Planned Gifts Guide: Tap into the Top Level of the Donor Pyramid

Last updated: December 21, 2020

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When was the last time you evaluated your donor pyramid? If it’s been a while, then consider taking it out again and analyzing what kind of gaps might lie in your current strategy.

For instance, are you fully utilizing the top of your pyramid—planned giving? If you’re not currently making use of this type of fundraising, then allow your friends at iWave to show how you can tap into planned giving to propel your nonprofit forward.

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What Is Planned Giving?

In order to determine if a planned giving program is right for your nonprofit, you first need to have a complete understanding of what it entails. Simply put, a planned gift is a donation set for an unspecified future date. Usually these gifts are received after the donor has passed away and are bequeathed through a will or trust.

Planned giving is at the top of your donor pyramid, so while you may not have many planned donors, you don’t want to overlook their benefits. Their contributions can enact significant change for your nonprofit.

A planned gift program, often referred to as a “legacy program,” is a nonprofit’s way of cultivating and stewarding donors. This program will help to not only uncover potential new supporters but will also ensure the donation process goes smoothly and that everyone is well-informed about the specifics.

Planned Giving Key Terms

Since planned giving is such a specialized type of giving, there are specific terms you will hear often. Before you dive into the specifics of this type of fundraising, let us take you through the common vocabulary.

Beneficiary and Secondary Beneficiary

A beneficiary is a person or organization who has been legally appointed to receive a funds as laid out within a will. Once the primary beneficiary passes away, the secondary beneficiary will receive the remaining benefits.

For example, a donor can choose to leave their estate to your organization, and, upon their passing, you will receive this gift. However, they may also choose to leave their estate to their child with your nonprofit listed as the secondary beneficiary. In that case, your nonprofit receives the gift after both the donor and the beneficiary have passed on.

Bequest Intention

Donors are not obligated to notify you of a bequest and instead can just write you into their wills, and you’ll receive a gift upon their passing. However, unannounced planned giving makes prospects hard to identify since you’re not able to figure out how many donors are a part of your planned giving program.

You can always ask planned donors for a bequest intention, which is a written promise that your organization will be included in the will. This can be a simple promise or have more specific details such as percentage amount.

Charitable Bequest

Charitable bequests are the type of bequests nonprofits receive. These are donations via trust, will, or estate that are given to nonprofits like yours. These typically take the form of a specific gift amount, a remainder amount, or a percentage. It can also be a stock donation.

Charitable Gift Annuity

A charitable gift annuity is a very interesting type of planned giving and typically involves the following steps:

  1. Donor gifts a large donation amount
  2. The nonprofit pays the donor a set annual income from that sum
  3. The pay period ends upon the passing of the donor
  4. The nonprofit keeps the remaining funds

This type of planned giving isn’t seen very often but is another option you may want to explore. Providing prospects with various donation avenues ensures donor cultivation.

Charitable Remainder Trust

A charitable remainder trust is when the remainder of a trust is gifted to a nonprofit after the terms of the trust are complete. This usually occurs when other beneficiaries noted in the trust have passed as well. In this scenario, cultivating a strong relationship and strong lines of communication with the main benefactor are key.

Planned Giving Best Practices 

  1. Build a Strong Team

As with any fundraising effort, you need to have a solid team behind you. Due to the unique and highly sensitive nature of planned giving, you’ll need legal experts by your side to ensure all the proper channels are being utilized.

Since discussing after life plans is a very delicate subject, you want to choose team members with experience handling sensitive matters.

  1. Assemble an Advisory Committee

Similar to your planned giving team, your advisory committee is comprised of employees with legal or planned giving experience. This committee may include roles such as lawyer, financial planner, and realtor.

You can turn to these members at any point in the planned giving process to help guide you along the way and address any concerns that arise.

  1. Consider Your Brand

The way your program is being presented to potential donors makes a big difference. Planned giving isn’t exactly a catchy name, but a Legacy Program conveys the longevity of a donor’s impact.

Ask them how they want to be remembered and what they want their imprint on the community to be, even if they’re not physically there to change it.

  1. Identify Prospects

Your program will be highly effective if you run consistent wealth screenings to generate a solid picture of who has the ability to support you. There are some key traits that set planned givers apart such as age, stock ownership, and land ownership.

Additionally, look for your hidden gems (something iWave’s insights can identify for you)—the people you may consider unconventional choices. iWave’s insights can also identify who may be a viable planned giving candidate later on, despite their current ineligibility.

  1. Search Based on Age

As noted above, it’s a good idea to include donor age in your search. Middle-aged to older donors will be your target audience since they are more likely to be considering their lifetime legacy.

Most younger donors are not considering their wills and may not even have one in place, so they won’t be as receptive to taking this donation avenue.

