Judi Smith, MA, CFRE recently joined us for a webinar she showed how you can get started with planned giving. If you know that you know you should be talking to your longtime donors and volunteers about making a legacy gift, but haven’t yet, this webinar is for you.

In case you missed it, you can watch the full replay here:

Full Transcript:

Steven: Well, Judi, my clock just struck 1:00. Do you want to go ahead and get started?

Judi: Absolutely.

Steven: All right. Well, good afternoon to all of you in the East Coast and good morning if you’re in the West Coast or somewhere in between. Thanks for being here for today’s Bloomerang Webinar, “Getting Started with Planned Giving.” My name is Steven Shattuck and I’m the VP of Marketing here at Bloomerang. I’ll be moderating today’s discussion.

Before we begin, I just want to go through some housekeeping items. We are recording this presentation. So if you need to leave early or perhaps you want to review the content a little later on, you’ll be able to do that. I’ll be sending out the recording, as well as the slides, a little later on this afternoon. So look for that and as you’re listening today, please feel free to make use of the chat box there on your screen. We’ll save some time for Q & A at the end. So don’t be shy about asking questions, sending comments. We’ll try to get to as many as possible before the 2:00 P.M. hour.

And just in case this is your first Bloomerang webinar with us, welcome. We do these webinars every Thursday. In addition to that, we also are a provider of some really good donor database software. If you’re in the market for that, if you’re looking for some new fundraising software or donor management software, check us out. You can get a video demo on our website. You can learn more about the product. We would love for you to do that if you are interested in the product.

Without further ado, I want to go ahead and introduce today’s guest to you, Judi Smith, MA, CFRE. Hey, Judi, how’s it going?

Judi: Going well. I’m in beautiful Sedona, Arizona.

Steven: Yes, it is beautiful. I’m jealous. It’s a rainy Indianapolis here. So, I bet your weather is a lot better than ours, but it’s still awesome of you to be here.

Judi: It’s supposed to be hot today.

Steven: Yeah, that’s sure. You got the heat, we got the rain. I guess that evens out. Just to brag on Judi a little bit before she gets into it. In case you don’t know Judi, she’s definitely someone you should know. She just capped off her career of more than three decades in development. She’s worked with the Arizona Community Foundation in Sedona as a Regional Senior Philanthropic Advisor. She has been an independent consultant to nonprofits. She served as an executive director and staff leader in higher ed, arts organizations and in national foundations.

She doesn’t just talk the talk. She does actually walk the walk, as well. She’s a sought-after speaker and trainer. She teaches others about topics in the fields. She’s a huge believer in planned giving and endowments. That’s what she’s going to talk about today. I’m really excited. So, Judi, why don’t you take it away for us?

Judi: All right. All right. Well, let’s get started with planned giving, one of my very favorite topic. So let’s see if I can make it new. Pros and cons come with any decision that you’re starting to make and planned giving certainly has its share of them. Let’s take a look at some of the pros for starting a planned giving program or if you have one, jumpstarting one. First of all, it says something about your organization and that fact that you’re looking to the future that you’re not just looking at your events and grants, and maybe an annual fund. It will ask your donors to think about making larger gifts than they may if you don’t offer planned giving.

Those gifts, of course, are advantageous to donors as well. Very often, whether it’s for an income gift or some kind of tax advantages. It gives you as an organization an opportunity to build endowment, which is important for your future. Think of that as your own 401(k) or 403(b). It also gives you an opportunity to develop relationships with planning professionals who, very often, have their brains picked about organizations in the community that would be logical for leaving some kind of estate gift. And, of course, so as larger gifts that you receive help you advance your mission and do all the work that you do.

There’s also a lot of opportunity for planned giving. Statistics show that about two-thirds of Americans, and, of course, you can find numbers to validate almost anything, but about two-thirds of Americans have a will or trust. Those who are 55 and older, it’s about 10%. There’s a lot of opportunity. Kimball and Company in 2007 did a study. In that study, they found that one person in three would consider a charitable request if they were asked. There’s a real gap there between that 33.3% and the 10% 55 and up who have actually done that.

