This post comes from the Gravyty Fundraising Academy, a series that examines how fundraisers adapt and strategize to evolve what's possible through philanthropy.
Your guide for the Gravyty Fundraising Academy is Director of Customer Success, Lisa Alvezi. Lisa has worked with countless fundraisers across Higher Education, Health Care, and Nonprofit organizations to transform fundraising. As a former frontline fundraiser herself, her goal is to help you see better results from your fundraising efforts.
Who should you cultivate for a planned gift and when should you start the process?
Planned giving is an area of philanthropy that is uncomfortable for both the fundraiser and the prospective donor. It is fraught with concerns. “How old do you think I am?” “Discussing your death is bad luck,” and “My estate plans are too private to discuss” are common dilemmas. On the flip side, donors might say, “I never thought about leaving your organization in my estate plan until you asked. I am willing to support you through an estate gift.”
The perfect place to start? Donors who give consistently to your organization for over ten years or more. They have already demonstrated their affinity and philanthropic support to you. You are looking for consistency, not the amount of the gift. In analyzing the lifetime giving of realized estate gifts, those donors often gave small annual gifts with the bulk of their support coming from the estate gift. A big mistake to avoid is dismissing donors who give $50 or $100 per year. Those people may have the capacity to leave you a six-or-seven-figure estate gift.
Usually, a planned gift comes from someone you have been getting to know, qualifying, and cultivating over several years. It does not typically come from a sporadic donor whom you don’t know well that just popped up in a wealth screening as having capacity.
The “right” age for cultivating and soliciting an existing donor for a planned gift will vary depending on the individual’s situation. Generally, people in their 20s and 30s are not ready to think about estate planning, though recent world events are changing that. Typically, these people are paying off education loans, saving for a home, planning college education for their children, and perhaps taking care of aging parents. If they do any estate planning, it usually focuses on taking care of their spouse and children. However, it is an excellent time for a gift officer to establish and cultivate a relationship with donors in this age range.
By the time most people are in their 40s, they have established personal and professional lives. They might even start to think about planning for their retirement in terms of savings/investment plans, life insurance, and long-term care insurance. If you’ve been cultivating your donors since their 20s or 30s, you should have a pretty good handle on their situation – married, children/no children, profession, and homeownership. It would be best if you tailored your planned giving strategy based on the individual donor’s circumstances.
Couples with double income and no kids, who own their home and have professional or executive jobs will generally have a much higher disposable income and total assets.
Married couples with one salary and numerous children will probably not be as viable a planned giving prospect in their 40s. Their situation could change when they get older, but they are probably not the people I would choose to start with for a planned giving discussion.
Don’t dismiss someone because they “are too old” and already have their estate plans. This is another common error fundraisers make. Although a donor probably won’t go to the expense of having a lawyer rewrite the will, it is easy enough for a donor to change the beneficiaries in an investment account or a life insurance policy.
Another common scenario is that the death of a spouse will often change the surviving spouse's philanthropic focus. For example, a widow may decide it’s time to focus on her charitable priorities and reduce or stop giving to her deceased husband’s favorite charities. Or, the surviving spouse may wish to continue to support the charity that was so dear and set up a memorial gift. If you’ve been cultivating a relationship with these donors over the years, it’s crucial to understand how life events change their priorities.
If you’re looking to get serious about planned giving, here’s an indispensable tip: gift processors are a fantastic ally. They can see when a gift comes in from a revocable trust checking account. This is a flag that the donor has enough assets to set up an estate plan that limits the estate's tax consequences. Likewise, they will see when someone with power of attorney has taken over someone’s financial affairs, usually indicating failing health and perhaps diminished capacity.
Bottom Line: Start qualifying and cultivating donors in their 20s and 30s. Get to know them, their families, their interests during these decades. Although they probably aren’t focused on a planned gift at these ages, it’s a critical time for you to start gathering the intel you’ll need when they are ready to think about a will, retirement planning, or otherwise.
If you’d like to learn more about how artificial intelligence can empower your fundraising staff to act as 2-3x its size, personally reach new donors, and inspire giving at scale, click the button below and let's connect.