Most ministries and foundations that we talk to are in a quandary about the “right” communication with their donor/partners. They want to talk to them about planned giving, but they feel that they need to concentrate on current giving. Often they lack the confidence in talking about planned giving.
Whether it is a hospital, university or inner city ministry, they all face the same dilemmas:
1. Annual giving is always a challenge and always goes down during a recession
2. The need for services is constantly going up
3. If they have an endowment, income is down
How do ministries, non-profits or foundations overcome these common and sometimes detrimental problems? Below are the key benefits to planned giving that should be considered within your organization.
1. Relieve Pressure on Annual Fund
2. Fund Needed Projects
3. Build Endowment to the
1. Can reposition assets
2. Can avoid many taxes
3. Can achieve many income tax
4. Can guarantee income for life
5. Can increase amount of legacy to heirs and increase gifts
The internal obstacles to incorporating planned giving in non-profits we typically see are: inadequate budgets, lack of board support, ineffective tools, too little time and short term focus.
In my experience, the boards of many non-profits do not understand the value of planned giving and building relationships with key donors and do not prioritize gift planning in the charity’s budget. They fail to realize that planned giving benefits both the non-profit and the donor. With the surge in baby boomers entering retirement, most non-profits use ineffective tools to communicate with their donors. Baby boomers don’t respond to direct mail, and hate being called and won’t give via the internet. They only want face-to-face solicitation that is the most expensive method of raising money.
In addition, the staff at most non-profits do not have enough time to reach out to potential planned giving candidates and if they do they may not have the expertise to help them. Most donors face information overload and have developed methods allocating less time to each input and blocking reception whenever possible. They are frankly frustrated that every time a charity calls it is about a gift!
It is important that a development officer for a charity understand what a donor worries about:
• 88.3% of donors with wealth over a million dollars is very concerned about losing their wealth.
• They are concerned about living longer and what that will cost them.
• They are concerned about health care and the mystery of how much Medicare will cover in the future.
• 81% are overly concerned about estate taxes, and 77% are concerned about capital gains taxes.
• 79% are concerned about how and what to give their heirs.
• Only 27% are concerned about their gifts to charity
The most important question that a charity should ask is how to bring the challenges of the charity and the Donor concerns together. A balanced approach is a way to create a deeper bond with the donor and build a relationship that is based on satisfying their needs while at the same time benefiting the charity. Planned giving helps a donor by increasing potential income, reducing significantly their taxes, potentially increasing the amount to heirs, while at the same time increasing dramatically the amount available for charitable causes. It ties the Donor to the non-profit by creating ownership. Donors who have created a sophisticated estate plan with planned giving as a core strategy give significantly more of their income annually. Donors, who are helped by the charity in doing a sophisticated plan, will always reward that charity.
In summary, using a balanced approach with planned giving education and assistance should always be donor-centric, cost effective, time efficient, and sustainable.
By Joe Sturniolo
Christian Family Legacy and Wealth Planning
Joe believes that stronger families are the vehicle God uses to bring
about significant impact for His Kingdom.