Should Planned Giving be Denied Access to Annual Giving Donors?

We were recently asked:

Is there any “benchmark,” or industry standard regarding the mechanics of “handing off” a loyal direct mail donor to the Planned Giving Department?

Without airing too much “dirty laundry,” our in-house Direct Marketing Department refuses to give the Planned Giving Department access to the donor database out of fear that planned giving marketing activities with loyal donors will depress annual giving income from those donors. So basically the Planned Giving Department is being denied access to the best prospects, because of fear that planned giving will undermine annual giving.

How do other organizations handle this?

Our answer by Brian M. Sagrestano:

Many organizations have subscribed to the false notion that there is a limited pie of donations and that if you allow annual fund donors to be solicited for planned gifts, it will decrease the amount of pie, or dollars, for the annual fund.

In fact, just the opposite is true.

The 2007 Bequest Donors:  Demographics and Motivations of Potential and Actual Donors study,  conducted by the Center on Philanthropy at Indiana University (CPIU), found that when you approach donors loyal to your mission and they commit long-term through a planned gift, they actually increase the size of their annual donation because they have furthered their investment in your mission.

The study showed that annual gifts by legacy donors were twice the size of those made by non-legacy donors. Thus, by looking out for the donors’ best interest, and what they want to accomplish for your charity, you actually increase the size of the pie and your piece of it.

In this modern age of multi-channel, donor-centered marketing, the model of “holding donors” is in rapid decline.

If charities do not start to look at their unrestricted annual donors as people with personal planning and charitable objectives rather than as revenue streams, those charities will see a slow decline in annual giving receipts and donors over time, as the Boomers, Gen X and Millennials will not make unrestricted gifts the way that their parents and grandparents did.

These new cohorts of donors need to see the immediate impact of their gifts as well as long-term outcomes created by them. They also want to be much more involved as volunteers.

No longer can charities keep doing what they have done and hope to generate the same results, because the donors themselves are changing their behavior.

Your annual fund department may be holding onto their existing donors because they already see this decline starting and are fearful that if they release names, the decline will accelerate. Just the opposite is true. The more they hold onto these names, the faster the decline will come.

Today, successful charities are happily sharing names internally to ensure multiple points of contact to communicate their mission better. To keep those donors engaged, and keep those gifts coming.

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