leave your
organization a penny if the government has anything
to do with it. The state allocates the deceased s assets
when no will is present.
Perhaps saddest of all are individuals who leave something
for nonprofits without the nonprofit ever having the
chance to thank them. Bottom- line oriented boards,
on occasion, learn that someone has passed away and
left large sums to other charities. The abandoned charity
never knew that they somehow blew the bequest in the
first place. Responsible and rewarding partnership between
donor and nonprofit - including stewardship of gifts
yet to come — are impossible without the nonprofit's
prior knowledge.
Planned giving programs also have an excellent discovery
aspect to them. They have special recognition systems
to acknowledge commitments while the donor is still
around to enjoy the gratitude of the nonprofit. Planned
giving programs offer donors the satisfaction of knowing
that their public commitments encourage other donors
to give.
In summary, if your organization is not doing planned
giving, I hope it's for the right reasons and not because
you've bought into myths. And, what are some of the
right reasons?
• Your constituency is far too young
(e.g., teenagers).
• You don't plan on being around very long.
• Your organization has no constituency.
Wake up! The red numbers are coming. The red numbers
are coming!
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