Why you need a planned giving program
As a nonprofit professional, you’ve likely already heard major gifts are now outpacing smaller donations. This can be a bit alarming, honestly, when your organization’s pool of major gift donors is a bit shallow. Your organization can overcome this obstacle through hard work and by implementing a planned giving program. If you don’t have a lot of major donors or recurring donors, your focus should first be on converting your organization’s one-time donors to recurring donors. These donors are more loyal and are more likely to support your organization with a planned gift in the future (if you’re willing to work to nurture the relationship).
If you don’t already have a recurring donor program, our Radical Recurring Giving Guide can get you started!
With a reliable recurring donor group, your nonprofit will (hopefully) be able to weather the storm of fewer small donations you’d normally count on throughout the year. Next, you should work on establishing a planned giving program.
Planned giving is essential to your organization because it allows you to convert your loyal, small gift donors into major donors in the future. By having your supporters name your organization as a beneficiary in their estate planning, they’ll likely be able to give more in the future than they ever could during their lifetime.
Your organization may not benefit right away from instituting a planned giving program, but it allows your nonprofit to plan out its future and helps ensure you’ll still be there improving the world a decade or two from now. In the years to come, planned gifts will add to the number of major gifts your organization will receive throughout the year. While planned gifts are less predictable because donors can’t plan an exact date of death (sorry to be morbid!), they will likely match major gifts in size and can provide crucial funding in your organization’s time of need. Your donors will also benefit from a planned giving program through unique tax advantages that can protect their assets or relieve the tax burden on their heirs if necessary.
Use these three tips to get your planned gift program started.
1. Partner with local financial planning experts
If you’re ready to start forming a planned giving program, you’re going to need to familiarize yourself with the planned giving options your donors have available to them and what their advantages and disadvantages are. Before trying to google the ins and outs of estate planning yourself, your organization should take advantage of local, licensed financial advisors to obtain this knowledge. Much like you would build a relationship with a donor, you’ll want to approach financial advisors with the intent of creating a relationship. This can be beneficial for your organization because loyal financial advisors will be willing to teach you about new estate planning options as they arise and may even refer their clients to your organization when they are looking for a nonprofit to donate to during tax time or when planning for retirement.
Establish relationships with multiple financial advisors—especially those who specialize in planned giving. Get to know about annuities, trusts, and other options available to your donors. Ask for permission to refer prospective planned gift donors to these financial advisors if they have questions only a professional can answer. They’ll likely appreciate the referral and will think of your organization more favorably when suggesting nonprofits to their own clients.
2. Tell your donors about your planned giving program
Set up a planned giving landing page on your website, create some print materials and an email blast, and tell your donors about your planned giving program. Reach out to your major gift, recurring, and other loyal donors and let them know your nonprofit has a planned giving program. Let them know how their families, your nonprofit, and the community would benefit from a planned gift and continue to reinforce the program in your organization’s newsletters and at your fundraising events. If you send an appeal asking donors to speak to their financial advisors about making a planned gift, give them a way to respond and let you know that they intend on including your nonprofit in their estate planning. When these responses come back, give them a call and ask to meet with them to discuss their plans and how your nonprofit fits into them.
From there, you can invite the donor to meet one of your partnering financial advisors, or, if they have their own financial advisor, encourage them to put their plan in place.
3. Keep showing your planned gift donors some love
One tricky part of planned giving is that the gift isn’t always guaranteed. If a donor decides no longer to support your nonprofit, they can change the beneficiaries of their estates almost effortlessly. The reason many planned gifts are revoked is that the donor is no longer as engaged with your organization. Feeling unappreciated or forgotten is a key reason that donors rescind their planned gifts. This is why targeting existing major gift and recurring donors can be so helpful! These donors are already loyal to your cause and want to see your organization succeed now and in the future. Keep these donors engaged by celebrating their status as a planned gift donor.
Create a group specifically for planned gift donors and incentivize being part of it. If a donor has indicated that they’ve included your nonprofit in their estate planning, you should continue to steward them and maintain that relationship. Your future gift may depend on it! Your stewardship efforts can be inexpensive while still ensuring these donors stay engaged and feeling appreciated. Give them free invitations to your events, send them handwritten notes on their “donorversary,” and keep them on your newsletter mailing list! You may even want to give them a token of appreciation when they first make their estate gift known to you. Send them a memento they can cherish and that memorializes the story of their loyalty to your organization.
With the number of small donations that nonprofits typically rely on shrinking in number, now is the perfect time to start a planned giving program at your organization. A future planned gift from a loyal donor could help ensure the viability of your nonprofit for years to come. Planned gifts allow your donors to make a greater impact on your community than many could have hoped to achieve during their lifetime, and often, these gifts match major donations in size. By creating relationships with financial planners and working with your donors to establish planned gifts, you are providing your organization with more financial security in the future.