6 Interesting Facts about Planned Giving for Newbies

When my sister was in college at Ohio State, in the days before PowerPoint slides, she had a job attending lectures and taking notes for students who, for whatever reason, couldn’t get to the classes themselves. I had the privilege to attend the AHP Madison Institute last week, and as I consulted the schedule I was reminded of this system. I couldn't possibly recreate the entire experience of learning directly from some of the best and brightest in our industry, but I can try to give you the SparkNotes version.

I sharpened my pencil, and like a bull in a fundraising shop, plunged directly into one of the more complex topics in fundraising: planned giving. Learning new tricks as a middle-aged dog is not always easy, and certainly not when there is legalese involved.

Fortunately, I had a great teacher. Tim Logan, CFRE, FAHP, ACFRE, FCEP, has, in addition to an entire alphabet of certifications, more than 40 years of fundraising experience and more than 20 years in planned giving.

In no particular order, here are six useful things I learned about planned giving from Tim in Madison.

Talk about Legacy, Not Death

Few people want to talk about their own death. (Even writing the heading above made me cringe momentarily.) When broaching the topic of planned gifts, it’s much better to ask a prospective donor how they’d like to be remembered when they are gone. Another important thing to note is that the donor doesn’t have to pass away to make a planned gift for certain gift types, such as lead trusts and IRA rollovers.

Look for Repeat Donors

The single biggest predictor of a planned gift, other than age, is a donor’s frequency of annual gifts. Those who make repeat gifts, even small ones, make good planned giving prospects.

Use Family, Not Market, Language

Planned giving researcher Russell James reports that bequest decisions are fueled by oxytocin, the same hormone present in maternal-child bonding. Interact with prospective donors as you would a family member, with simple language and stories, and avoid business terms like contract and legal terminology. People may be happy about getting a tax benefit when they decide to donate, but they don’t decide to donate just to get a tax benefit.

The Future Is Female

A male born in 1958—squarely in the Baby Boomer generation—has a life expectancy of 67 years. A female the same age can expect to live until 73. In many cases, a heterosexual couple’s wealth will ultimately end up in the hands of the wife. Be sure she is involved in and comfortable with any arrangements made by her husband for bequests and other gifts that can be retracted, such as pension and life insurance beneficiaries.

Ask an Expert

The structure, tax implications, and execution of planned gifts are all complex. If you are not certain of the details, be sure to bring in someone on your team who is when the conversation with a donor gets serious.

Learn the Terminology

I’m going to take my own advice here and not try to explain the differences between trusts and bequests, revocable and irrevocable gifts, or charitable lead trusts and charitable remainder trusts. Instead, I’ll point you to this explanation and this one too.

How to Get Started

AHP members can watch Tim’s webinar about creating a planned giving marketing plan on demand.