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[ASK AN EXPERT] Who are the Best Prospects for Legacy Gifts?

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Our Ask An Expert series features real questions answered by Claire Axelrad, J.D., CFRE, our very own Fundraising Coach, also known as Charity Clairity.

Today’s question comes from a nonprofit leader who needs advice on who the best prospects are to ask for legacy gifts.

Dear Charity Clairity,

My board wants us to develop a legacy giving program. But we don’t have a lot of major annual donors and don’t know many rich people. Are these are best prospects and, if so, should we even bother investing in a legacy program? 

No Rockefellers Here

Dear No Rockefellers,

It’s a myth that legacy gifts must come from rich people. The truth is anyone can leave a legacy. And if your nonprofit has been around for 10+ years, it’s your responsibility to do whatever you can to assure you’ll be around for the long haul. 

Just because you have few major annual donors… or because you’ve never received a legacy gift to-date… these are not reasons to conclude you have no legacy giving potential. I always suggest focusing on your most loyal constituents. This may be those who give to you religiously, or even those who don’t make cash gifts but who give their time as volunteers.

To prove these folks have real potential for you, let me describe a few of the legacy gifts that came to some of the charities with which I worked during my career:

  • $10,000 from a small monthly donor who named us beneficiary of their life insurance.
  • $250,000 from a career teacher who was a long-time volunteer; never a cash donor.
  • $1 million+ home from a home care client.

When people are committed to you, and share the values you enact, it should be no surprise they might willingly consider a legacy gift that will perpetuate these values. You just need to let them know you accept and welcome these gifts, and it would be your honor to partner with them to achieve the outcomes you both desire.

I recently happened on this from the team at Gift Planning Development, who work with clients to help them make the case for investing in a planned giving program. They suggest this formula for calculating your legacy giving potential.

  1. Determine your total number of active donors in the last 7-10 years 
  2. Find those who’ve been most loyal over time20% of active donors should fall into this category (i.e., give consistently year over year; make multiple gifts in the course of a year; commit to recurring giving) 
  3. Recognize 30% of loyal donors will be open to a conversation about legacy giving 
  4. Of those you speak with, 30% should make a commitment 
  5. The national average bequest is $78,630 

What does this look like in practice? 

Let’s assume you have 2,500 active donors in the last 7-10 years 

  • 20% loyal donors = 500 loyal donors 
  • 30% of loyal donors = 150 open to PG conversations 
  • 30% make a commitment = 45 planned gifts 
  • 45 x $50,000 (National average bequest) = $2,250,000 potential for 2,500 active donors 

Also, here’s an inspiring piece of data recently reported by the Chronicle of Philanthropy: Based on average bequest size, you only need 12 to 13 donors making a provision for your organization in their will to reap $1 million.

It’s a numbers game, so a broad-based approach makes a whole lot of sense. People of all ages and income levels can, and do, leave bequests. But they won’t do so unless you let them know you need them and value them. And this means you have to ask.

I hope this helps you get started!

— Charity Clairity

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