If you’re arranging a planned gift for your favorite nonprofit, there’s an important step that you shouldn’t skip:
Notifying the charity of your intentions.
It may seem silly, but it’s true — and planned gift reporting is a step many donors forget. A Special Report from Giving USA found that just 4 percent of donors always report their planned gifts to organizations, and 38.7 percent sometimes inform the organizations.
Maybe it’s because some donors take a “set it and forget it” mentality, since the gift won’t achieve its full potential until after the donor is gone. Or maybe the donor doesn’t want anyone to “make a fuss” over them. Nonetheless, notifying the charity about your gift intentions should be a priority, whether that gift is a simple bequest, a more involved charitable gift annuity, or anything else in between.
Four Good Reasons
So what’s the big deal? It turns out there are several reasons to report a planned gift:
- The nonprofit might not get the donation if it doesn’t know about it. Sometimes other heirs contest charitable donations. Sometimes brokerage and insurance services are slow to pay out on a planned gift or beneficiary designation. Sometimes they won’t pay out at all, until the charity contacts them. Planned gift reporting is a crucial step in the giving process.
- Knowing about a future gift helps a nonprofit to plan. Donations may be used for day-to-day operations, research, community outreach programs, construction, expansion, scholarships, or even an initiative stipulated by the donor. Imagine trying to budget for the future if you have no idea what sort of funding will be available.
- Some donors may wish to place restrictions on their gift that go against a nonprofit’s policies. Some nonprofits limit the types of gifts they receive. Knowing about a planned gift helps a nonprofit determine if it is appropriate. The charity can make recommendations to maximize the gift’s efficacy.
- Some planned gifts carry tax benefits to the donor. When you report your gift intentions to the nonprofit, they can provide you with the proper documentation for the IRS.
A Simple Process
If you’re a donor, the best thing you can do is contact the charity(ies) that will benefit from your planned gift. Let them know the amount you’re giving, type of gift, the type of account it’s coming from, any restrictions you’d like to place on the gift, and your contact information. Planned gift reporting is that easy.
Nonprofits can utilize several methods to increase the reporting of planned gifts. To be sure, the simplest is just to ask. You can include a simple statement in your donor communications. It can be a call to action, a closing paragraph, a checkbox on a donor reply card, or even a message on your planned giving website:
“Making a planned gift to our organization? Please let us know! That way we can ensure your wishes are followed, we can plan for the future, and we can properly thank you. If you wish to remain anonymous, that’s fine, too — we won’t share your name with the public.”
One of our clients got creative and sent out a Valentine’s planned giving postcard that read, “We Can’t Tell You We Love You Unless We Know.”
The bottom line? Donors and nonprofits alike benefit from proper planned gift reporting. Nonprofits can plan for and collect intended donations, and donors can ensure their wishes are respected. Never skip reporting a planned gift.
And don’t forget the Intention Form [PDF Download] and to subscribe to our Weekly Planned Giving Resources to help your career and build your nonprofit.
