(Part 1 of 2 commentaries)

by Robert I. Evans & Avrum D. Lapin

Fact: approximately 8% of all charitable giving in the U.S. in 2008 ($22.7 billion) came in the form of testamentary gifts, according to Giving USA. This represents significantly more than all giving by business/corporate sources and almost as much as foundations provided.

Too many Jewish nonprofits are yet to recognize the importance of developing a formal planned giving program, through which donors can make significant gifts to support a host of purposes, ranging from programmatic issues to many different types of positions or even unrestricted endowments.

We believe that no fundraising effort is complete today without a planned giving component. In saying this, we underscore that testamentary gifts come in many ways, ranging from wills, trusts, estates, bequests, and insurance policies to many different types of annuities.

Establishing a planned giving program is especially timely, even as the economic climate appears to be improving. Today, any Jewish nonprofit organization that seeks a diversified way to offer their donors resources to provide meaningful gifts to their organization must pursue the development of a comprehensive planned giving effort. But before venturing into the world of planned giving, Jewish nonprofit leaders should take several critical steps. One important step is to secure the services of an experienced consultant to help create a viable planned giving program along with a qualified investment firm that best meets the needs of the organization and which can serve as the resource for important financial and other information.

Key to moving ahead is to create a committee of the agency’s Board that will oversee the program and provide volunteer resources that are critical. Members of the planned giving committee should not be limited to “experts;” rather, the committee should include donors who will advocate to others for making their own planned gifts because they have already set the pace by taking the appropriate steps for testamentary commitments.

As always, nonprofit leaders must do their due diligence to find the investment firm that can be the best asset and complement organizational needs and wishes. Current and potential donors must be assured that you are conducting your financial planning wisely and with full disclosure. You must determine what works best for your organization. Noticeable differences include:

• some financial firms offer full tax reporting services for donors;
• some firms provide tax reporting but cannot offer tax advice;
• some firms have large pools of annuities enabling investments to be more likely to meet projections on investment returns;
• certain investment firms conduct their business with the nonprofit and not the individual donor as the primary customer;
• some firms might not be licensed to practice in all 50 states, a concern if you draw donors from across the United States.

These policies can vary depending on the specific firm and further demonstrate the need to research a variety of firms before choosing one to administer your nonprofit’s program.

Once you have chosen professional resources to help create and administer your planned giving program, develop a schedule that includes seminars to highlight the variety of giving options that will be made available to your constituency and regular mailings (either by “snail mail” or email). Properly educate your donor base so that they realize the options they now have to make a lasting impression on your nonprofit, without necessarily making an immediate cash gift. This also tells your constituency that you are making the effort to explore diverse opportunities to position your organization for financial stability and that you are around for the long term.

Earlier this month, Crescendo, an often-used planned giving software and consulting resource, sponsored a major two-day seminar in Orlando, conducted for fundraising professionals interested in addressing innovative planned giving approaches. Of the approximately 330 attendees, fewer than 10 appeared to have represented Jewish non-profits!

Highlighted at the conference were several recommendations that we are pleased to share:

• using email is an important way to present timely information to potential planned giving donors and they can be either weekly, monthly, quarterly or less frequently but they serve to get your organization in front of donors appropriately;
• 90% of planned gifts come in the form of bequests but 80% of all bequests are unknown to the recipient organizations, thereby suggesting the importance of building all types of relationships with all donors;
• the best planned giving prospects are loyal and current donors, especially those who have made annual gifts for 10 consecutive years;
• the most likely planned gift donors are between their late 40’s and late 50’s but charitable gift annuity donors are likely to be in their mid 70’s. (Our next article in eJewish Philanthropy will focus on annuities.)

We would like to hear from you about your agency’s experiences in planned giving. Have you established or grown your program through the recent months and years? Have your donors embraced your program? Please share your thoughts. 

Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group, of suburban Philadelphia, and are frequent contributors to eJewishphilanthropy.com. EHL Consulting works with dozens of non-profits on fundraising, strategic planning, and non-profit business practices. Become a fan of The EHL Consulting Group on Facebook.