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The legal and tax components of planned gifts often seem so complicated that small nonprofits rule them out as a funding strategy. But ignoring planned giving could equate to ignoring new opportunities for major donors!

Plus resources and support services to demystify planned giving make it much simpler for even the smallest of nonprofits to incorporate them into their development plans and revenue strategies. Here are the basics you need to know about planned gifts and how to use them to boost your sustainability and increase your impact – both tomorrow and today.


planned giving


What is planned giving?

Any type of deferred giving from a donor is a “planned gift.” These include, but are not limited to, direct bequests (a donor puts your organization in her will for a set amount or percentage of her income upon her death), established pools or trusts of funding that send an annual gift your way based on returns (also called annuities), gifts from life insurance policies, and gifts from retirement funds.

They do not all depend on a donor’s death, either, but can rather be a source of thoughtful cooperation for donors that lack immediate cash resources to give you the size of gift they find most appropriate. For instance, gifts from the capital gains on stock transactions or real estate sales empower donors to direct would be tax payments to charity.

Planned giving trends

The Association of Fundraising Professionals reports that the time has “never been better” to incorporate a planned giving strategy into development plans, even for the smallest of nonprofits.

Why? Because our population is aging rapidly, and a large transfer of wealth is about to occur. More and more nonprofits are investing resources in planned giving as a result, with the ultimate goal of establishing endowments to cut their annual fundraising burden significantly and hence make them more sustainable.

Bequests – the planned gift miracle for nonprofits

Up to 80 percent of planned gifts are bequests. The good news is that these are super simple to transact, even for a one-person or all-volunteer nonprofit! Basically, the donor just needs to include language in his will that he wants a certain sum or percentage of his estate to go to a specific charity. The legal planning is nearly all on the donor as opposed to the charity itself. Sometimes charities don’t even know they are in particular wills and receive miraculous checks in the mail from estate managers!

How to integrate a bequest program into your organizational plan

  • You can set up a program in house, as in post on your website that bequests are a good way to help you if cash in hand at the moment is impossible, or if the donor wants to have a deeper impact. Most often, bequests are part of a dialogue with special volunteers or patrons to your organization that do want to give more and seek means to do so via conversations with you. It helps to have a simple pamphlet available to share with the donor prospect during your conversations.
  • Build a long term financial projection for your organization that includes an endowment and/or special capital needs of the future. Maybe you anticipate needing a good amount of money for a building renovation, or you can foresee how a special endowment to cut program costs for underserved community members permanently over time could enhance your mission and its impact in the community. Put that sustainable future into writing!
  • Include information about how you plan to recognize your bequest donors in your marketing materials. Since you won’t receive the gifts in their lifetime, you need a creative means of thanking them today for tomorrow. The means of doing this in universities, hospitals, and large nonprofits, is creating “legacy societies,” or special circles that include only planned giving donors. Those societies then have dinners or other events annually to honor those donors.

    You can apply this principle on a smaller scale, by honoring your bequest donors in your newsletter, on your website, or in a special press release or community-based interview. The key is to thank your donors and let them know upfront that they will be recognized.

Tips and resources to setup and manage planned giving

  • Create a manageable goal to get started. With board approval, set a realistic goal to obtain a specific number of bequests in a timeframe from a specific number of conversations (i.e., “I will talk to 10 donors about bequests and receive 2 bequests during our annual appeal this fall”).
  • Consult Leave a Legacy, a public awareness campaign that provides educational resources to nonprofits on how to include the proper bequest language in wills and even posters to inspire donor prospects to research bequests themselves.
  • You don’t have to spend much on marketing, but you do have to get the message out that you have a planned gift program. Take advantage of free advertising as much as possible! The Fundraising Authority shares low cost or no cost ways your small nonprofit can promote planned giving – the best being tried and true word of mouth and face to face visits.
  • Pro bono specialists can help you set up the legal and financial resources, as well as the program marketing, to make planned giving possible. Networks like LA Works or Idealist connect professionals that want to volunteer for good causes to specific projects of this sort.

In summary, don’t be afraid of planned giving, but rather think of it as a tool to enable your best patrons to help make you more sustainable going forward. Keep it simple by focusing on bequests to start, and gradually work in more complex planned giving strategies with resources for nonprofits and pro-bono professionals that won’t tax your limited resources!

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