I’m not going to go into the inter-generational wealth transfer today, but if you’re not familiar with the Boston College study of the $41 trillion estate transfer that would happen by 2055, you should look into that because we’re in the first trimester of that inter-generational wealth transfer. And it is happening. As the silent generation gives to the baby boomers and the baby boomers will ultimately inherit and pass on to the millennials.

Another thing to think about when you’re thinking about opportunity is that 10,000 Americans turns 65 every day for the next few years. So the baby boomers are in full bloom.

But, like anything, there are cons. Starting planned giving does cost you some money in it does take some time. Depending upon how extensive your program is, you may find that there’s a lot to learn. Your documentation and paperwork are more stringent than it is for cash gifts. You really should keep up with what Congress is doing or some cases, not doing, because what they decide about some certain things can make a difference in what’s available to donors and charitable taxation.

Also, depending on the type of organization you are, you may find that to be a deterrent. If you’re a new organization that’s not affiliated with a long-established organization, that could be a problem, just because your donors are going to want to be sure that you’re going to be there forever. However, if you’re a new foundation that’s attached to a hospital or school, and the hospital or school has been there forever, that’s a different story because the affiliation is with that stable, established organization.

There are also some organizations that get most of their funding from government sources. And in those instances, often you don’t have the database. You don’t have donors. You may have volunteers, but you may not really have a group of people who are willing to support you. So you may want to take a look at the type of organization you are and whether or not you actually have those people who would be willing to commit those lifetime assets to you.

So let’s say you’ve thought about it, and you probably have or you wouldn’t be on the call, and you decide to go for it. Let’s figure out what “it” is when we’re talking about planned giving. If I were starting a planned giving program today and I didn’t do anything else, I would start a bequest program. Consistently, over time, if you look at the Giving USA reports, the 2014 report just came out, about 8% of all the gift dollars given comes to us in the form of bequest. And about 75% of all the planned gifts that we get as an organization come from bequests. So if you do nothing else, invite your closest friends to remember you in their will or trust because that’s really the sweet spot for a planned giving.

Bequests are really easy. Again, you don’t do them. Their legal council will advise them, but you can talk to donors about leaving a specific asset like a stock or a specific amount. I like to ask for a percentage of the estate because that typically nets a larger gift than a specific amount. Most people, in thinking about how much money they’ll have left at the end of life, undershoot it. If they have thought that they’re going to have $250,000 left and they want to leave you 10%, they may put in $25,000. But if they leave you 10% and their estate’s half a million, it’s a larger gift. If you’re very lucky, you might be the sole beneficiary of the estate’s remainder and that’s a very nice thing.

And then, of course, there are bequests that are contingent bequests. A good many of those bequests never come to fruition because it will be something like, “Well, we’ll leave you, your organization, the remainder of our estate provided that both of our children predecease us.” And, of course, the likelihood of a lot of those contingent bequests is negligible. So about 30% of bequests that are documented don’t happen, either because they’re contingent or because the estate doesn’t have enough money.

Another easy thing to promote that doesn’t take any specific expertise is a beneficiary designation. Assets like life insurance policies and IRAs transfer at death usually with just s simple form that you get from the asset custodian. So if you have a life insurance form, the donor contacts the life insurance company and says, “I want to change my beneficiary and make the designated beneficiary my favorite charity.” They don’t have to give you the entire balance. They can give you a percentage of the final balance. So that’s a really easy thing to do. It doesn’t require any expertise on anybody’s part. It just requires a motivated donor who’s willing to contact the company and fill out the form.

Charitable life insurance is also fairly easy. I’ll just give you some thoughts from a number of years in accepting gifts from charitable life insurance. I’ve found that over time it’s better to let donors work with their own agents rather than trying to adopt the program from one company that wants to go out and sell life insurance to your donor. Typically, I think you’ll get a better response and you’ll certainly get a more lasting gifts if you let people work with their own planning professionals.

