William Clay Tucker, CAP, CMFC,CRPS
Myth:Planned giving isn’t important.Most of our wealth is in cash.
(i.e., Cash is king.)
Fact:Only 5% of this nation’s wealth is in cash. That’s why it’s so hard to
raise cash gifts.
Fact:The typical planned giving target is 200 times the donor's largest
annual fund [cash] gift.
Fact:Donors find they can become more generous with non-cash gifts because of additional tax
benefits.
Myth:We are not ready for planned
giving.
Fact:If you are a non-profit, you are ready. Even organizations less than 8 years
old and without a structured program are soliciting planned gifts.
Fact:If you are holding off because
you don’t yet have a formal planned giving "program," you
are missing donors who are making gift decisions today.
Fact:Your organization can accept
gifts of appreciated assets, bequests and life insurance today, without any special arrangements with your
business office.
Fact:Other gifts are more complex,
but you can partner with professionals who can help, such
as banks and community foundations.
Fact:Let your prospects know that you’re open for business – or
watch the best gifts keep going elsewhere.
Myth:It takes too long. We need the
cash now.
Fact:The average time from inception to maturity for a planned gift is 7-10 years — only a few years
longer than most campaign pledge periods.
Fact:Although most planned gifts are deferred, some provide current
cash.
Fact:One reason cash is in such short
supply in many institutions is that they have little or no
endowment. Planned gifts can build an endowment.
Fact:By limiting yourself to immediate
gifts, you are excluding a vast constituency of prospects who may only be able to give a large
gift in their will.
Fact:If you are scrambling to raise
cash today, it's because, in part, your organization did not pursue planned gifts 5-10 years ago.
Fact:
Planned Giving =Proactive Planning
Myth:Planned giving is complex,
expensive and time consuming.
Fact:It can be as simple or as complex
as you want it to be.You can start simple with a
bequest program.
Fact:Even a simple, unattended
program can raise significant funds.
Advice:Don’t be penny wise and pound foolish… one can easily give up $500,000 in bequests to save
$3,000 in their budget. Balance cost with value and return on
investment.
Advice:Within the next 15 years, over 6
trillion dollars will be passed from one generation to the next. Do not leave gifts on the table or forfeit them to another charity.
Myth:Planned gifts compete with
major gifts.
Fact:Most planned giving donors are not
prospects for large major gifts. Many fundraisers are nervous about
pursuing planned gifts because they think they'll lose major gifts.
Fact:Planned giving donors are the
"millionaires-next-door" in your constituency, flying under the
radar of your prospect identification systems.
Fact:Planned giving often gives donors financial benefits, but it isn’t the number one reason they make
gifts.
Fact:They have different motivations
than those major gift donors who seek recognition by having their
names on big projects or buildings at your organization.
Fact:A blended gift, i.e., a planned gift
structured into an outright gift of a major donor can often increase
that donor's total gift.
Myth:Planned gifts are a distraction
in campaigns.
Fact:They provide up to 30% or more of
comprehensive campaign totals. Reaches the “hidden
constituency”… your most loyal donors.
Fact:Capital campaigns focus on 5% or
less of the donor base (major donor prospects). The major gifts
donor pool and deferred gifts donor pool are not the same.
A powerful start:Bequests, bequests, bequests.
Fact:42% of Americans die
without a will.*
*PPP Survey
Fact:Only 1 in 3 donors told charity
about their bequest in advance.*
*PPP Survey
Fact:More than 2/3 who made a
planned gift also made a cash gift.*
*PPP Survey
Fact:Average age when a
will is created is 44.*
*PPP Survey
Fact:34% of donors learned about
bequests from their charities.*
*PPP Survey
Fact:21% of bequest donors had no
prior affiliation with the charity.*
*PPP Survey
Fact:Additional
non-survey information:75-80% of all planned gifts
are bequests.
Fact:The average bequest is
$20,000 - $70,000.
Fact:A small percentage of donors
change the commitment.
Fact:Bequests are easy to market: they
are the gift that costs “nothing during lifetime.”
That is, a bequest does not affect one’s cash flow or lifestyle.
