“The biggest wealth transfer in history is set to take place,” stated a BMO Retirement Institute Report in July 2009. “In Canada, it has been estimated that Boomers stand to inherit $1 trillion over the next 20 years.”

Though the actual inherited amount is acknowledged to be variable and dependent on market fluctuations, it is big enough for many nonprofits to see planned giving, bequests, and other end-of-life gifts seem as a beacon of steady funding in a turbulent sea of grants and a shrinking donor base.

But is planned giving the right strategy for your organization? Whether you answered yes or no, read on — you may be surprised.

Four myths and misconceptions nonprofits may have about planned giving

1. The only people who give bequests to nonprofits are wealthy dowager-types.

“It’s helpful to lose that stereotype,” says Natasha van Bentum of Give Green Canada, a BC-based national project that promotes gift planning as a solution to long-term funding concerns. “The typical legacy donor tends to be fairly quiet; they don’t like to have a fuss made; they’re not flamboyant.”

“The textbook approach says that you shouldn’t have a planned giving program unless you have major donors,” says Bonnie Sutherland, executive director of the Nova Scotia Nature Trust in Halifax, NS. “But we have people who are $30-a-year givers who have left bequests for us. You don’t have to have major givers.”

2. You need to hire planned giving professionals to set up a program. We don’t have that kind of money!

“A lot of groups think you need an in-house expert,” says van Bentum, who notes that you can start small: “You can at least put the message in your materials that you welcome legacy gifts.”

“We don’t have staff dedicated to planned giving but we are getting the word out,” says Sutherland. “We have a newsletter that goes out once a year and we try to always include a story that’s planned giving-related, like someone who’s given a bequest or a gift of land. We also did a simple brochure and on every donation form we send, we have check boxes: one about planned giving and the other asking if we’ve been included in their will, then we follow up.”

3. Planning giving is a lot of work now for a far-off gain.

While your nonprofit may not see immediate gain for your planned giving program, taking the time to build that relationship can add value now. For example, a donor who knows their legacy is tied to your organization may come to see you more as family than as an institution; this could even lead to an increase in donations exclusive of their bequest.

Even if you have one donor who mentions that your nonprofit is named in their will, you can build on it now. Van Bentum suggests starting an expectancy file: “Make a note of the conversation and start a file. If you keep accurate records, it’s acceptable record-keeping for planning, for example, ‘We have $150,000 in expectancies.'”

4. “Aw, shucks. Nobody’s going to leave a bequest to our little organization.”

This misconception can indicate something fixable, like a lack of organizational confidence. If all you need is a confidence-boost before you start welcoming planned gifts, one way to jump-start it is to update the testimonials on your website and communications materials: what new stories do you have to tell? How much impact have you had? Are you still needed in your community? If yes, get over your insecurities and start cultivating donors who are as passionate as you are.

However, your reluctance to solicit planned gifts could also be a telling revelation of how much faith you have in the overall viability of your nonprofit and its cause. If this is the case, you may need to look carefully at where you see your organization in the next few years before you consider a gift-planning program.

The elephants in the room: death and money

The phrases legacy planning and planned giving are pleasantly neutral but at their core, they are about death, the universal conversation-stopper, and, for an added blast of awkwardness, they are also about money, which is still a taboo topic for most people.

Whether you want to start a comprehensive gift-planning program or whether you just want to make the suggestion at the bottom of a brochure, you need to understand what issues can come into play from your donor’s perspective.

1. Almost nobody wants to think about, never mind plan for, their own death.

We are all going to die and while we hope it will be at the end of a long, happy life, there are no guarantees: that’s the first elephant in the room.

The second elephant is planning what positive impact our life and death can have, and that has a huge philosophical question at its base: why am I here? That question, however, is also part of your nonprofit’s DNA, so before asking to be part of a donor’s legacy, consider your organization’s legacy and let it inform your approach. It may not take away the fundamental unease around the topic, but it can help you make a meaningful link to a donor who shares your values.

