Editor's Note

According to Giving USA 2006, charitable bequests totaled an estimated $17.4 billion in 2005. These charitable bequests made up only seven percent of the estimated total giving that year, which is not unusual compared to the last few years. However, research shows that one in three individuals currently do not have a charity named in their wills but would be willing to consider adding one¹.

These findings support that organizations need to upgrade donor consideration into donor action. In this month's issue of Fundraising Well, we review how you can leverage a planned giving program by understanding the fundamentals and acknowledging that you have more control than you think.

¹Report prepared for Campbell & Company at The Center on Philanthropy at Indiana University

Blackbaud's Fourth Annual State of the Nonprofit Industry Survey

There are 1.5 million nonprofits in the United States — how does yours compare? We invite you to take part in the fourth annual State of the Nonprofit Industry Survey, sponsored by Blackbaud. Fill out the survey to find out what other nonprofit professionals are focusing on and for a chance to win a new Dell^® notebook. Take the survey here.

Build Your Planned Giving Fundraising Strategy Today!

Building a successful planned giving program can be a challenge, but it is one that is worth the effort. Research has shown that planned giving is about lifestyles and loyalty, not wealth – so, believe it or not, it is up to your organization to uncover the potential planned givers from within your exisiting donor pool. Everyone in your annual fund program has the capacity to become a planned giver.

So what’s an organization to do? Avoid the common mistakes organizations make when attempting to secure planned gifts:

• Targeting the wrong prospects
• Sending the wrong appeal
• Asking too late
• Soliciting planned gift prospects for major gifts

Many times, these common pitfalls lead to poor responses and ultimately deter organizations from future attempts at developing a planned giving program. Too many organizations give up, inadvertently allowing them to miss a major opportunity to strengthen the long-term viability of their organizations.

Compounding the struggle is the historical lack of meaningful research on planned giving. But we do recognize some general facts. For one, there are many kinds of planned gifts, from simple bequests in a will or an estate plan, to annuities, charitable remainder trusts, charitable lead trusts, pooled income, life insurance, and life estates (see the sub-article for definitions). So while you may have been discouraged in the past by the lack of information (typically resulting from the fact that 70-90 percent of traditional planned gifts are unknown to an organization until after the donor’s death) there is still hope for your planned giving program!

Take the time to understand who makes good planned gift donors: the people who care about your organization and want to do something special. Sound like anyone you know? Your annual gift donors are your best planned giving prospects; you may be closer to receiving planned gifts than you think. Equipped with good information on your donors and the right marketing strategy, you can implement a thriving planned giving program.

As you look at your donors, it is important to avoid using misleading data. While you want to examine lifestyles and giving history, you’ll also want to leverage specific or custom modeling within your prospect research activities. This way you can apply historical giving patterns to analyze your database and create profiles of your annual donors by type of planned gift.

Understanding how to ask for a donation is also critical. Once you have identified your best planned giving prospects, think of these tips when it comes to your solicitations:

• Keep your message simple – your ask should be clear, concise, and focused.
• Make anniversary date solicitations – ask for a donation when the donor is most likely to give one.
• Adopt a segmented solicitation strategy – send the best type of solicitation for each prospect.
• Cultivate relationships with annual donors – build ongoing relationships with your annual donors.
• Integrate staff activities – encourage your annual fund staff members to work with your planned giving team.
  

Don’t Get Lost in Translations

Understanding the fundamental types of planned gifts is one of the first steps toward building a successful planned gift strategy for your organization. Review and share these terms among your staff.

• Bequest: A provision in a will or estate plan that allocates all of part of an individual’s estate to a designated charity
• Charitable Remainder Trust: An irrevocable trust that pays a specified annual amount (annuity = fixed payment, unitrust = fixed percentage) to one or more people for a fixed period of years. At the end of the term of the trust, the remaining assets are distributed to the charity
• Charitable Lead Trust: Similar to a charitable remainder trust, but the principal reverts to the donor or designated heirs at the trust term
• Charitable Gift Annuity: An irrevocable transfer of property (e.g. securities) in exchange for a contract to pay the donor an annuity for life
• Life Insurance: An arrangement where the donor gives a life insurance policy to the charity
• Life Estate: An arrangement in which a donor gives his home to the charity while retaining the right to live there for the remainder of his life
• Pooled Income Fund: An arrangement similar to a mutual fund, in which a donor contributes to a fund and receives a share of the proceeds based on the percentage of his contribution

Latest and Greatest

You received this email because you are subscribed to Fundraising Well. If you would like to unsubscribe, please visit unsubscribe.blackbaud.com to manage your subscriptions.

If this email was forwarded to you, and you would like to receive a free subscription, please visit http://www.blackbaud.com/profile/adduser.aspx and create an account. You'll be able to opt in to receive Fundraising Well and other Blackbaud publications at the bottom of the form. Once you create an account, you can manage your subscriptions at http://subscribe.blackbaud.com.

The information contained herein should not be construed as legal or professional advice. If you have questions about how this newsletter's content applies to your organization, you should seek advice from appropriate professional counsel.

© 2007 Blackbaud, Inc. All rights reserved.