Did you get your share of the $41 billion dollars in the United States that donors willed to their favorite charities in 2020?  If not, you’re likely one of those managers and leaders who think that investing in planned giving is a luxury – something you do IF there is enough budget left over from direct marketing, mid and major gifts, events, etc.

By the way, the $41 billion I am referring to here is just bequest revenue. It does not include IRAs, charitable reminder trusts or any of the other planned giving vehicles for giving.

Across all planned giving vehicles, there’s a lot of money being donated. And here’s the thing. Not only are the older folks giving this way, but middle-aged adults are stepping up and writing up their wills as well. Caring.com’s 2021 Wills and Estate Planning Study found that “63% of younger adults are more likely to write up a will this year than they were pre-pandemic. Shockingly, 18–34-year-olds are now 16% more likely to have a will than those in the 35-54 age group. The younger generation was also the most likely to cite COVID-19 as the reason they started taking estate planning seriously.”

We already knew that planned giving was a very healthy source of revenue for non-profits.  That’s what makes this news on younger people writing up wills such an important and strategic piece of information.

But ignore that data point for a minute and focus, instead, on why you’re not investing in planned giving. This should be a strategic priority for you this year. Here’s why:

1. The largest transfer of wealth in human history is happening right now. An older generation is passing and, as they pass, they are leaving enormous sums of money to their favorite causes. Give me a good reason you would not want to be a recipient of their care and generosity.
2. A healthy planned giving program will carry you through even the most difficult of times. Jeff and I, and our team, have countless stories from our clients where planned giving revenue kept the organization going financially during this pandemic. Why wouldn’t you have a revenue strategy like this up and running?
3. A healthy investment now will generate revenue faster than you think. One key reason leaders and managers do not invest in planned giving is because they don’t believe that it will generate current operating revenue. While it’s true that there is a longer lag between investment and return for planned giving, the wait is definitely worth it. There are hundreds of donors right now in your donor file who, if they haven’t done so already, are just steps away from writing you into their will IF you ask them to. Our Director of Planned Giving Services, Robert Shafis, routinely analyzes donor files of clients and prospective clients and tells them that the data he is seeing shows millions upon millions of dollars of planned giving potential.

I am constantly amazed at the level of detail and precision of his analysis and doubly mystified why, given the information he shares, the manager can’t make a decision to invest in this area.

Let me give you an example.  One of his reports recently crossed my desk where he said that:

• There are 8,672 donors who have two, three or four of the various indicators of planned gift propensity. We estimate that there are 77 undiscovered bequests in this group with a value of between $2.3 million and $4.7 million.
• There are 221 donors with a 10+ year giving history, who gave $10,000 or more cumulatively over their history, made a recent gift within the past 3 years AND gave 100 or more gifts. These names are the ones we feel are ready for cultivation and solicitation of new planned gifts in a relatively short period of time (4-9 months). This number justifies at least 2 full time Planned Giving Officers. This pool of donors, over the next five years, could generate from $8.8-15.5 million.
• There are 137 additional donors who have already identified your organization in their plans. They’re not included in any of the names above. We estimate that the value of their commitments is in the range of $5.5-9.6 million. This information justifies the addition of a Planned Giving Associate who will steward these donors.

OK, I know these numbers might be bigger than you are used to, but I have many reports just like this from smaller organizations, but wouldn’t you think that a manager reading these reports would say to themselves, “I need to invest in building a planned giving program”? I think so, even if the numbers were half right.

But do they? Nope. And Jeff and I just sit back and wonder why. It really does not make sense to us.

Alright, so now you are saying “OK. OK. I get it – but where do I start?”  Here is what we suggest:

1. Do the analysis or better yet, let us do it for you. It will cost you nothing and you will have a fact basis for making decisions in this area.
2. Using the analysis, create a startup plan that spells out how you will get started.  Your plan should address the following areas:

• Number of donors to target for planned giving messaging and offers.  Note that at this point your analysis will show that you have X amount of donors who have not revealed that they have put your organization into their will and Y amount of donors who have the propensity factors in place for considering adding your organization into their will.  This is work you need to do to make sure your offers are on track.
• Strategies and systems/processing for creating those messages and offers and managing the process.  This involves the creative process as well as the data management you will need.
• The labor you will need to employ to make this happen.  In my last post of this series, coming up in a few days, I will address what qualities and skills you need to look for as relates planned giving officers.
• The budget to make all of this happen.  This is the revenue side as well as the expense side noting that you will be in a negative position as relates cash flow since there is a lag between investment and return.  This is normal.
• The schedule or timeline that all of this will happen in.
• The management structure you will have in place to make all of this happen.

1. Go to a donor interested in capacity building and ask him or her to invest in starting your program. There are many donors who love this kind of investment – we have a lot of experience in presenting these kinds of donor offers.
2. Execute your plan.

This all may sound way more complicated than it is. But, believe me, it isn’t. And if you need help, we can guide you through it. Right now, the important step to take is to get started. Take an action to get your planned giving program up and running. This is critical. And your financial survival as an organization may depend on it.

Richard