SROI and Planned Giving
S.R.O.I. In today’s competitive fundraising environment, nonprofits must think beyond immediate revenue and consider long-term sustainability. Planned giving is often viewed as a long-term revenue stream, but its true value extends beyond financial returns. By embracing a Strategic Return on Investment (SROI) approach, nonprofits can leverage planned giving not only for revenue but also to build authority, trust, and donor loyalty that lasts generations. The Strategic Return of Planned Giving Higher Gift Values and Lifelong Donor Engagement Planned gifts consistently outsize annual gifts by a significant margin. Research from Dr. Russell James, a leading expert in charitable giving psychology, highlights that donors who include a bequest in their will often increase their lifetime giving as well. This challenges the common misconception that planned giving cannibalizes other fundraising efforts. Instead, planned giving deepens donor commitment and reinforces their connection to the organization’s mission, leading to both immediate and future financial gains. Cost-Effective Fundraising with Exponential Returns Planned giving is among the most cost-efficient fundraising strategies. Once established, a well-maintained program requires significantly less investment compared to annual giving campaigns or major gift solicitation. Studies indicate that the cost to raise a dollar through planned giving ranges from $0.20 to $0.30, substantially lower than traditional fundraising events or direct mail appeals. Over time, planned giving ROI can range from 1:4 to 1:20, meaning nonprofits can receive $4 to $20 for every dollar spent on program development and marketing. SROI: Beyond Financial Metrics Traditional ROI focuses on dollars raised, but Strategic ROI (SROI) considers the broader impact of planned giving on a nonprofit’s brand, donor relationships, and long-term growth. 1. Authority and Trust in the Nonprofit Sector Planned giving isn’t just about receiving gifts—it’s about positioning a nonprofit as a trusted steward of legacy contributions. Donors who include a charity in their estate plans are making a profound commitment. This act signals to other donors that the organization is stable, reliable, and worthy of long-term investment. A well-executed planned giving program enhances credibility, setting an organization apart from competitors vying for donor support. 2. Strengthened Donor Loyalty and Engagement Bequest donors often feel a deeper sense of belonging to the organization. Planned giving transforms occasional supporters into lifelong champions, increasing retention rates and encouraging multi-channel giving. According to Dr. Russell James, donors who make planned gifts are more likely to continue giving annually, reinforcing a cycle of generosity that benefits both short-term and long-term fundraising efforts. 3. Mission-Aligned Growth and Stability Unlike annual gifts that fluctuate with economic downturns, planned gifts provide a stable revenue stream that sustains an organization through financial uncertainties. This strategic advantage allows nonprofits to plan for the future with confidence, reducing reliance on emergency fundraising efforts. 4. Career Advancement for Fundraisers and Leaders Nonprofit professionals who take the initiative to introduce and champion planned giving programs often position themselves as forward-thinking leaders. Board members and senior executives value proactive individuals who drive long-term strategy, making planned giving advocacy a career-enhancing opportunity. Those who integrate planned giving into their organization’s development efforts not only contribute to financial stability but also demonstrate vision and leadership, which can lead to greater career recognition and advancement opportunities. Key Factors Impacting SROI in Planned Giving 1. Program Maturity & Long-Term Commitment Planned giving requires patience. Many organizations see little immediate financial return in the first three to five years, but those who remain committed experience exponential growth as their donor pipeline matures. 2. Organizational Infrastructure & Investment in Education A successful planned giving program requires strong leadership, internal education, and cross-departmental collaboration. Training development staff and board members to communicate the value of legacy giving is critical to securing high-value commitments. 3. Donor-Centric Messaging Effective planned giving programs focus on donor motivations rather than organizational needs. Messaging should emphasize impact, legacy, and values alignment—not just tax benefits. Studies show that donors respond more favorably to legacy-focused messaging, as it connects to their desire to make a lasting difference. Strategies for Maximizing SROI in Planned Giving 1. Promote Bequests as an Entry Point Bequests remain the most common and accessible planned gift vehicle, representing up to 90% of all planned gifts. By making bequests a focal point, nonprofits can simplify entry into planned giving while gradually introducing other giving options, such as charitable gift annuities or donor-advised funds. 2. Integrate Planned Giving into Every Fundraising Conversation Planned giving shouldn’t be an isolated initiative. Instead, it should be woven into all donor communications, from annual fund appeals to capital campaigns. Highlighting planned giving options in newsletters, social media, and stewardship materials ensures it remains top of mind. 3. Personalize Donor Stewardship Donors considering planned gifts value deep, meaningful relationships with the organizations they support. Regular check-ins, personal thank-you letters, and legacy society recognition programs help cultivate a sense of belonging and commitment. 4. Leverage Digital and AI Tools for Outreach With AI-driven marketing and donor data insights, organizations can identify and engage potential planned giving donors more effectively than ever. Digital resources like personalized donor journeys, email automation, and interactive will-planning tools increase planned giving participation. Planned Giving is a Strategic Investment Planned giving isn’t just a financial decision—it’s a strategic investment in an organization’s future. By shifting from a narrow ROI perspective to a broader SROI framework, nonprofits can recognize the true power of legacy giving: securing significant financial gifts, building credibility and trust, and fostering lifelong donor relationships. Rather than asking, What’s the immediate financial return?, the more strategic question is: How will this investment position our nonprofit for long-term success? Those who embrace planned giving as an integral part of their fundraising strategy will not only increase revenue but also strengthen their organization’s standing in the philanthropic community for years to come.
