This is just a reminder to readers that what’s contained in these monthly musings is my account of best practices (in 1500 words or less). I urge you to share these articles with your leadership team who make the difficult decisions…your board of directors and CEO or ED. The organization will benefit from the dialogue that occurs as you try to apply new knowledge to your own circumstances. And if you get stuck in the process…I’m only an email or phone call away!

How can we educate and ask client and family members to consider making a planned gift or memorial donation without being offensive or disturbing?

One of the most important lessons in effective fundraising is to be very aware of your own attitudes and preconceptions. I already know the majority of people don’t like asking for money. Couple that with an emotionally-charged discussion about death and taxes and you may be feeling about as popular as a skunk at a garden party!

Kidding aside, you don’t suddenly broach the topic. Rather, the organization should be regularly communicating with its constituents (including clients and their families) about the benefits of your programs. Use your newsletters to teach those closest to your organization how they can help. Include quotes from people (with their permission) that express gratitude toward the staff or service. Continually find ways to convey what others have done to help, the good things your organization was able to do with a particular donor’s gift. Tell stories that engage people and provide positive role models.

Planned giving is a:

  • complex program of various financial instruments that can be adapted to each donor’s needs and include a bequest from an estate, life insurance, charitable remainder trusts, marketable securities, annuities, and donor advised funds.
  • set of ways a donor can leave money/assets to a nonprofit at death; or a way to invest money so that the donor receives benefits during life and then bequeaths the remaining funds to the nonprofit.
  • gift, whether for current or deferred use, which requires the assistance of a professional staff person, a qualified volunteer, and/or the donor’s advisors to complete.
  • way that donors can realize their philanthropic objectives while maximizing tax and other financial benefits.

Memoriam donations are made to honour someone’s life. You might see in an obituary, “in lieu of flowers please send a donation to…” (a specific charity that the deceased or their family has favoured).

Both these sources of funds can be elusive to organizations that don’t have the skills or staff to initiate. However, a memorial donation program is relatively easy in comparison to the expertise that’s needed for planned gifts so let’s start there.

Encouraging memorial (commemorative, in-honour, or tribute) donations

My advice to those of you without well-resourced development departments is to learn from the experts! Fundraisers are generous people who willingly share their knowledge and experience. Contact “the competition” and you will probably be pleasantly surprised if you ask their advice or whether they would share their samples of in-memoriam cards, newsletters, fundraising requests, etc. If you’d prefer to be more subtle you can visit the local funeral home and collect cards that promote memorial donations or ask colleagues and family to pass along “souvenirs” for your files from charities they support. In addition, search the web; it’s full of great examples. Don’t reinvent the wheel…it’s working just fine as is!

A relatively easy “sell” is to encourage “commemorative, in-honour, or tribute donations.” These are gifts to your charity in celebration of a donor’s milestone anniversary, birthday, wedding, or some other special occasion in lieu of a gift. These opportunities are usually initiated by someone who already supports your cause financially or as a volunteer…and often both. They have reached an age or comfort zone that prefers to enhance a cause they care about than seek gifts for themselves.

Remind your constituents regularly that this “giving option” is offered. There is a balance between communicating your organization’s needs and demonstrating the good things that are accomplished through generous support. Make sure your audience hears both messages.

Whatever your approach, the board should be supportive. Commemorative and memorial giving offer a simple entry point that’s not too intimidating but may result in an even bigger gift. By communicating how people can make a difference you might just receive some “manna from heaven” from someone who appreciated the good things you did to help during their life.

