If you are a regular reader of this blog or any fundraising blog for that matter, the subject of “Major Gifts” is one of the most common. From researching the best prospects to building the relationship to making the “Ask,” major gift actions are explored from every angle.
However, two of the largest potential major gifts types are rarely discussed, in fact, they are often alluded to at best.
So this raises two questions…
How can this be the case?
What are these two mysterious major gift types?
Let’s answer the second question first. The two major gift types are:
- Naming the Charity as the Beneficiary of Your IRA
- Naming the Charity in Your Will
We will go into more detail about these two key types after answering the first question.
I truly do not know the exact reasons why these two potentially quite large major gift types are not introduced in donor communications on a regular basis. Here are my top ten ideas below:
- Perhaps the fundraiser does not have an IRA and therefore does not understand them
- Suggesting the use of the IRA is relatively new and therefore not taught in most fundraising training
- Most charities do not already have IRA related gifts or pledges
- Since few charities discuss IRA related gifts, even fewer donors suggest them
- Since this is a relatively new concept very few financial planners or CPA’s or even attorneys suggest this type of charity gift to their clients
- Wills and trusts are considered to be complicated by lumping them into the mysterious “Planned Giving” category
- The majority of estate related giving goes to larger charities and is therefore not “familiar” to small and medium charities
- Fundraisers are hesitant to suggest naming themselves in a donor’s will
- The fundraiser before them did not establish the use of donor’s wills as a major gift option
- Neither the IRA or Will option is targeted in the charity’s fundraising plan, nor its marketing plan nor, worst of all, in its strategic plan
It is Easy to Begin!
Ironically, both the IRA and Will related major gift options are relatively easy to focus in on.
Here are a few ideas to discuss at your next fundraising committee meeting or better yet, your next board meeting:
- Invite an estate planning attorney or two onto your board or committee
- Invite a financial planning professional and/or a CPA onto your board or committee
- Use them to help you understand both concepts better and to answer donor related questions
- Make your first gifts of each type come from your CEO/Executive Director and yourself
- Seek the next gifts of each type from your board members so experience is gained and you can truthfully use them as a reference for donor solicitations
- Create downloadable PDF’s explaining both types and providing illustrations for your website, and to be used as part of a mailing
- Introduce both options to donors who have given three or more years consecutively and to those who have given five or more times in their time supporting you
- Do not ignore smaller donors who meet the criteria mentioned in #7
- Create a “Legacy” related group or society to recognize those who participate for either option
- Be patient — the time from introducing the two concepts until monies are received may be years if not decades
The key concepts of naming a charity the beneficiary of IRA by the donor as well as naming the charity in the donor’s will, should not be ignored by any size nonprofit engaged in fundraising.
Even small or relatively new charities should truly consider these outstanding major gift options since their donors are often the most loyal as they’re very close to the core mission for various reasons.
Once implemented, the long-term financial results for the charity can be highly impactful as these gift types unfold. In addition, the donor “giving experience,” since it may be the only chance for many donors to make a major gift, might just be considered their ultimate one.