You also probably want to accept as gifts only those policies that build and maintain cash value. Here there’s a little discrepancy between what you’ll actually accept as a gift and what you’ll recognize. We’ll talk a little bit later on about establishing a recognition society for your planned giving donors. I would never turn down for recognition purposes a term life policy. Term life is what your organization may carry on you just as an employee or what organizations and companies will have term life. Of course, as long as the premium’s being paid, which typically means as long as the person is employed, then that policy is in effect. When the person retires or leaves the organization, the policy is not in effect.

However, that gives you a planning opportunity. If you have recognized someone as a member of your heritage society through their term life policy, then they retire, that gift is no longer there but you have honored their wish to provide something for you in the future. And that’s a launching pad for you to talk to them about a gift that works for them at this stage of their life.

I would alert you to the fact that valuation for gift of life insurance changed with the Pension Protection Act of 2006 and there are companies that will help you value life insurance policies without getting into a lot of tall grass here. If you are thinking about starting a charitable life insurance program, I’m going to refer you to the Partnership for Philanthropic Planning, affectionately known as PPP, because they have a really good white paper on their website that calls attention to a lot of things that you might want to think about if you’re interested in charitable life insurance as part of your program.

Even though if it’s not in effect right now today, I do want to mention the IRA charitable rollover. This was also something that was initiated with the Pension Protection Act of 2006 and it was inaugurated for a two-year period and then renewed, and then renewed, and every time Congress renewed it, they pushed it later in the year until the last couple of times. It’s been retroactive to the previous year and then starting. It is not in effect right now. I believe, currently, the House has passed it but the Senate hasn’t. If they get around to it, and it never seems to be a very high priority for them, it typically is not until late in the year.

However, if you’re tuned into this and you pay attention to it, it’s a super easy gift. There are a lot of donors who have to take out a required minimum distribution from their IRAs because they’re 70 1/2 or older and they don’t really need that money. They’re more than happy if you ask them, just like any other gift, to give it to your organization because if they take it out as a distribution, they have to pay income taxes on it.

Now becausethey’re not taking it out if it’s an IRA rollover, they don’t give a charitable income tax deduction because, in order to do that, you have to take it as an income. But they don’t have to pay income tax on it, and that’s a real benefit for some of our older people. So keep that on mind, put your antenna up and if you hear that the IRA charitable role over has been reenacted, it’s really easy to talk to some of your older donors about whether or not they have to take that distribution.

One for the road. If you are starting a brand new planned giving program, and you are a small shop, say, you may want to be very careful in thinking about gifts of real estate. And I say that because there are a lot of moving pieces withgiftsof real estate. For one thing, if you are going to keep the property as opposed to selling the property, it makes the difference in the donor’s income tax deduction. There are environmental considerations. And anytime you own property, especially if you are not using it for your charitable purposes, you have maintenance costs, insurance, mowing the lawn, blowing the snow, whatever. You have liability. You may have structural insurance, and there’s a cost with selling. If you decide to get into accepting to get in a real estate, you will want to work with someone to help you get update yourgiftacceptance policies to reflect what you do and don’t want in terms of gifts of real estate.

I would also be remiss if I didn’t talk with you about charitablegift annuitiesbecause those areterrificallypopular gifting vehicles for older adults who could use income. However, I would be less than honest if I didn’t say that they require alot of thought and preparation and understanding.

Agift annuityis the contract that’s issued by the charitable organization. It’s about the only planned gift that we as planning professionals do without the help of an outside professional. You don’t need an attorney, you don’t need a real estate agent, you don’t need a bank trust officer. This is a contract with your organization, but because it’s a contract with your organization it’s also a serious decision. And it means that all of the assets of your organization are pledged in support of those annuitants.

