The Three Legs of a Successful Planned Giving Program

Jeff Schreifels

Planned giving is not as complicated as it seems. I can’t tell you how many conversations I’ve had with leaders and fundraisers who immediately balk at the mention of planned giving. But when you have a planned giving program where each function is performing as intended, the results can be transformative for your organization. Now, you may be wondering what I mean by each function. I mean, it’s just asking for a gift and working with lawyers and financial advisors, right? In today’s episode, we’re talking about the three distinct functions of a planned giving program, why you need each of these areas to create a thriving program, and how to meaningfully move a donor through each area.

Recorded

Welcome to the Nothing But Major Gifts Podcast from Veritus Group featuring Richard Perry and Jeff Schreifels. Twice a month, we bring you the latest and best thinking about major gift fundraising so you can develop authentic relationships with your major donors. Here are your hosts, Richard and Jeff.

Jeff Schreifels

Welcome to the podcast today. I’m Jeff Schreifels. I’m glad you’re with us today. Over the last few years, we’ve been focusing on how to build a relational planned giving program that will help you identify, solicit, retain, and properly steward your planned given donors. The reality is that organizations like yours are losing huge amounts of revenue by not prioritizing planned giving efforts or by creating an imbalance in planned giving functions. So to talk about these functions, what we call the three legs of planned giving, I’ve invited Robert Shafis, our Director of Planned Giving Services, and Kara and Ansotegui, our Director of Client Services, to join me for this episode. Welcome, Bob and Kara. Good to see you here. Now, before we dive into today’s topic, I’d love for both of you to just introduce yourselves to our audience.

Robert Shafis

Hi, I’m Bob Shafis, Director of Planned Giving Services at the Veritus Group. I’ve been working in major and planned gifts for, God help me, 40 years, and managed several large regional and national planned giving programs.

Jeff Schreifels

Awesome. Kara?

Kara Ansotegui

Yeah, I’m Kara Ansotegui, Director of Client Services, and I’ve been in the fundraising industry for a little over 20 years, and came to know and love Veritus as a client of theirs many years ago. So it’s great to be here today.

Jeff Schreifels

Awesome. I’m glad you’re here. This is going to be a great conversation. I know when we prepared for this, how much fun we had talking about this. So I’m looking forward to this. Okay, Bob, let’s start by talking about what the three legs of planned giving are and what each function is.

Robert Shafis

You know, it’s really come to me, kind of, suddenly, in the past few years that there are really three legs for a good planned giving program: good effective planned giving lead generation marketing, good effective asking to make a commitment and walking hand in hand with the donor as they make that commitment final, and then the stewardship piece. So lead generation and marketing. One of the things about planned giving is that all of your planned giving donors are already in your database. So you need to identify new prospects or existing planned gift donors, with initial qualification of the lead, the names, the cultivation of lead names, and providing valuable and relevant information, to inspire them to raise their hands to self identify. And finding out who has already made the commitment to the organization. And those who want to make a commitment to the organization. You know, the planned giving officer’s role is really just really qualifying those lead names and getting to know them, cultivating them, asking them to make a commitment, and then closing that gift. And then the piece that’s really, really important that I probably would not have said this 15 years ago, is the whole stewardship side. We know enough about people who make planned giving commitments to know how important it is to not only celebrate with them what they’ve done, but to make sure that they feel connected to the organization and that they feel appreciated for what they’ve done.

Jeff Schreifels

Yeah. Okay, so how do these three functions collaborate and partner in the ideal world?

Robert Shafis

Well, ideally, each function is going to be managed by an individual person. So rather than having, as you often see in planned giving programs, one planned giving officer is handling the marketing, they’re handling the stewardship, the handling of lists maintenance, they’re handling the asking… each of those functions, marketing, planning giving officer’s solicitation, and stewardship should ideally be done through individual staff members. And you should see the people move through with the pipeline, and begin to collaborate effectively with your major gift staff and your mid-level staff. Because once again, a lot of your best planned giving prospects will be resident in the names that they’re working with.

Jeff Schreifels

Yeah. So now we know from our work with organizations that most, especially small to mid-size organizations, typically don’t have three people working in each of these functions, and end up combining them. This is also common in new planned giving programs, or ones that are underfunded. So Kara, how do we see this in practice?

Kara Ansotegui

Yeah, that’s a good question. I think you and Bob have alluded to the main point, which is they combine all three, right? And it’s not ideal, but it’s really how a lot of organizations are currently structured, why they’re building and investing in that plan giving program. It has its challenges. It’s hard for one person to manage all of that. But I think that there are some ways that we can combat that. And we’ve seen that combated, namely through collaborating with the major gift officer, or as Bob even mentioned, the mid-level officer, on that ask function of the role. Right?