Fact:Other charities are educating your donors and closing planned gifts –
shouldn’t you?
Who are these planned giving prospects?
Myth:Planned giving donors are
wealthy.
Fact:Donors at all financial levels take
advantage of planned gifts.
Fact:Your best prospects are your most loyal donors, not necessarily your
wealthiest.
Fact:Wealth screening and demographic criteria alone are poor predictors of propensity to make a planned
gift. The highest predictor is
institutional loyalty.
Fact:Most deferred gifts are made by those who do not benefit from
estate tax deductions.
Fact:Most planned gift donors give
small gifts year after year rather than larger donations. (69% of planned giving donors give less
than $500 per year and are unrated prospects.)
Fact:The highest predictor of a donor's propensity to make a planned gift
is institutional loyalty, not how much money they have.
Fact:Households engaged in planned
giving have a higher rate of participation in charitable giving,
as well as higher average contributions than households not
engaged in planned giving.
Myth:Planned givingdonors are old.
Fact:43% of bequests and 34% of
charitable remainder trusts (CRTs) are created by individuals younger than 55. 15% of planned gifts are
by those younger than 45.
Fact:The age at which people begin
financial planning for themselves and their families is becoming lower every year – let the option of planned giving
be known to your constituencies early.
Fact:While 69% of donors change their
wills, only 25% change a gift in their wills.
Fact:Ages Bequests CRTs18-34 3% 6%35-44 14% 10%45-54 26% 18%55-64 22% 20%65-74 20% 23%75+ 15% 24%Mean 58% 62%
Myth:People give to get a tax break.
Fact:A tax break makes it easier to give and easier to give larger gifts, but
people give for other reasons.
Fact:No. 1 Reason?
They are asked or presented the opportunity to give.
Yes, someone asked them.
Fact:The other four reasons...
Compassion for those in need They personally believe in the cause
They are affected by the cause To give back to their community
Planned giving marketing.
Myth:Planned giving prospects are
not online.
Fact:Your website is the
first place your prospectswill go to find out about you.
Fact:Adults 55+ are the fastest growing sector of the PC purchasing public. Seniors are getting "younger" – the
first baby boomer turned 60 in 2006.
Fact:40% of all U.S. adults over the age
of 50 – including 24% of those over 65 – use a computer at home.
Fact:70% of seniors who own a
computer and 14 million North Americans age 50+ use the Internet on a regular basis.
Fact:65% of Americans age 55+ who are online use the Internet for research
and investing.
Fact:Seniors are 27% more inclined to invest online than their younger
counterparts. A majority have invested online at least once over
the last year.
Fact:Internet users age 50+ are highly
educated, affluent when compared to the general population, and
purchase more in dollar amount online than younger surfers…
Fact:75% have a college-level
education. 45% earn over $75,000 a year. 50% have investment
portfolios worth over $100,000. These figures could be higher for
your constituency.
Myth:People read planned giving
newsletters.
Fact:Newsletters worked in the 60’s. Today,
they rarely get read. Personalized letters, postcards, display ads and
websites have a greater impact.Personal visits are a must.
Myth:Email blasts are a cheap way to
promote planned gifts.
Fact:In 1999, this was a great idea.
Times have changed. Most of your emails won’t get read.
Fact:E-cards or e-mailing is a great idea
for birthday greetings, but not planned giving... Americans read their email with their fingers on
the delete key.
Fact:Your e-newsletters and planned
giving e-cards will not get read for the same reasons your newsletters won't. Many e-marketing pieces get
spammed out.
Fact:Even if your prospects have opted-in to hear from you, they will soon
ignore your emails. You can easily alienate your
prospects with mass emails and e-marketing.
Myth:Planned giving websites close
planned gifts.
Fact:Handshakes close planned gifts. People
give to people, not organizations.It’s important to have a planned giving website… but do not rely on it to work
on its own.
In Closing...Annual giving is important, and urgent.
Planned giving is also important, and proactive. Our endowment is like a
retirement account. If we do not plan today for tomorrow, we may be in crisis tomorrow, which could jeopardize our
programs and services.