There are also 11 states where the requirements for issuing thegift annuityarefairly strenuous and not just a matter of how many unrestricted assetsyou have, but sometimesseparatefund reserves that you have to keep trackof. So if you are interested in looking atgift annuities,you will probably want to get some software.

There are a couple of software companies that will help you with that. And there are investment considerations, so your investment committee would certainlywantto be involved there. Butthey’regreat for repeat gifts. The resource for youto look at is the American Council onGift Annuities,which is the ACGA-web.org. You do not want to make a mistake of doingACGA.org because you will get theAmerican Corn Growers Association. So getthat “-web” in there.

So just looking at the type of gifts that you might want to include in a new planned giving program is absolutely bequests. That’s number one. Those payable on death transfers, like the custodial assets form for life insurance policies and IRAs, life insurance, as long as you keep your eyes open and head up and you know what you are doing. And then, looking down the road, possibly the IRA rollover if it comes in, real estate, maybe, and charitablegift annuities.

Just a couple of cautions. Sometimes when we learn all about some newplanned gifting vehicle, we get allexcitedabout it and we start promoting the vehicle instead of the gift. And it’s really important for plannedgifts, maybe more so than other gifts, toreally listento the donor and suggest thegift that’smostappropriate from the donor’s need. I know a lot of people avoid planned giving because you’ve heard of kind of jargon like ILIT, CRUT and CRAT and things like that. You really don’t need to know any of that. Your donor’s don’t knowit. You’ll just confusethemif you talk about it. And interestingly enough, studies find that even the term “planned giving” is not known to many donors. Our friends in Canada have the right idea. They call it gift planning. It’s the Canadian Association of Gift Planners. And people understand gift planning so don’t even feel that you have to use the term “planned giving.”

So let’s look at who some of the people are who might be your planned gift donors. I have to applaud the work of Dr. Russell James, who I believe is at Texas Tech. He has done a groundbreaking study from 1992 to 2012, which was, of course, the last year we had the estate tax deduction that was meaningful in terms of charitablegifts. And his information is just a constant force of information for what’s happening in our field. Part of his research, I think I already mentioned earlier, 30% of those wills that have a charitableprovision end upnot generating bequests. Again, it could be the will is contested, there’s no money orit was acontingent bequest.

And important for you to know is that most charitable bequest donors die in their 80s, but not only that, most of the wills that provide the charitable bequests were completed in the last five years of the donor’s life. So you really are looking at thewillthat carries the day is probablya willthat was made between say age 78 and 84. However, you don’t want to ignore those younger donors because those who put you in theirwillor trust at a really young age and leave you in there provide 40% of the bequest dollars. So it’s not at all inappropriate to talk to someone who is making their first will, perhaps because they have minor children and are establishingguardianship, and ask them to consider including you in their estate plan. So that’s some of the research.

Once a charitableprovisionhas been established, 55% will keep it inovertime. Those bequests that do come from the older age from individuals who have no surviving spouse tend to be larger, 2/3 larger bequests and 71% of the dollar amount for those older donors who are your bequest donors.

There was also study in 2007 from Cambell & Company, a consulting firm in Chicago, that found that 1in3 would consider request, that ages 40 to 60 was kind of a sweet spot, probably because they were looking at their retirement, the lasthalfof their lives, childrenwerein college or taken care of. Education is an important factor, at least thebachelor’s degree, the more the education the better, and people who were motivated by doing something good. Income is not really a factor in consideration of a bequest. And this isalwayssomethingthat I like to tell people because very often, boards of director and even CEOs or executive directors say, “If we start asking people for bequests, they’ll stop giving to us.” Actually,the inverse is true. If you go throughyourdatabase and look for those people who are giving you $2000, you are likely to find that they already have named you in their will. So studies show that those people who have made that commitment of their assets to you, even though they may not have told you that you arein their willor in their trust, well, over time thosegiftswill grow. They don’t go away because they’ve invested in you andyou’re one of their favorite charities.