Kara Ansotegui

Organization should even allow a mid-level officer or consider allowing the mid-level officer to steward some of those planned gift donors. When we look at how we steward our planned giving donors, it’s very closely structured to how we manage mid-level donors. So that’s another way that they can really look at that. And I would say another scenario that occurs in the organization might be outsourcing that lead gen side of things, the lead generation. So if it’s done properly, what it really does is allow the planned giving officer, or that one person, more time to focus on what we would consider warmly qualified donors that are coming from that program.

Jeff Schreifels

So Bob, what do most organizations confuse or misunderstand about these function areas?

Robert Shafis

Well, I alluded to a few moments ago, the kind of confusion of roles that tend to all be rolled up into one planned giving officer’s duties. The organization really needs to understand what those individual functions are, and to allocate how much time any individual staff person needs to spend on those functions. Another thing that they don’t really fully understand is, most of the people who have done something in their plans, whether that’s a will bequest, or beneficiary designation, or even a charitable remainder trust, most of those people won’t tell the organization that they’ve done something. They don’t want to be targeted, they don’t want to be identified as a wealthy person in the future.

Robert Shafis

We we also know that most testamentary gifts don’t actually come into a person’s estate plan until two to five years before they pass away. So in a way, you kind of have this two-pronged approach that you need to think of in terms of planned giving: identify the people who will tell you now, and make sure you keep marketing to the people who are long-term donors to the organization. Kara mentioned mid-level. A lot of your best planned giving prospects maybe aren’t giving huge amounts of money, but if they’ve been giving for 20, 30, 40 years, those are really good prospects. And finally, this whole stewardship piece, which is that 40% to 50% of people with executed estate plans, fail to go through with those when they pass away. So keeping people close to the organization; constantly making sure that they know how much you appreciate them, will help make sure that they go through with what they do in their plans as they go forward.

Jeff Schreifels

I’m going to ask both of you this question. So Kara, you can go first. But what can go wrong? If an organization is not properly supporting all three of those legs and planned giving that we’re talking about here?

Kara Ansotegui

Well, I know Bob’s probably gonna have a lot more to say about this than I am. But I can tell you, you know, based on what I shared earlier, it doesn’t really allow the planned giving officer the time and attention they truly need to focus on soliciting those planned gifts. You know, I look at it kind of like we look at major gifts and events. Major gift officers shouldn’t be planning events if you want them out there soliciting. And similarly, to have a truly functioning planned giving department, you need to invest in all three legs.

Robert Shafis

So it’s really important to understand that you need to make sure that you focus on the planned giving three-leg approach. Because as I’ve done the assessments that we’ve been doing for clients, one of the things that I’ve noticed is that virtually every data set has a huge number of unknown, undiscovered bequests. And so one of the things that you really want to focus on is to get those people to self-identify. That’s your marketing, it’s through personal contact, because those are the people who (A) are going to tell you that they’ve done something, and (B) are now people you are able to steward effectively.

Robert Shafis

Another piece of it is, if you take a look at those datasets, there are huge numbers of people who look like they’re good planned giving prospects, and failing to market to them, failing to ask them to make a commitment, is always going to provide your organization a missed opportunity. And you don’t want to be that person who misses that opportunity. Because these opportunities are huge. The average size of a planned gift is $40,000 to $70,000. That’s a very large amount of money. And poor stewardship will make your identified donors more likely to think well, I guess this organization I think of so highly that I actually put them in my estate plans, has kind of forgotten that I exist. We don’t want to be in those positions. We want to make sure that we’re building relationships with people you don’t already know. A lot of organizations spend a lot of time just focusing on their existing planned gift donors: people that they know already. That’s great. And that is part of that stewardship process. But really, you need to get out, build relationships with people that you don’t know well, and get them to make commitments. Leadership needs to look really hard at any individual fundraising program to make sure that they’re capitalizing on those planned giving leads. And since we know, and this is on the stewardship side, again, only 55% of people keep a charity in their will for more than 10 years.

Jeff Schreifels

Oh, interesting.

Robert Shafis

So you need to keep that stewardship side, that banking side, going. So great stewardship is important. But so is lead generation. And you need to build those new relationships and ask for new commitments, because that’s where you’re going to see the biggest bang for your buck.

Jeff Schreifels

So, I’ll ask both of you again, why is collaboration with major gifts critical to the success of all three legs of the planned giving? Where have we seen this? It’s kind of like a yes-and, right?

Kara Ansotegui

I’ll start if that’s okay. You know why it’s important. I think we need to get our major gifts teams comfortable talking about planned giving, right? There’s different types of planned gifts. And talking about legacy gifts can be challenging for major gift officers at first. It doesn’t come naturally. They don’t know a CGA versus a CGT, and what all of that means… all the implications of that, right? So getting them trained to understand the value of planned giving, and how to talk about that work is really important.