Statistics have shown that planned gifts are often established when donors write their first will. Believe it or not, the average age that donors write their first will is just 44 years old—an ideal target age for your search.

  1. Involve Your Board

Your board members should be highly connected to the community, making them a vital part to the planned giving process. You can go to board members initially to ask if they may be interested in joining your legacy program. If they agree, collect testimonials to use as inspiration for future donors.

Even if becoming a planned donor isn’t the right course of action for a board member, you can leverage their connections to build up your program. Ask if they know someone with an affinity for your cause who may be interested in becoming a planned giver.

By having your board member make an introduction, you’ll forge a personal connection right from the start.

  1. Start with Bequests

Planned giving has its own unique processes due to the boundaries legal documents set. Therefore, you should begin with the simplest form of planned giving: bequests. Bequests are straightforward gifts left within a will and have fewer legal procedures.

Once your team has experience with these types of gifts you can move on to more complex planned gifts with the confidence you’ll be able to tackle any challenges they present.

  1. Communicate

As with all types of fundraising strategies, communication with your audience is key. Planned giving presents its own unique challenge in that there is a lot of education that needs to happen. The general public may not be aware of what planned giving is, so you’ll have to start a dialogue with prospects to get the ball rolling.

Communication is especially vital due to how sensitive the nature of planned giving is. The fact is donors cannot provide their planned gift until they have passed on. Always be cognizant of what a tough time this would be for their families—not just the benefits it would have for your nonprofit.

  1. Update Existing Material

From brochures and pamphlets to your website and social media accounts, you have a lot of marketing materials out there. After introducing your planned giving program, include it in your promotional materials too. Even if it’s just small blurb in your newsletter or an entire paragraph on a webpage, exposure and easy access to giving makes a huge difference for supporters.

  1. Market in New Ways

Even though you should make note of your legacy program in existing documents, you always want to introduce this program in fun and new ways. Make sure this program sounds unique and attracts an audience.

Use colorful language and creative visuals when it comes to marketing strategies, always keeping your target donor audience in mind. A “fun” tone may not always be appropriate due to the sensitivity of the strategy. Always test out marketing materials with a small focus group first.

  1. Hold Educational Meetings

As noted before, education is key when it comes to planned giving. Host events that interested prospects can attend to learn more about your legacy program. It’s important that first meetings with any prospects aren’t overly educational, so the information doesn’t overwhelm instead of inform.

With these meetings, you can start the education process incrementally, slowly introducing more information over a series of subsequent events. These events can be in person with refreshments provided or online to extend your audience pool.

  1. Emphasize Legacy

Many organizations refer to their planned giving program as a legacy program due to their positive focus on the future. This is how we cultivate donors!

Make sure you’re placing an emphasis on the strong impact prospects can have on your organization for many years to come. Additionally, remind donors how their legacy will live on through the programs they supported.

  1. Gather Testimonials

As previously mentioned, you’ll want to get testimonials from board members who enter the program. Testimonials are an invaluable asset, and you should also collect them from anyone else who decides to become a member. The more firsthand accounts prospects can hear, the more confident they will feel in choosing your specific organization for their planned gift.

  1. Start a Dialogue

Once again, planned giving programs invite a lot of questions. Keep your communication channels open at all times. Provide each prospect with a phone number or email where they can reach an experienced member of your team. This team member must be organized and available enough to assist with all their questions and needs.

  1. Give Donors the Power

One of the unique aspects of planned giving is that donors can choose what programs they would like to support with their gift. Often, this information is laid out in their planned giving paperwork and will reflect their own personal interests and passions.

Donors can also choose to donate their gift to the establishment of a new program. Make sure to emphasize unique options such as these when speaking with planned giving prospects.

How iWave Can Jumpstart Your Planned Giving Program

Now that you’ve learned more about planned giving and how tapping into this program can benefit your nonprofit, are you ready to start your own program? Armed with these best practices, you’re off to a great start. Just let our team at iWave help you take your planned giving program to the next level.

Our fundraising software scans billions of datapoints to identify the right supporters for your specific cause and program. We’ll analyze key indicators such as land ownership and age to help you find prospective future donors. We’ll also provide several unique insights to ensure you find your hidden gems.

iWave Screening also delivers a Planned Giving Score for every individual screened. This feature allow nonprofits to:

  • generate a score for a prospect based on a number of criteria, some of which include age, affinity, propensity

  • identify and target individuals who would be excellent candidates for planned giving

  • provide supplemental analytics if recency-frequency-monetary (RFM) data is provided

Don’t just take our word for it though. See us in action today by scheduling a free demo or fundraising assessment. We’re excited to show you all the ways iWave can take your nonprofit to the next level.

Written by Admin

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