Planned giving: Benefits and challenges

This is definitely a much bigger step than just encouraging memorial or commemorative gifts and builds upon the relationships you’ve already established with dedicated donors. Let’s look at some benefits and challenges of planned giving:

BENEFITS CHALLENGES
  • fulfills long-term relationships with a donor
  • increases charity’s financial stability
  • bequests are often endowed – ongoing income from interest and donor’s name lives on in perpetuity
  • part of a complete fundraising plan
  • usually involves major gifts
  • flexible options for the donor: cash, annuities, personal property, life insurance, outright gift or opportunity for deferred giving
  • win/win for organization and donor
  • becoming a growing source of funds in Canada, therefore, more widely known as a method of support
  • population is aging, more people consciously writing wills
  • “boomers” in or approaching an age when they re-examine their financial needs and update wills
  • greater number of seniors have adequate retirement income
  • requires professional expertise and strong leadership
  • personal discomfort around fundraising, death and taxes can delay boards from proceeding
  • rarely an immediate payoff – can be 7-10 years before a nonprofit receives significant funds from planned gifts
  • in the case of a residual bequest charity must wait until all survivors have died
  • does not happen in a vacuum – must build on a solid fundraising program supported by dedicated, renewing donors

 

Prerequisites to a planned giving program:

  • Strong donor base – the organization should be at least 10 years old, raise an increasing amount of money every year, and have matured from annual fund contributions to major gifts.
  • Strong board commitment – the board and senior staff must understand and support a planned giving program and be willing to invest in the future.
  • Solid infrastructure – the organization needs to invest the time and resources to develop gift acceptance and investment management policies, as well as systems to market and administer planned gifts.

Who are the most likely supporters of planned giving?

  • Begin with your board of directors and other volunteers (if they won’t commit, why would an outsider?).
  • Review your regular donors who have demonstrated their growing commitment to your agency – examine donation history to determine length of giving relationship and amounts.
  • Donors that enroll in monthly giving, either by debit or credit card, have proven their commitment and are good candidates for a legacy gift.
  • Your “leadership” donors (those who have consistently made significant gifts) may be your most receptive but be open to surprises – sometimes the person who can’t afford a major gift of cash is asset-rich and is able to make their mark through planned giving.
  • Identify friends of the agency in your catchment area – people who have shown interest in your work.
  • Does your agency have a high percentage of older donors? If so, you still need to ensure they have had a strong relationship as donors before you’d consider a face-to-face solicitation.

Next steps

Are you currently asking your clients and their families to support your organization on an annual basis? If so, that suggests you are being strategic about ensuring that all your stakeholders are invited to donate regularly and hopefully you are experiencing growth in your development program. If not, then it’s important to ask why?

That brings us full circle. Is it possible that the board or staff’s discomfort with asking for money is holding your organization hostage at the expense of programs and services? If that’s the case, you should probably review previous months’ Fundraising Q & As and other materials on starting a fundraising program because you need to build the infrastructure first.

To those whose fundraising program is growing, you can decide if you’re ready to try some of these steps, keeping in mind the prerequisites mentioned above.

  • Use your newsletter to tell stories that engage your audience.
  • Provide calls to action on a regular basis.
  • Define and remind people of all the ways they can help: cash donations; tributes and memoriams; gifts-in-kind (that are on a defined “wish list”); expertise from professionals; board involvement; program or administrative volunteers; linkage to peers who would support; leaving a legacy, etc. (and be ready when they respond!).
  • Use testimonials and thank you messages to promote your work.
  • Make it as simple as possible for people to help…via your website or donor reply forms with self-addressed envelopes (which don’t have to be stamped).
  • Find a champion who’ll spearhead planned giving, identify expert advice, and then tell your world how they can help.
  • Invite a reputable investment firm to host an information session on tax benefits of legacy giving.

For more tips and ideas see:

Cynthia Armour is a freelance specialist in fundraising and governance. A Certified FundRaising Executive (CFRE) since 1995, she volunteers as a subject matter expert with CFRE International. She works with boards and senior staff to ensure that strong leadership will enhance organizational capacity to govern and fundraise effectively. Contact Cynthia directly at 705-799-0636, e-mail answers@elderstone.ca, or visit www.elderstone.ca for more information about her services.

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