I’ve met with a lot of people in my time at Apex Legacy Consultants. They’ve had vastly different financial situations, unique family dynamics, and different ways of approaching legacy planning. But across the board, I’ve noticed two things that most of those families have in common: 1) they’re often surprised at their net worth, and 2) they’ve never thought seriously about their legacy.
I get it. When it comes to net worth, most families simply haven’t taken the time to do the math and quantify the assets they have. All told, their total “number” is often much higher than they thought, especially once life insurance and real estate are considered. But when it comes to legacy-related thinking, most families just don’t know where to start. We know that 70 percent of Americans don’t have a will…and yet a huge percentage of Americans give philanthropically each year. What if every American had a plan in place, and every plan incorporated charitable giving? The impact would be incredible!
I think that nonprofit organizations have a HUGE opportunity to introduce their donors to legacy-related thinking and help shift their supporters’ mindsets from the “here and now” to building for the future. So, I’ve put together a list of the top ways to begin or build a planned giving program for a nonprofit. No matter where your organization is at, maybe this will help you take a step forward!
1. Prepare a business plan, including a planned giving budget for the first 1-3 years.
This requires a vision that stretches beyond the immediate needs of your organization and into the future. Start with a blank white board, round up your leaders, and start dreaming. Where do you hope to see your organization in 5, 10, 20, 100 years? You have to be able to answer that question before you can begin to flesh out a plan for funding that work. Once you’ve articulated a shared vision, estimate what it’ll cost to get there, in terms of finances, staffing, building/space needs, etc. Put together a rough timeline and marketing needs for moving toward that vision.
2. Identify who will be leading the planned giving program/department.
Every organization is different, and we’ve worked with successful organizations with no planned giving staff, as well as struggling organizations with huge planned giving teams. Look at your organization and your donors. Do you need a full-time position for planned giving, or could it be integrated into another individual’s set of responsibilities? Do you have someone on your team already who could thrive in this work, or should it be a new hire?
No matter what, you’ll need to ensure this individual has adequate time to dedicate to ongoing learning and providing both proactive and reactive planned giving support. Even if you intend to hire an external organization (like us!) to provide planned giving expertise and/or lead the program, you’ll need someone on your team to manage relationships with donors and provide leadership/direction to this consultant.
3. Solidify buy-in (and gifts!) from Board of Directors.
Board members often understand the value of long-term planning and sustainability, and they are clearly in support of your organization. Tap into their business and philanthropic backgrounds as you cast your vision for how planned gifts will impact the future of your nonprofit.
We often encourage organizations’ board members to be the first to go through our legacy gift planning program, so that they can lead by example and so that they truly “get” the potential of thoughtful legacy planning. Based on our experience, if an example family has a $1 million estate they will—once they incorporate strategic, tax-advantageous planning tools such as charitable trusts, bequests, and donor advised funds—leave, on average, $460,000 to charitable causes. Your board members love your organization and might have higher-than-average estates…imagine the impact they could have financially, and also imagine the way they could inspire others to think more strategically about their legacy!
4. Create a Planned Giving Advisory Committee.
Here’s your opportunity to broaden the visibility of your planned giving efforts, and also capitalize on your wider networks. Incorporate thought leaders from your community and pool of supporters to provide direction, connections, and advice. You might have new supporters come out of the woodwork who are interested in giving their time, expertise, or even financial support. And you’ll be able to vet new ideas before investing too much time and money into them.
5. Learn, learn, learn!
There are a lot of charitable vehicles that can be utilized to establish planned gifts. It’s important to understand both how these giving tools impact and interact with your gift acceptance policies and structures, as well as how these make giving easier and are often beneficial for your donors. Apex does consulting/training for development professionals, our blog is full of handy overviews, or we can recommend a few reputable trainings and conferences that’ll cover the basics.
To create a foundation of knowledge, I’d recommend you start with these vehicles: Bequests, IRA Rollovers, Gifts of Retirement Plans and Life Insurance, Gifts of Appreciated Assets, and Charitable Trusts.
