Importance and Benefits of Planned Giving

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[Short dramatic video clip originally published on LinkedIn.]

For charities and nonprofits, finding and maintaining sources of funding can be the most difficult and time-consuming task of all. This constant search for money exhausts resources that could be better spent elsewhere.

Yet there’s a key source of funding that many of these organizations ignore, compounding their money struggle in the process: planned giving.

Planned giving is, in its simplest form, a sizable donation given over time or as part of a donor’s estate. Developing a marketing strategy and a 12-month marketing plan to pursue planned gifts can literally change an organization’s financial landscape, providing more secure long-term footing for the journey ahead. In fact, even financial advisors are advocating planned gifts to their clients (another reason we provide advisor-centric tools).

Not pursuing planned giving, on the other hand, is about as sensible as the decision by the Titanic’s captain to ignore those warnings about ice. Nonprofits, are, after all, just as prone to going under as that “unsinkable” ship — and planned gifts can be a veritable lifeboat when the waters get rough.

Everyone Savvy Is Doing It

No peer pressure here, but consider this: In 2011, a report from financial giant Morgan Stanley stated that a growing number of nonprofits are successfully using planned giving, and that it’s often responsible for more than half of new capital campaigns.

Planned giving donations are among the largest gifts a nonprofit will receive, often 200 to 300 times the size of annual gifts. Even those fundraisers that just a dip a toe in the planned-giving waters are earning 50 percent to 100 percent more than those that aren’t.

This means if you don’t have a planned giving strategy, you’re losing out on a boatload of funding. And another group is getting the funding that could have been yours.

Quite simply, this means if you don’t have a planned giving strategy (such as a simple 12-month marketing plan), you’re losing out on a boatload of funding. What’s more, it means that another group is getting funding that could have been yours — and there’s a lot of competition out there. The Urban Institute reports that in 2013, approximately 1.41 million nonprofits were registered with the Internal Revenue Service. So, while your charity is investing time and resources just to find ways to stay afloat, another nonprofit is using planned giving not just to survive, but to thrive and chart a course toward growth and sustainability.

The Eastern Regional Conference on Philanthropy is a great resource to learn more. Another resource is our video interviews and webinars with seasoned experts.

The Great Wealth Transfer

Here’s something else to consider: Financial experts are predicting that, over the next five decades or so, between $40 trillion and $140 trillion will be passed from one generation to the next.

That’s trillion, with a ‘T,” and it represents the greatest wealth transfer in the history of the world. Here’s the kicker: Morgan Stanley predicts about a third of this money will likely be transferred to nonprofits through — you guessed it — planned giving.

Here’s the kicker: Morgan Stanley predicts about a third of this money will likely be transferred to nonprofits through — you guessed it — planned giving.

Yet the only nonprofits to get a piece of this pie will be the ones that pursue it — it’s rare for donors to seek out charities on their own. Instead, potential donors have to be identified and courted in order to establish a lasting relationship.

For those who do not know their numbers, a million seconds is 12 days; a billion seconds is 31 years, a trillion seconds is 31,000 years.

Throwing a monkey wrench into the works is a study from RBC Wealth Management, which found that 30 percent of Americans surveyed have done no wealth transfer planning at all. Quite simply, that means there’s going to be a staggering amount of money up for grabs. In 2015 alone, according to Giving USA, $373 billion was donated to charitable causes — just imagine how much more is available. With a little effort, some of that money could be working to keep your nonprofit on course.

30 percent of Americans have done no wealth transfer planning at all.

Appealing To A Broader Audience

Giving USA reports that individuals make 71 percent of the charitable gifts in the U.S. Many, though, cannot make as large an individual gift as they’d like. Furthermore, according to Target Analytics, of those giving for the first time, just 29 percent become repeat donors.

Planned giving is the perfect solution, because it allows donors to have a much greater financial impact than if they’d given a single gift. Despite that fact, fewer than 10 percent of Americans utilize planned giving.

Why? Most of it boils down to simple awareness — if a donor has never been approached to set up a program, how will they know it’s an available option? By ignoring planned giving, nonprofits effectively close the door on the opportunity to reach a much larger section of the population. That, in turn, means those nonprofits are pulling from a much smaller funding pool.

Fewer than 10 percent of Americans utilize planned giving. Why? Most of it boils down to simple awareness.

Yet there’s a wide range of options for potential gift-givers to utilize, making it much easier to fit philanthropy into their budgets and long-term plans. Life insurance, bequests, annuities, trusts, retirement plan assets, securities, gifts of property — the list is long and offers flexibility for donors from a broad range of financial backgrounds.

Don’t Put All Your Eggs In One Basket

As the economy fluctuates, so do gifts to nonprofits.

And according to Blackbaud, which makes software for nonprofits, Baby Boomers are responsible for 40.4 percent of all charitable giving in the U.S.

Most of us have heard the saying, “Don’t put all your eggs in one basket.” But if your nonprofit is relying solely on annual giving and individual gifts, that’s exactly what you’re doing. And if that funding basket gets dropped, it will be hard — perhaps impossible — to recover from the mess.

Consider this: After the Great Recession, the number of charities seeking bankruptcy protection rose considerably. Such a move was once rare for nonprofits; they were far more likely to just fade into obscurity when faced with financial hardship. Today, though, bankruptcy protection is an accepted practice for charities.

That’s largely because wary donors are now pushing charities to operate more like businesses — and those that don’t make the cut will not only fail, but be held accountable for that failure. Where a charity could once float along through the lean years, head barely above — or slightly below — water, today’s charities have to show results, or else.

A comprehensive, planned giving strategy can guide your nonprofit through the rough waters. It can be a life preserver for times when sources of one-time charitable gifts are sinking. Planned giving can ensure a consistent, long-term source of funding, and maintaining focus on that revenue stream can help smooth the waves in the future.

If your charity doesn’t have a planned giving strategy in place, it’s time to reconsider. Proceeding without one makes about as much sense as re-arranging The Titanic’s deck chairs — and we all know how that turned out.


Here are some solid steps, many of which can be implemented easily and for free, on how to begin marketing planned gifts. In addition, a good place to begin is with a planned giving website.

Planned Giving, The Titanic, and Other Stuff We Do Not Want To Hear About

An interesting post on LinkedIn. Share this PDF and the video below with your Board. Before you begin, consider our 12-Month Planned Giving Marketing Plan.

The Planned Giving Bible

The Planed Giving Bible: It's the definitive guide to gift planning. It covers the "why's of giving" that helps you better understand the upside and downside of different giving options for both you and your donors.

Steve Perry, J.D., from Furman University comments on The Importance of Planned Giving (PDF)

Yes, Virginia, you DO Need a Planned Giving Website