Did you know that bequest marketing produces the most ROI (return on investment) of any fundraising activity?
In fact, it’s “kind of off the charts” according to Tom Ahern.
He goes on to say that “While a good major gifts officer can bring in 10 to 20 times her salary, the average major gift is smaller than people assume — around $5,000.
However, the average U.S. charitable bequest is around $32,000.
The bad news is we lag behind other nations, especially the U.K. where the average bequest is $54,000, and Australia where it’s a whopping $200,000.
I wanted to know why, so I sent out a survey (crafted with the help of Tom Ahern and Russell James, J.D., Ph.D., CFP).
Here are the results I got back:
Survey Respondents (US/Canada)
Age of organization (years):
- Mean – 44.67
- Median – 35
- Mode – 10
- Range – 2 to 176
Last reported annual revenue:
- Mean – $4,417,569
- Median – $1,300,000
- Mode – $2,000,000
- Range – $30,000 to $85,000,000
Sample size: 367
Over the last year or two, about what percentage of your organization’s total fundraising and donor relations time and effort have been specifically focused on generating gifts in wills or other estate gifts?
- None: 43.9%
- 1%: 14.2%
- 2%: 8.3%
- 3%: 2.6%
- 5%: 16.8%
- 7%: 0.5%
- 10%: 7.8%
- 20%: 1.3%
- 30%: 1%
Over the last year or two, about what percentage of your organization’s total fundraising income has come from gifts in wills or other estate gifts?
- None: 47.4%
- 1%: 14.3%
- 2%: 3.9%
- 3%: 2.1%
- 4%: 0.5%
- 5%: 9.4%
- 7%: 0.8%
- 8%: 0.5%
- 10%: 8.1%
- 15%: 2.3%
- 17%: 0.8%
- 20%: 2.6%
- 25%: 1.6%
- 30%: 0.8%
- 50%: 1%
When was the last time you received a charitable bequest?
- Never: 28.7%
- More than 12 months ago: 26.4%
- 6-12 months ago: 11.1%
- 3-6 months ago: 10.6%
- 0-3 months ago: 23.3%
Was it expected?
- Yes: 34.4%
- No: 65.6%
Do you have a legacy giving society?
- Yes: 33.3%
- No: 66.7%
Do you have marketing material solely devoted to bequest giving?
- Yes: 28.7%
- No: 71.3%
Do you send a letter annually to donors, asking them to consider putting a gift in their wills?
- Yes: 18.1%
- No: 81.9%
Do you have marketing material that mentions IRA redesignation?
- Yes: 24%
- No: 76%
When you think about your organization’s fundraising activities, which of the following time periods is most important to your organization’s leadership?
- the next few months: 28.9%
- the next year: 34.4%
- the next few years: 27.9%
- the next 5-10 years: 8.3%
- longer than 10 years: 0.5%
This next question was a bit of a quiz.
How soon would you expect your first bequest to come in if you set up a bequest marketing program this year?
- same year: 15.5%
- 1-2 years from now: 25.6%
- 3-4 years from now: 20.9% (correct answer)
- 5 years from now: 24.8%
- 10 years from now: 13.2%
I asked Russell James, J.D., Ph.D., CFP what he thought of the data and he had this to say:
In a regression analysis predicting what percentage of an organization’s total fundraising income has come from gifts in wills or other estate gifts, important factors are:
- percentage spent on fundraising for these gifts (more the better)
- age of organizations (older is better)
- revenue size of organization (bigger is better)
- fundraising time horizon (longer horizon is better)
I thought time horizon would be more important, but it is a relatively weak predictor (p value is about .10 in a univariate regression).
Among organizations receiving any gifts from wills or estates, on average organizations receive an almost 50% greater share of gift income from such gifts than the share of total fundraising they devote to such fundraising. In other words, such organizations devote 4.56% of their fundraising budgets to estate gifts, but receive 6.74% of their total gift income from estate gifts. Thus, compared to other fundraising expenditure types, fundraising devoted to estate gifts may generate a substantially larger amount of income.
To sum things up:
- we don’t spend much time on bequests, so we don’t get many
- we don’t look too far into the future
- most organizations think bequests come quick or take a long time (where as the reality is somewhere in between)
If you didn’t participate in the survey, how does your organization compare to the data? Let me know in the comments below!