2. People can be skittish about their money.

“We often express our emotions through our handling of money,” says Rhonda Katz, a family therapist in Toronto, Ont., who has lectured and written about legacy planning and families. “Money brings about three reactions: denial, ambiguity and avoidance. Denial says: “I don’t have to think about this now; it’ll never happen to me.” Ambiguity means that you’re not clear with yourself and others around you about what you want. And avoiders look to someone else to handle a crisis when it arises — and while a crisis is a great motivator, it’s not a great place to start from.”

3. Family politics about inheritances can be complicated.

There’s a reason why so many gift planning experts describe the ideal legacy donor as widowed, single or childless: families have expectations and strong feelings about what should come to them after the death of a relative.

“Anytime you ask about a financial commitment, there are always emotions involved,” says Katz. “Parents can help to prevent conflicts by finding as fair a solution as they can and announcing it early. It’s important that it not be a surprise to their heirs.”

Read her article about how parents can tell heirs about a charitable bequest for more information.

The six basics of gift planning

1. Do some informal research first.

It doesn’t have to be complicated: ask your board members for a connection to a financial planner and ask them to donate time for a working lunch to cover the basics of tax benefits and estate planning — and ask them later to vet any gift-planning brochures or materials you develop. Don’t reinvent the wheel: check other nonprofits’ websites to see how they address planned giving; what kind of language they use and what types of gifts they have received.

Give Green Canada, in conjunction with Royal Roads University, offers a free learning module and toolkit about planned giving. Here is the Give Green main page: . The heart of the Give Green toolkit is Unit 6: Bequests, which offers templates, brochure samples, a step-by-step chart for processing bequests and much more.

2. Make sure your demographics and your mission suit planned giving.

“If 99% of your donor base is under 21, then it might not be for you,” says van Bentum. “Review your database: do you have more than 10, 15 or 20% over 50? Is there a sub-segment of those over 70-75? Is the nonprofit working on an issue that will be around in the next five to ten years?”

3. Don’t try to be a financial planner.

Diane MacDonald, executive director of the Canadian Association of Gift Planners (CAGP) in Ottawa notes that there are numerous ways a donor can leave a gift, each with its own tax benefits, such as: a bequest; life insurance; real estate; residual interest; cash and securities; RRSPs and RRIFs; charitable remainder of trust and annuities. The financial planning field is vast and beyond the scope of most nonprofits — nor do you want to be liable for any tax advice you give. Always refer donors to a financial advisor or planner.

The CAGP offers the Leave A Legacy Program for Canadians looking to make planned gifts and offers a directory of financial advisors who are CAGP members. Individuals who are involved in gift planning for registered charitable organizations can also join.

4. Don’t underestimate the value of a legacy story.

Through planned giving people are often able to do more than they can do in their lifetime; let your community of donors and supporters know that. “We inherited an amazing life insurance policy that allowed us to save the biggest piece of land in our history and set up an endowment fund,” says Sutherland. “Once you get that first gift, you can share that story to attract other gifts. Then there’s a snowball effect.”

5. Have a plan to formally recognize legacy givers.

“We created the Nature Trust Legacy Circle, a list that goes in our annual newsletter,” says Sutherland. “Every two years we honour those who’ve given a legacy gift in a celebration. In addition to planned gifts, we also recognize people who give gifts of land as part of our legacy circle.”

6. Consider the downside of a gift.

“Think through ahead of time what could be the downside of taking the gift,” says Sutherland. “As a charity you need to think about what could go wrong with a well-intentioned gift. We did own a house temporarily but we learned that you could be on the hook for a lot of expenses, like when the pipes froze. There needs to be a financial plan that addresses the liability issues. I have heard horror stories from other charities that got stuck with a house that ate up resources.”

Final thoughts

By including planned giving in your overall fund-development strategy, you’ll be able to build and diversity your funding streams — and it doesn’t take a lot of time and effort to get started, even if you’re a small organization. As MacDonald affirms, “Receiving one legacy gift can provide a charity with long-term resources, enabling a renewed focus on their charitable mission. It is worth taking the time to speak to donors about considering a planned gift.”

Benita Aalto is a writer and communications consultant with extensive experience in corporate communications as well as in print and broadcast journalism. She has been a featured guest on TVO, CTV, CBC Newsworld, and CBC Radio, among others.

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