Planned Giving Must Be A Critical Component of Fundraising Efforts

by Robert I. Evans and Avrum D. Lapin

We have long contended that planned giving must be a component in every non-profit’s fundraising repertoire, yet today we still see a level of reluctance to address this important philanthropic priority by non-profits of all ages, sizes, and areas of interest. Both professional and lay leaders have seemingly hesitated to discuss this topic as an organizational imperative or as a charitable option with donors. They believe it will not appeal to them and do not want to jeopardize, or worse, cannibalize an opportunity to secure an annual or even a capital contribution today. However, this is a mistake! Make no mistake: testamentary giving conversations serve to launch (or re-introduce) important giving opportunities and generally tantalize donor thinking.

In a webinar that EHL Consulting hosted last week as one of a series of such sessions for Jewish day schools, we heard expressions of concern over how to make planned giving sizzle. One development staff member from a prominent Jewish day school shared experiences in which donors even questioned the need for planned gifts in lieu of making an immediate gift.

As fundraising professionals, we acknowledge that donors usually want to see their gifts be put to use to address current concerns and to help meet immediate needs. However, if presented strategically, donors may better understand the importance of testamentary gifts, a gift that can keep an organization’s legacy secure and ensure that their organization would be decidedly less vulnerable in future times of economic or other difficulties.

With a steady decline in the U.S. death rate, the aging Jewish population has expanded. Generous donors to Jewish causes are looking for ways to make their charitable marks while many are also learning to live on financial resources that may be more limited or restricted due to their longevity as retirees. Planned gifts provide a number of ways to make charitable contributions that would meet their financial capabilities while also making a significant impact on an organization’s future.

Even with a decline in the mortality rate in America, we are curious as to why so many non-profits don’t incorporate Planned Giving into their organization’s plans, yet they spend countless hours and dollars on trying to attract corporate and business gifts. Nationally, the statistics are consistent year to year. In 2009, Giving USA reported that in terms of all giving throughout the year, more dollars come from testamentary support as from corporate contributions. In 2009, bequests accounted for 8% of all giving ($23.8 billion) while corporate dollars represented only $14.1 billion or 4%.

As a result, non-profit organizations should be proactive and take specific steps:

  • Begin by offering educational seminars to donors to display the mutual benefits that testamentary giving can have. We often suggest donors speak with a financial advisor to learn about their many giving options as this can help to clarify a number of issues that may cloud their judgment of why planned gifts may be a good avenue for them.
  • If it works with the business plan for the organization, encourage donors to support educational programs with a Charitable Gift Annuity program and other efforts that can ultimately return significant rewards to non-profits.
  • By asking constituents to consider testamentary gifts, you strengthen the fundraising profile of the non-profit, strengthening ALL giving.

Even with all the facts, some donors may still be skeptical of testamentary giving, contending that they will either want to make bequests to surviving spouses, children and grandchildren. Others express concerns about outliving their resources, especially as they live longer. Maybe it’s the inability to visualize the legacy of their lifelong efforts or to feel confidence that one’s wishes are being fulfilled once they are gone; there are clear reasons for donor apprehension. These are real and well-founded objections that non-profits can overcome but they need to consciously address them with donors.

To address this issue, we often recommend that our clients offer both restricted and unrestricted planned gifts, thereby enabling donors to select a specific area of interest to support in the long term. With this option, donors can pick an area that meets their charitable interests and help to sustain a particular program, service, or facility need in the future. Another creative strategy is to suggest donors make a two-pronged contribution, in which a portion of the gift is designated for current use while the balance is earmarked as a planned gift. This way, donors can see impact while also building confidence for the longer-term by making a difference for the constituencies of tomorrow.

Making a commitment to sustain a program reinforces every donor’s connection with the organizations they support, ensuring their legacy and securing their commitment to the vitality of the non-profit. And this holds for donors regardless of their levels of giving … ranging from the highest to the more modest levels of giving.

While planned giving may not seem “sexy” to donors, it is important to demonstrate that it can be and, most importantly, that it will enable the organization to advance its mission, provide opportunities to expand programs and activities and to ensure that the organization will continue to exist for the Jewish community of tomorrow. It is imperative that we tell our story and teach our values to the next generation of Jews, and an important part of our tradition and history is giving tzedekah and helping sustain our community for the future. Show your stakeholders that planned giving can make it happen for your non-profit and the Jewish community at large.

(Would you like to share some examples with us regarding planned giving approaches that have succeeded? We’d like to incorporate good examples in future reports on eJewish Philanthropy about planned giving approaches. Or do you have questions about planned giving?)

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 EHL Consulting works with dozens of nonprofits on fundraising, strategic planning, and non-profit business practices. Become a fan of The EHL Consulting Group on Facebook.