6. Incorporate planned giving language and resources into your marketing.
Planned giving, at its core, is about helping donors understand the most strategic, and tax-efficient ways to give based on their age, stage of life, and net worth. Before we even get into estate/testamentary planning, we often talk with donors about how they’re giving now, and whether giving through a Donor Advised Fund, IRA Rollover, or other tax-efficient, flexible method would benefit them, and their favorite nonprofits. We suggest adding basic giving options, and being clear about how to give in each way, on your organization’s website. Have a print piece, like a brochure or flyer, ready to go with easy-to-follow giving instructions and an overview of the benefits of each type of giving. And use social media to share stories of unique gifts that have come into your organization. We can be contracted to create marketing materials or audit your communications, or we can set up a customized webinar for your donors to learn about strategic giving options.
7. Draft appropriate policies and guidelines.
Does your organization have a gift acceptance policy? Having a clear policy in place will help eliminate tension and disagreements when a major gift is received. In it, you should outline the parameters around the authority of the planned giving staff, as well as when Board approval is necessary, to accept or allocate a gift. Likewise, if your organization does not have an endowment/foundation, take some time to talk that option over with your leadership team. An endowment/foundation is simply a long-term, high-interest investment fund that functions like a savings account or safety net for your organization. It grows interest, which can be spent each year, but you can also tap into the principal of the account—usually for specific reasons and amounts outlined in your gift acceptance policy—to help achieve your mission. We’d be happy to recommend a reputable foundation, if you’d like to set up an endowment and don’t want to handle that internally. We can also provide templated gift acceptance policies.
8. Understand your supporters and data.
If you don’t have a secure system for tracking donor information and giving, this might be one of your biggest opportunities. It’s impossible to build key donor relationships, or be strategic about communication, without a database or CRM that holds constituents’ engagement history, contact information, future giving intentions, etc. Some planned gifts are set up many decades before they are actually paid to your organization, and you could have several rounds of staffing turnover in that time. Your data should be consistent and clear, so that any future leaders would be able to jump in and serve donors well.
If you invest in making sure your data is complete, you’ll also be able to identify opportunities to communicate with, and invite strategic groups to support your organization. Or, you could use it to understand your demographics and how your organization might be able to better serve your community of supporters. Do you have a lot older donors, and might it be worth offering a specific, weekday webinar outlining financial tips, and giving opportunities, unique to retirement? Single donors and those without kids might leave a bequest to your organization, in lieu of traditional heirs, but may feel alienated if your organization tends to plan events and programming focused on nuclear families. The more you know your constituents, the better you can serve them!
9. Form a legacy society.
Consider creating a society, or group, for donors who’ve remembered your organization in their estate plans. This can be a great way to create community between like-minded supporters who are likely your biggest cheerleaders. First, you’ll need to figure out who to invite! Here’s where a solid database will help you pull effective reports and target your focus. Give the group a name that has meaning to your nonprofit: connect it to a significant donor, founder, a well-known landmark at your organization, etc. Determine how you will honor, celebrate, and connect with this group of committed supporters, perhaps through regular meet-ups, extra communication so they stay in-the-loop, and/or by creating a wall or other physical space that honors their commitment.
10. Establish a framework for donor recognition and stewardship.
If a donor has shared their planned gift intentions with you, how will you thank them and celebrate their gift? Every organization handles this differently, but legacy gifts are typically revocable. So, it’s essential that those donors remain connected, feel cared for, and continue to trust in the future stability and effectiveness of the organization. This is where many organizations can unintentionally drop the ball. Send your legacy donors notes or postcards on birthdays, anniversaries, Thanksgiving, etc. Invite them to key events and consider making them VIPs when appropriate. Do anything you can to keep them engaged and front of mind, so they feel celebrated and so others are inspired to make legacy gifts of their own.
11. Capture and share stories.
Storytelling is one of the most effective and powerful tools in marketing your nonprofit and inspiring others to give. If someone has elected to name your organization as a beneficiary in their estate, invite them to share their story with you in writing, in video, or live at a gathering. Weaving stories of generosity into your culture creates confidence in the long-term stability of your organizations, and it inspires others to consider the ways they might be able to give in a greater way.