Let’s look at this word cloud because it’s kind of a visual representation of some of Russell James’ research and Campbell & Company’s research. Notice that the biggestword on there is”childless” and that really is true. People without children are more likely to leave you some kind of an estate gift than people who have children. Another bigphrasethere is”will, trust or payable on death.” Ninety percent of theplanned gifts that you will receiveare inthe form ofa will, trust or one of those payable on death transfers, which what I said if you don’t do anything else, do those things.

Frequency is a big word because it is not the size of the gift, it’s how often they are willing to write that check,runthat credit card,clickon the website and make a gift. So frequency is important. Single people, whether they are widowed or just single, are more likely to make a gift than a married couple. Those volunteers, we often ignore our volunteers, but they are dynamite planned gift donors. Many times, a volunteer will tell you, “Well, I’m giving you time because I can’t give you money.” And while that may be true while they are living, they have an estate. And your volunteers are golden in terms ofplanned gifts. They are fabulous for you.

People who attend your events, especially for a long time, which factors in to loyalty, if you are looking to an annual gift, that $500 annual, that kind of litmus test than the bench mark of what you want to look for is people who might be considering a gift for you in their estate, 9.4%, according to Russell James of the donors of 50 plus who have some kind of charitable plan. I give you anearlierstatistic thatsaid10% 55-plus.

So you can see in that five-year period between 50 and 55, 6/10 of a percent of donors are making that move toward an estate gift ofsome kind. And 78 is the average age of charitable gift annuitant. So the word cloud kind of captured some of the things visually for you to think about when you are thinking about potential planned giving donors.

And then just conventional wisdom from those of us who’ve been around for a while and doing this, it’s not thesizeof thegiftthey make on an annual basis. It’s not even the recency of thegift, because again, studies show that in the last 10 years of a donor’s life they may stop theannual gift. They may stop coming to your events because they don’t go out anymore. They don’t drive at night. They don’t want to RSVP to say they’ll come and then maybe wake up and they don’t feel well, so they just stop coming. And for heaven’s sake, don’t cutthem off from your mailing list. Keep them on there. If they have been frequent donors and they’re fairly elderly, you may be the recipient of an estate gift and you still want to be in that will in the lastfive years of their life.

So let’s recapwho you’relooking for. You are looking for the faithful, those who volunteer, those who attend, those who have given. Size is not important.It’sfrequency that you are after. Look for people who havegrowngifts overtime. That $2000 number may be an indicator. Age is certainly a factor to consider. At various stages of people’s lives, they are more likely to be susceptible to considering a planned gift. Higher education is a factor. Spouseless and childless are also important considerations.

So I hope I’ve convinced you that you need to get started in planned giving, so let’s figure out how you do it. You have to have your internal house in order before you go out. It works from the outside in. If you are development officer sitting there listening to this and your executive director or your CEOisnot convinced, you must get that person on board with you because it won’t be just you. It will touch every component of your operation. This is the time that you want tolook at your giftacceptance policies and update them if necessary to reflect the planned gifts that you want to receive.

You want to make sure that you are talking with your finance team about how you will actually book those planned giftsandhow you will investthem because your donors will ask you. They’re giving you the assets of their lifetime and they want to be sure that you’re taking care of them. So your finance team and your auditing team need to be part of this. You will want to learn what your software can do to allow you to track those planned gifts because you don’t want to be tracking several million dollars manually on an Excel spreadsheet.

You also want to involve your public relations team. There are wonderful, wonderful programs, brochures and so on available across the country that will help you promote your planned giving program and whatever giving vehicles that you choose. But you also want to customize those things and personalize them. You want donor stories that you can tell in your newsletters. So you need your public relations team.

Even your receptionist has to have his or her antenna up because you’ll get a call from an attorney’s office that just says, “I need your federal ID number.” Well, the attorney’s office is probably not going to tell you why, but at least you might be able to have a conversation or at least have the receptionist transfer the call to the appropriate person.

