What We Don’t Do
Companies like to boast about what they do. Apparently, many firms also like to do far more than they should. More and more in the planned giving community I see “marketing” firms promising their clients the world.
Get Rid of Your CGA Program!
Says the panicked board member… until you show him a better way to lower risk. Has this ever happened to you? A board member or finance officer who is unfamiliar with gift annuities sees a big liability on the books and panics. “Why are we doing this?” they ask. Their concern is understandable. A charity normally pays a donor around 40-60 percent of the original gift in interest. For someone who isn’t familiar with gift annuities, that seems like a very bad way to raise money. Unfortunately, the knee jerk reaction is all to often to pull the plug. Stop issuing CGAs and let the existing pool run its course. But there couldn’t be a riskier solution. Without newer contracts coming in at lower payout rates, it is an actuarial certainly that the program will eventually run out of funds. Then the generous gifts your donors made will be all for naught. Reinsuring does nothing to offload risk. Non-profit organizations often receive the advice to purchase a commercial annuity or reinsure their CGA contracts through a life insurance company. But in reality, this does nothing to shift the risk to a third party. The liability still remains with the charity. Your bank should not be one of your CGA beneficiaries. If your CGA program is not growing and the assets are shrinking, essentially your bank has become one of your CGA income beneficiaries. But don’t worry. There’s a better alternative than reinsuring or opting out. If your organization is considering opting out of the CGA business, or would like to remove all existing contracts from your books, a simple bridge agreement between your donor, your organization, and CGA America could be a win-win solution You can transfer of all existing contracts and liabilities to CGA America, and100% of the contract value will be sent back to your organization at the maturation of each contract. Fees for using CGA America are in most cases lower than what organizations currently pay to a bank and are right in line with what the American Council on Charitable Gift Annuities recommends (1%). For additional information, please visit the CGA America website at www.cgaamerica.org. To learn the basics of gift annuities and all other gift planning vehicles, purchase The Ultimate Quick Reference Planned Giving Pocket Guide. Dr. Thomas E. Dieters is the Founding Partner of Thomas Mitchell & Associates. Prior to founding TMA, Dr. Dieters led a charitable services program at a national financial institution and spent two decades in planned giving. tdieters@thomasmitchellassociates.com
Email vs. U.S. Mail
Trying to save money by using eMarketing? Think again. According to the 2015 Response Rate Report by Direct Marketing Association (who also does eMarketing), direct mail outperforms all digital channels in a big way. The response rate for direct mail was 600% higher than that all of the digital channels combined. This number is too big to ignore.
3 Time Management Lessons from Mr. Brown
People are the best time investment you can make. The most common goal of executives who hire me for time management coaching is to free up time to invest in their teams and to spend with their families. Intuitively, they know that time spent with people forms crucial bonds, enables personal development and reduces fire drills. Yet, daily urgencies frequently preempt time reserved for weekly 1:1’s, for “walking the halls” to stay visible and getting home in time for dinner.
Married Couples and Gift Annuities
Q: When a husband and wife fund a gift annuity, is it always joint and survivor?
Don’t Assume Your Donor Knows Details of His Gift
Donors often do not know the exact structure or details of their own planning, charitable or otherwise. They depend on their advisors. This is one reason it is so important to partner with advisors when working with donors.
