Why Getting In The Will Today Matters
Long-term study shows multiple benefits for charities to get in the estate plan sooner. We all know charitable estate giving is a big deal. In comparison, despite all of the media attention and conversation generated by corporate giving, annual estate giving has always been much larger. (In some years, charitable estate gifts are more than double all corporate gifts.) Of course, we all know that to receive any estate dollars, your organization must get in the will or other estate planning document. So, getting in the will eventually is clearly important. Get into the will today. But, new evidence is emerging as to why it is important not just to get in the will, but to get in the will today. The evidence comes from a large national survey called the Health and Retirement Study. This study, starting in 1992, tracks older adults (age 50+) year after year. It includes information about their current estate plans, their current charitable giving, and their post-mortem transfers. Because this study tracks changes in giving and changes in the estate plan for the same people over many years, we can now see what happens to current giving after charity is added into the estate plan. We do this by looking only at those older adults who didn’t have a charitable component in their estate plan and then later added charity into their plans. This way we are able to compare their giving before and after they added charity to the will. If you’re in their wills, you’re on their minds. So, what happens after people put charity into their will? Simply put, giving goes up. A lot. During the eight years before these people had added charity into their wills, their annual giving averaged $4,210. Two years after the will had changed to include charity, their average annual giving had doubled to $8,500. Even four years after the will had changed, their annual giving was still much higher than before averaging about $7,500. Although we can’t prove a cause-effect relationship (only that it happens at the same time), the connection makes sense. When the donor puts a charity in the will, the donor is treating the charity like a family member. That commitment naturally draws the donor closer to the cause, and makes it more likely that the donor will support in other ways. Why wait when you can benefit now? Some donors may increase their current giving by reasoning that, “Since the charity will be getting money from my estate anyway, why not give it now when I can see the impact?” Fundraisers use similar reasoning to convert a revocable estate gift to an irrevocable planned gift. The explanation goes, “You are planning to make the gift anyway, why not make it irrevocable and take an income tax deduction today through a [remainder interest deed, charitable remainder trust, charitable gift annuity, etc.]?” Want more? Get in early. Getting in the will early can help by increasing current giving and by opening conversations to convert the gift into an irrevocable planned gift. It may also help by increasing the size of the estate gift. In reviewing the over 12,000 decedents in the study, most charitable plans were added within five years of death. On average, one longer-term plan was worth four plans made in the last two years of life. In short, getting the charitable plan in the will earlier was associated with more dollars for the charity (as long as the charitable plan stayed in the will). Don’t forget about your bequest donors. So, there are a lot of good reasons to get in the plan early. But, one of those reasons is not so that the fundraiser can “count it and forget it.” The same study showed an enormous amount of end-of-life instability in the charitable component of the estate plan. If you forget about your planned bequest donors, they will certainly return the favor. Russell James, J.D., Ph.D., CFP is a professor in the Department of Personal Financial Planning at Texas Tech University. He directs the on-campus and online graduate program in Charitable Financial Planning. Contact: russell.james@ttu.edu RELATED TOOLS: Bequest Brochure Estate Planning Toolkit Categories: Beneficiary Designations, Bequests, Giving, Planned Giving Marketing, Marketing Planned Giving, Relationships
Is It Okay To Use A Bequest For Operating Expenses?
Question My nonprofit organization currently uses all bequest proceeds for operating expenses. The family of recently deceased donor has questioned this and wants us to designate the funds for endowment. What should we do? Answer Remember that the only funds that serve as true endowment are those that are restricted by the donor. Since the donor’s will did not restrict the funds, it is impossible to have these funds go to endowment. However, they can be treated as “quasi-endowment,” “board designated endowment,” or “funds functioning as endowment,” which are funds your organization’s board will treat as endowment (only using the draw from these assets based upon your spending rule) unless the board formally acts to tap into the principal. The larger question you need to address is what is your policy on using unrestricted planned gifts and why. Many organizations are not particularly thoughtful on this point and simply use the dollars to plug holes in their operating budgets. Best practice for donor-centered organizations encourages a formal policy based on donor expectations. Most donors who make unrestricted planned gifts expect the proceeds to go to endowment. They are giving an organization a gift that represents part of their life’s work and hope that it will sustain the organization going forward. A policy that directs all or most unrestricted planned gifts to board designated endowment honors that legacy. At the same time, organizations do need some operating funds. Probably the best compromise is to set a policy stating that the first $X or X% (assume 5-10% or $5,000-$10,000) of any unrestricted planned gift is allocated to operating expenses, with the balance automatically allocated to board designated endowment. The board can always override this policy if funds from a particular planned gift are needed for operating or another purpose (or the donor/family has a clear preference that isn’t in the will). But it sets the tone that such gifts are not intended to be spent immediately. Categories: Beneficiary Designations, Bequests, Planned Giving Marketing, Marketing Planned Giving, Relationships
What a Planned Giving Professional Can Learn from a Realtor
By Two Cent Steve, Planned Giving Director at one of PlannedGiving.com’s university clients Two hundred and fifty three brave souls signed on for a recent webinar with Viken Mikaelian and Tom Ahern. That’s two out-of-the-box thinkers with a habit of saying it like it is … bound to get interesting.