You also want to think about your budget. As I said, there’s wonderful material available, customized websites, brochures. It is really not expensive. I mean, for a starting expenditure of $5,000 or so you can have a website that is within your website that matches your template and access to all kinds of materials.

I’m going to say, “Do you want to use existing staff or hire a specialist?” But if you’re just starting out, especially if you’re a small organization, you probably want to use existing staff. The mean salary in 2012 for a planned giving master was $90,000 and some change. And if that person happens to be an attorney or CFRE or has 30 years of experience, it’s more than that. Of course, the part of the country that you’re in matters because you’re higher. The south of is lower. Metropolitan areas cost more than rural.

But I am a big believer that you can use existing staff to do your planned giving program. It simply becomes the time management thing. My favorite way to utilize existing staff is to get rid of your worst performing event. Events are a huge time suck and if you can get rid of one that’s not working for you and redirect that time to promoting planned gifts, in the long haul your organization will be better. However, if you have to have that event to make your annual budget, don’t look to planned giving to do that because it takes some time before the money starts walking in the door.

Especially if you decide, but even if you don’t decide the hire a specific professional for planned giving, you really should educate yourself about planned giving. Keep up with everything. The Partnership for Philanthropic Planning, you probably have local branches of that. You have estate planning councils. There’s ASP, which doesn’t necessarily always have planned giving programs, but they have some of them. But you need to keep yourself educated about what’s available so you can help your donors appropriately.

And you’ll need technology. You’ll need local travel even if it’s just mileage because when you’re talking to those donors you’re going to be in their homes and offices and you have to get there. So think about your budget and think about what you can consider to move forward.

Once you have your internal ducks in a row, each of your organizations has an approval process that you will want to utilize to begin involving your volunteers. I like to start with a charter membership of a legacy or a heritage society. I think charter membership can go for five years if it needs to. You just tell those early people that they’re charter members and you have some kind of predetermined goal of how many people you want for charter membership, 50, 100, whatever works with your donor pool.

Come up with a name that is memorable, but I encourage people not to name it after a person. Unless it happens to be your organization’s founder, then a name is possible. I had a client who was not really in the planned giving business, but they got an unsolicited bequest and nobody knew the people. They named their heritage society for that person and even the board members couldn’t remember the name. So pick a name that’s logical, The 1905 Society, The Acorn Society, a founder’s name. If you have some landmark on campus, use that. But try not to make it something that people will forget or don’t name it after a current person.

You need to figure out what gifts will qualify and how you’ll document those. I mentioned the term life insurance earlier. I would certainly qualify that. A lot of organizations want a lot of paperwork. I tend to err on the side of minimalism. If people want to send me a copy of their trust I’m more than happy to keep it on file or scan it in, but I’m willing to take their word for it if they tell me that they’ve done that.

And then you want to think about what kinds of benefits you want to offer this group of people. And when I say benefits, they don’t want much. They certainly don’t want stuff. Most people are downsizing or getting rid of clutter. They don’t want things that their children will have to dispose of. The benefit could be something like a concert every year or a breakfast with the president or something like that. But you do want in your documentation to ascertain whether or not they’ll allow you to list their name because that’s important.

You will also want to make the professional advisors in your area aware of your program. How you do that, whether you have seminars, whether you go to their offices, whether you have an advisory council, whether you send them a newsletter, in some way you need to involve those advisors because studies show that especially for high net worth individuals, the professional advisors are going to be a huge referral source for you. So think about that and also realize that professional advisors need to attend seminars for professional education every year in order to maintain their certification. Attorneys particularly have to have ethics seminars every year.

So if you could do something where attorneys can get their ethics requirement out of the way or at least support a portion of it that’s a good way to do a commercial for your organization and let the professional advisors and your community know that you’re in the business of accepting planned gifts.