Donors as Prospects for Large Major Gifts
Question In your Strange Myths section in Giving Tomorrow Magazine, the statement is made that “Most planned giving donors are not prospects for large major gifts.” Did the word “not” creep in there by mistake? Answer This is a really good question and common misperception. Over the last several years there have been a number of studies of the most likely planned giving prospects. We have learned that those individuals who are loyal to your organization and mission are the most likely to be open to the planned giving message. Typically we measure loyalty by regular, consistent annual giving. One of the studies showed that donors who give 15 or more times are the best planned giving prospects. It does not matter the amount they give, just that they give. So wealth is not a factor in determining your planned giving prospects. In fact, when you do a wealth screening and overlay it on a loyalty screening, for most charities more than 90% of their loyal donors, those most open the planned giving message, are not on the wealth screening because they are not major or principal gift prospects. So when you put together your prospect list for planned giving, look at loyalty, and not wealth. This is not to say that wealth doesn’t matter at all. Once you have your loyal donors identified, it is perfectly OK to segment by wealth for the purposes of your gift planning marketing. For example, I would never market “maximizing your children’s and grandchildren’s inheritance while supporting our mission” to donors who have very limited capacity. They are not thinking about the inheritance they are leaving behind. But I might market a message of “increase your income in retirement” or “make a gift that doesn’t cost you anything today” to this audience. Another segment to consider are those with no children. Among your loyals, they are most likely to actually complete a planned gift. But if they have no loyalty, then they are not a target audience. The key is to identify the loyals first, then segment based on your message or who you want to reach. I detail how to select your audience in my book, The Philanthropic Planning Companion, which is available at PlannedGiving.Com. If you want more help to select the right gift planning audience, it can be found in Module III of Planned Giving in a Box at PlannedGivinginabox.Com, with all the steps and materials required to build an effective planned giving program. Besides writing this column and consulting for PlannedGiving.com, Brian Sagrestano is President and CEO of Gift Planning Development, LLC, and a principal in Constellation Advancement, LLC. He co-authored The Philanthropic Planning Companion, which has everything a gift planning officer needs to know. Here you’ve got a direct pipeline to the author. Ask Brian your questions at PlannedGiving.com/Brian.
Message from CEO
First, a Thank You For those of you who are reading this and are clients of mine, I truly thank you for your business. When I started in 1998, I did it with the goal to make planned giving accessible to your average prospect. At the time, planned giving was so bogged down with legalese and mind-numbing details that fundraisers were intimidated and donors befuddled. We’ve come a long way since then, but there’s still a shocking number of fundraisers taking calculator courses and fretting about tax codes while ignoring the relationship part of their job. Not you. You’re among the top 5% who get it and take the lead. As our client, you know that planned giving is a people business and simple is best. In 2000 when I introduced the planned giving postcard, a competitor who was (and still is) in the business of printing lengthy planned giving newsletters, pronounced: One cannot convey the complexities of planned giving in less than 500 words. I proved them wrong. It turns out when donors are sorting through their mail with the TV on and chicken on the grill, they don’t want to read an essay about the complexities of planned gifts. They will, however, read a colorful, oversized postcard with a short teaser about “the gift that generates cash flow for life.” (That competitor started producing postcards not too long after their somewhat hostile critique.) It’s been a fight to keep it simple from the beginning. I’m not wavering. Actually, the noisier our world gets, the simpler we make our message. My motto these days: Don’t just simplify. Oversimplify. Thank you for choosing to not add to the clutter, but instead promote a simple, accessible planned giving message. Thank you for choosing to do business with PlannedGiving.com. New Features For Our Clients Here are some new features available for your planned giving website, as well as few existing ones you may not have heard about. Specialized websites for religious organizations (Catholic and Jewish available now. More coming soon.) Beneficiary designation highlights (bank accounts, CDs, savings bonds and more) New gift types (Mineral Interests just added past December) Weekly tips delivered to your donor’s inbox Content translation (Spanish, Korean and more) Calculators that generate reports with the option to forward to prospect’s advisor eBrochures that are customized to match your branding (no generic stock images) Donor-centric content that’s always tweaked to stay fresh and search engine friendly Language for normal people, not attorneys Videos of gift descriptions with your branding (a first in the industry) Want more information? Contact us at 800-490-7090. As always, we’re here to help. Viken Mikaelian CEO, PlannedGiving.com p.s. I’m collecting examples of cringe-worthy language on planned giving websites. A little twisted, yes. But it inspires me. It reminds me why we fight so hard for simplicity. If you come across a good example, please email it to us — Success@PlannedGiving.com.
The 1% Challenge
I wonder if anyone’s ever done a study to see when gyms are more crowded—in January (post new year’s resolution season) or in the spring (pre swimsuit season). I’d put my money on January.
Why Jews Give
Two Hebrew phrases help explain why Jewish giving is so high. Two women pass a beggar on the street. Both women have the exact same income and expenses. The first weeps at the suffering of the beggar and gives him $5 out of the goodness of her heart. The second notices but rushes past. Later in the day, however, she feels compelled because of her religious beliefs and returns to give the beggar $100. Who is the better person?