Should Your Planned Giving Postcards Have A Reply Mechanism?
Clients and friends often ask if including a reply mechanism on their planned giving postcards is worth the added expense. It depends on the circumstances, but generally, I do not feel it’s worth it. As we all know, planned giving is a low-response business. So even with the most successful direct mail programs, we see very few reply cards actually filled out and returned. However, this does not mean your information is not getting read. It’s just that most people are not going to take the time to respond, on a whim, to questions about a subject that requires some in-depth thought and planning. Remember: You are not selling sweepstakes. You’re educating. You’re reminding. And you’re building relationships. Focus on Frequency What does this mean for you? You’ll have additional opportunities to reach your prospects. Marketing 101 says the more touches the better. So nix the expensive response card and use the savings to send out more touches. Mail your marketing materials more often instead of including a reply mechanism. After one or two postcards, you’ll have piqued some of your prospects’ interest. Card #3 might go on the fridge as a reminder to discuss it with the hubby. After card 4 or 5, maybe some of them will even call. Or you’ll call them to say “thank you” for a past annual gift, and they’ll remember those postcards and say, “What is this about some gift that pays me retirement income for life…?” Bingo. A door just opened. Now’s your chance (have you practiced your elevator pitch?). Two Caveats Disclaimer #1: If your mailing quantity is quite high—say 30,000 pieces or more—then it’s a different ballgame. At those quantities, the pricing between the two products becomes essentially the same because of the volume. Disclaimer #2: I do believe there is a time and place for a response card. When and where? Well, for starters, solicitation letters are a good opportunity to enclose a reply vehicle. There is usually no extra cost, and a reader who has made it through an entire letter (as opposed to a postcard, which is just a 10-second read) is already more engaged, and therefore more likely to respond. Category: Planned Giving Marketing
Asking Your Prospects for Their Email Addresses
Should you ask visitors to your website to provide their email? The answer depends on what you’re offering in exchange. I was perusing a nonprofit’s planned giving website and came across an option to download an eBrochure. “Great!” I thought. “Time to do some homework on the competition.”* I clicked the link, and was immediately presented with a popup asking me to enter my name and email address in exchange for the eBrochure. I obliged (with an alias, of course). And … I was promptly redirected to a standard eBrochure that was clearly available to anyone, anytime — no personal information needed. Whoop-dee-doo. Look: If I give away my personal information, I expect to get something valuable in return. And I strongly suspect I’m not the only person who feels this way. So here’s my rule: If you’re asking for personal information on your website, make it worth your visitors’ while. Let them know, up front, that they are going to get something of value after they click. Maybe it’s a set of note cards with your logo on it. A pin. Postcards with cute kittens. Information that is not readily available anywhere else. Whatever. And if you are not offering something of value, do not presume to ask for an email address (or any other personal information)! First off, that’s being disingenuous. And secondly, your website visitor will probably just give you their “junk” email address anyway. If it’s just an eBrochure you’re offering, let them go straight to it. Why make people go through extra steps for what is essentially just a marketing brochure anyway? Collecting personal information can be like trying to climb up a very slippery slope. Be sure you’re not inadvertently damaging your nonprofit’s reputation by needlessly aggravating website visitors and prospects. *Speaking of spying on the competition… when was the last time you donated $25 to the nonprofit next door to follow their moves management? Businesses do it all the time. And the most successful nonprofits know to take their cues from the business sector. Want to learn more? Check out our upcoming webinar: The IRS Considers You A Business. Act Like One. Categories: Planned Giving Marketing, Marketing Planned Giving, Planned Giving Websites
The Mind Hates Confusion
Did you know that the average American in a major city is bombarded with over 3000 messages a day? Each day the Web grows by millions of pages. Wherever you travel, satellites are beaming endless messages a minute to every corner of the globe. We see rotating billboards on expressways, take calls from telemarketers, and get marketing materials in our mailboxes. A survey as long ago as 2009 revealed that a child is exposed to over 150,000 commercials by the time he or she is 18. I could go on. As a fundraiser, you are in the business of sales and marketing. You have an overwhelming amount of noise to cut through. If you want to be heard, you must differentiate. Your differentiating idea should be simple and visible and delivered over and over again in a variety of formats. Confusion Causes Procrastination Some time ago I went into a Best Buy to purchase a cordless phone. There were so many brands! So many options. I analyzed, over analyzed, and could not make up my mind. I left not buying anything. This happens to fundraisers, too. In fact, we all know non-profits are plagued by a disease called indecivitis. We meet, and discuss via email, and meet again. Then we call in specialists to help. Decisions are almost made. Then nothing happens. Half the team changes jobs, and the process of indecision starts all over again. Am I being harsh? I don’t intend to be. I’m just stating it as it is. I have made enemies and lost clients because of addressing serious issues within non-profits that no one wants to address. In fact, Jeff Comfort (Planned Giving, Oregon State) and I did a webinar on this topic. It was not for the faint of heart and our least popular webinar as it included some truth people did not want to swallow. The Power Of Simplicity. In 2002 we “created” the planned giving postcard. One of our competitors, who was heavily invested in printing newsletters, placed an ad on their website that read something like, “Many of you have been considering a planned giving postcard. But the fact is that the complex features of planned gifts can’t be related with less than 150 words.” We milked that statement all the way to the bank because we had something that worked, and we knew it. Now that competitor is producing postcards. Almost 15 years later. Your Donor’s Are Not Different. And if you think they are, you’re focusing on one or two who may be somewhat “sophisticated”. People’s minds can’t handle complexity and confusion. The only way to enter their mind is to oversimplify your message. Oversimplify. Simple words. Fewer words. Powerful words. Be ruthless about how you edit your message. Any language that requires analysis or a second reading… nix it. And please… do not have an academic edit or write your copy. They may be smart, but not when it comes to marketing. Category: Planned Giving Marketing
Edgy Marketing vs. Vanilla Marketing
You can play it vanilla, or you can be heard. What will you choose? Edgy planned giving marketing gets results.