Kara Ansotegui

I also think there’s a really great opportunity between the planned giving officer or the planned giving team and the major gift officer to collaborate on those leads. So when a donor raises their hand identifying interest in making a planned gift, it’s really critical that if they’re on a major gift portfolio, your major gift officers are working with the planned gift officer to have that conversation sooner rather than later. And I think it’s important that we understand the highest potential for a donor and how we can serve them. Right? By speaking to a variety of giving options; we talk about passions and interests. And if we know it’s important to leave a legacy gift to a donor, we need to be able to fulfill that, right, through having those conversations with them. And then Bob just alluded to this. The last is really stewarding those donors who have confirmed your organization is in their estate plans. If they’re on a major gift portfolio, they should be sorted both for their planned gift and then continuing to have those conversations for their outright annual gifts.

Kara Ansotegui

I have one quick story. I have one specific client who doesn’t have a planned giving officer. They have someone who’s doing some lead generation for them. And they have identified, through Bob’s work, some great planned giving officers. And so what we’re doing is actually working with each of the major gift officers in our coaching. And we’re determining which of those donors are ready to have planned giving conversations with and which of those donors we can actually make a dual ask at year-end. So which of those donors want to have those conversations and which donors can make an ask between both an estate gift and an outright gift, and an annual basis… on that annual basis at year-end this year?

Jeff Schreifels

I love that. So, Bob, what is the value of having a fully functioning planned giving program? And how does it support all the other areas?

Robert Shafis

Well, first of all, you know, contrary to what a lot of people believe there is an immediate return. There is at least one study that shows that new planned gift donors increase their giving kind of wildly, something like 75%, in terms of their annual giving in the time period after they make a planned gift. Also, you know, asking for non-cash gifts increases giving. Because what you’re doing is you’re asking people not to think about what’s in their wallet, but what they own. And when they start thinking about what they own, they begin to think in terms of more like a philanthropist. What can I do to support the charity with what I have? Like I said, it drives the increase in major gifts, and shifts that mindset from the cash you have to what it is that you want. And like I said before, this is not the kind of fundraising where you can rent a list from some magazine or something like that, to find new donors. Your existing donors are already in your database. Your planned giving prospects, your existing planned gift donors, are in that database, whether you know it or not. And I’m going to add one more thing real quick, which is, in the little over two years, the estate tax is supposed to go back down to $5 million. It’s currently at like, the amount that you can pass tax free is supposed to go down to about $5 million. It’s currently at about $12 million. And a married couple can do between $25 and $26 million dollars before they have to worry about estate taxes. This is a good time to start a planned giving program and/or to ramp up your planned giving effort. Because in a couple years, you’re going to be talking to everybody about how planned gifts are going to help them with their estate situation.

Jeff Schreifels

Okay, so for someone at an organization that’s just getting started in planned giving, or that has an existing program, but it’s not properly supported or balanced. What advice would you give them? Kara? Why don’t you start?

Kara Ansotegui

Well, I’m a planner. So my advice is more about setting yourself up for success, right? Really understanding those legs, understanding what you can do within each of those areas, and how you can maximize resources and staffing that you have in those areas to really get that program up and running. And like I said, is it that you’re using your mid-level for your stewardship? Is it that you’re using major gifts and collaborating with major gifts on your asks? Figure all of those three legs out, so you’re setting yourself up for success in that program.

Robert Shafis

Yeah. So, you know, getting our free assessment to find out what your real capacity is, is one of the best ways to start making sure that you have everything in place. Do you have a gift acceptance policy? Do you have a marketing plan? A stewardship plan? Do you know what type of planned gifts you even want to work with? That may vary from state to state and with the bandwidth that any individual organization might have. And you probably want to think in terms of appropriate staffing and probably a legacy society. And you should have response plans ready. Probably when you send out the marketing piece so that it’s all ready. So when you start getting those responses, you’ll be able to respond appropriately and quickly. I would always say that one of the most important things is to incorporate planned giving in most of what you do. So like Kara was talking about how major gift officers sometimes are maybe a little reticent to talk about planned giving. But make sure that they have some level of comfort. So that legacy becomes part of every philanthropic discussion.

Kara Ansotegui

I would say as part of that Bob, making sure that it’s part of your annual fund, right? Make sure it’s on your reply devices for annual funds, so you get more of those hand raisers. Really thinking how you can do that?

Robert Shafis

I see that all the time. And I also see it on email signature lines.

Jeff Schreifels

All right. Well, thank you both for joining us today on this episode, and we hope that this has given you clarity on various roles that play into a strong planned giving strategy. If you’d like to learn more about how to approach planned giving, you can download our free white paper on How to Start a Planned Giving Program. And be on the lookout for a brand new Master Class in planned giving that will walk you through creating a thriving planned giving program that we’ll be launching this fall. Thank you and we’ll see you next time.

Recorded

Thank you for joining us for the Nothing But Major Gifts Podcast from Veritus Group. Richard and Jeff also write an ongoing blog that you can subscribe to for free at veritusgroup.net. Please join us again next time.