Finally, when you’ve done all of that, you can sit down and talk to your perspective donor. I’ve just put in a couple of examples of things that have worked for me. Say somebody’s giving you $1000 annual gift and say your endowment has a 4% spending policy. Well, if they would put $25,000 in their will or trust, they would be able to make that $1000 gift every year. And if you have a 5% spending policy, it’s only $20,000. So that’s a good way to talk to someone about a planned gift.

Interestingly enough, a few years ago, Kent State University did a program where they had the students in their phone campaign talk to people who were making $1000 gifts and ask them if they would consider endowing. And, of course, then they handed it off to one of the staff professionals, but they were very successful with that. So kind of keep that in your hip pocket and think about a way that you could use that to broach the topic of a planned gift.

I’ve also been successful with talking to donors about making their favorite charities one of their children. Very often, you’ll be talking to someone and they’ll say, “Oh, my children are going to inherit everything.” Well, if you know that they have three children, for example, you can say, “Mildred, you’ve been such a faithful supporter for us and I know you support your church and your alma mater. Have you ever thought if it would really make a difference to your kids if they got 30% of your estate instead of 33 1/3? Would they really miss that 3 1/3%? And then you could continue to support forever those organizations that have been important to you during life.” And I’ve seen eyes light up when I’ve said that. So, again, that is something that I would recommend.

It’s also important, just like everything else, people are busy. Create a deadline. Say you started that charter membership and you have 78 people and it’s been four years. Well, your goal was 100. Create a deadline. I like for that deadline to be about 18 months and I like to include a couple of calendar yearends or fiscal yearends just because that’s when people get their plans in place.

So when you’re close to meeting that charter membership goal, if you let people know, “We’re closing our charter membership. Obviously, we still welcome estate gifts, but we’re always going in our annual report to list you as a charter membership,” sometimes that deadline will push people to finalize those documents and get you the information you’re looking for.

But really, the best approach in talking to people is to help people create their legacy. They want to be remembered well and fondly and that’s important to your organization. And that’s why about 80% of the people who have you in their will or trust won’t tell you. They’re afraid that if they tell you and accept that charter membership in your legacy society and then something happens, usually they’re worried about a medical emergency at the end of life. But they don’t want to be remembered as that person who went to all of your presidential breakfasts and then didn’t leave a gift. So help them create their legacy. Whatever money they’re going to leave for you can be used for a scholarship or a program they’re interested in. That’s where you’ll really have the success. So make sure you help them think about their legacy.

Also, they’re savvy about taxes, for the most part. Nobody wants to find out they’ve done something stupid financially. So anything that you can tell them from a tax standpoint or even an income standpoint and helping them work with their planning professionals to accomplish their charitable goals is also important.

Now the things you see on the screen now are things that can trigger or, in the same order, can trigger starting a planned gift, initiating a planned gift or taking you out of the will. Travel is one that doesn’t take you out of the will, but I can’t tell you how many times somebody has taken a first trip overseas, I get a phone call and they say, “If the plane falls out of the sky,” I don’t know where that comes from, “If the plane falls out of the sky, I want you to know that your organization is going to receive our estate.” So overseas travel.

Death is the huge one, both for creating a planned gift, when people look at their mortality, whether it’s through the death of a spouse or the death of a child, God forbid, or the death of a parent when they inherit. Death will make them think about their own plan and sometimes as they’re staring death in the face it will make them take you out of the will. The same as a huge illness will. But that legacy, that permanence that impact and even how stable your organizations are all factors that will be considered when they’re thinking about a planned gift.

You do have to educate and ask people about leaving their assets to you. They’re not giving to you out of their checkbook. They’re giving to you from their assets. Your organization has to be one that they believe in, you have to be worthy and you do have to let your donors know that you are in the business of accepting charitable gifts. I hope that I’ve convinced you can do it. I hope you will move forward with planned giving and I promise you that if you do, you will not only help your donors, but you will feel very fulfilled on behalf of your organization for inaugurating a planned giving program. Steven, I think I’m ready to take questions.