Are you a Binge Marketer?
The classic cry of the binge marketer is “Oops… business is slow. I guess I’d better do some marketing and send out a mailing.” If you find yourself in the middle of a quiet spell, thinking that a few actions, a couple of phone calls and a mailing here and there will get things moving again, you need to rethink your strategy.
Who’s Your Tom Bond?
You’d never guess by looking at Thomas Chandler Cruikshank Bond, III, that he battled drug addiction for two decades, that he was jailed half a dozen times, or that he spent four years living in abandoned houses in East Baltimore. In fact, even if you had met him during most of those dark years, you never would have guessed what was really going on under his façade. He had a good job with an expense account, wore a suit and tie and drove a nice car. But, he says, “inside I was a wreck, miserable.” By 2002, Tom had been homeless or jailed for the past four years. He was injecting heroine and cocaine and had wasted away to 150 pounds. “I really thought I’d end up dying in the projects of Baltimore,” he says. Then, during yet another stint in jail, Tom heard (for the third time) about the Helping Up Mission, an organization that helps men break the grip of homelessness, poverty, addiction and mental illness. This time, Tom was finally ready to seek help. He entered the mission, and after graduating from their one-year spiritual recovery program, he was hired on staff. He continued moving around to different positions within the organization, and now he is Director of Programs and Services and oversees a team of 40 staff and eight programs serving 500 men. What a difference a year can make Tom Bond is a face and a story to a problem. He breaks the stereotype of the greasy-haired bum on the street. “The picture of homelessness and addiction that most people have isn’t accurate. The larger picture is the kid that breaks his leg and gets hooked on oxycodone and within a year or two goes to heroine. It’s a gigantic, terrible mess.” So Tom tells his story over and over and over. In his role at Helping Up Mission, he often gives tours to donors and foundation representatives. “Invariably my story pops out during the conversation. They’ll look at me in my suit and they’ll say ‘No way man. No way were you homeless.’” So who’s your organization’s Tom Bond? Who has a story that will compel your donors to give generously? Who can speak with emotion to represent the reality of what you are trying to accomplish? The story doesn’t have to be dramatic with drugs and jail time. It just needs to make people feel something— compassion, anger, excitement, or even guilt. If you’re a university, maybe your storyteller is a graduate doing breakthrough technology research. If you’re a Food Bank, perhaps it’s the blue-collar family who swears they would have starved that one tough year if not for your assistance. If you’re an elderly care facility, maybe it’s the 89-year old woman living with dignity and comfort and playing poker with her girlfriends on Thursday afternoons. But please don’t talk generically about all the residents; talk about this one. Tell her story. Here’s a quick mental marketing exercise to do. Envision all of your marketing materials, all your website copy, all the verbiage you use when talking to prospects, every PowerPoint presentation you’ve ever done. Imagine it all typed out on a multi-page document. Now imagine you have a bright orange highlighter in your hand. Go through all those words, highlighting only the ones that tell a story or convey real emotion. Most non-profits would see a lot of black and white staring back at them. Now, go find your Tom Bond. Tell stories. Make people feel. Category: Planned Giving Marketing
Google Uses Direct Mail Like Crazy
So it’s settled. Direct mail is a good idea. My husband and I run a small business. A very small business. So I was a little surprised to find out that we’re on Google’s mailing list. I’d understand if they sent me an email, or maybe a personalized video pop-up on YouTube. But no … the King of the Internet sent me a good old-fashioned letter, in a paper envelope, with a stamp, delivered by the postman. Yes, direct mail.