Steven: Yes, that was great. Thanks so much, Judi. I learned a lot just by listening along with everyone. So thanks for being here and sharing all your knowledge. We’ve got a few questions that have come in and if you’ve been sitting on your hands and maybe a little hesitant to ask something now is the time. You got about probably 10 minutes for questions. So, Judi, I’m just going to kind of go down the list here.

Judi: Okay.

Steven: Ron was wondering, is an organization that is 33 years old considered established enough to start a planned giving program?

Judi: Absolutely.

Steven: It looks like he’s got about . . . I thought you’d say yes. What’s a good year amount? Obviously, 33, that’s pretty well established. But is it five years, is it one year? What’s your feeling about that?

Judi: Well, it’s like everything else in fundraising, which is more an art than a science. Fifteen years is probably a good litmus test. You have to have been around long enough for people to be convinced that you’re going to be there, but I’ve worked in organizations whose databases only go back seven years or something and they don’t even know who their donors were 15 years ago. So it kind of depends upon the organization, the resources they’re willing to commit to it and whether or not they’re going to work it. Even if you’re a teeny tiny organization and who’s brand new, you’ve got a board of directors who certainly should be committed enough to make some kind of staid disposition for you. So there really is no hard and fast number in my experience. Thirty-three is great, though.

Steven: Okay. Yeah, 33 is definitely great. Laura here says that her private funding is 98% corporate and foundations so not too much individual giving. She’s wondering how she can launch a planned giving campaign with just a small pool, just 2% of individual donors. Is it possible? What can she do there with that small pool of donors?

Judi: It’s possible but tough. Again, you start with your board, you start with long-time staff, and you start with long-time volunteers. You might even look at heads, depending upon those corporations that have been giving to you for a long time. You may find that some of those people, some of those folks, especially if they’re closely held corporations, even though they’re giving through the corporate structure may have you in their hearts and in their documents. So it’s possible, but that’s where you definitely start small with you work inside out and may have 12 people, but 12 people is better than zero.

Steve: Yes. Absolutely. That’s a good idea, asking people who work at those corporations who are funding. That’s a really good idea. Judi, you just mentioned volunteers and long-term donors. Malory is asking about identifying more potential prospects. Wouldn’t organizational founders and past board members also be good prospects? Who else is a good . . .?

Judi: Absolutely. There are past volunteers. A board member is a volunteer. They absolutely are. You do want to talk to them because there’s nothing more heartbreaking than reading an obituary and finding that memorial contributions of your organization founder are going to another organization and then finding that you’re not in the will. So it’s the relationship, you have to maintain that relationship. But yes, those folks were quite logical volunteers.

Steven: Here is one from Robert I thought was pretty interesting. What is worse: having a bare bones planned giving program or having no program at all? So Robert is a one-man shop, he does communications, marketing and development; he does everything. Is it better to not have a program at all rather than having maybe a small one or one that maybe they can’t have a lot of time put into it?

Judi: Well, I err on the side of having something at all because, Robert, if you’re not asking them someone else is. You want those people who are closest to your organization to know that you want them to remember your organization in their estate documents. And if you don’t ask them and do that fledgling program, they probably won’t include you and it’s very sad that they won’t, but they probably won’t. So I have worked with very small organizations with one-person shops that do planned giving.

You could also train volunteers. In fact, I had a very heartwarming call yesterday from a board member I worked with about 10 years ago who I was the one-person shop and I trained volunteers to be my planned giving committee. This particular board member had been talking with this individual for years and never really gotten a commitment from him. They learned yesterday that there’s a seven-figure gift going to the association because this particular volunteer just kept talking to him. So yes, use your resources and do something. Don’t do nothing.

Steve: You can do it, Robert. We believe in you. Here’s one from Julie. Julie is wondering if you need a formal endowment to accept legacy gifts?

Judi: Well, I’m not sure what Julie means by formal endowment, but what I’m guessing is do you have something set up like a permanent endowment where the principal can’t be touched? I don’t want to get into UPMIFA because there are ways without UPMIFA that you can invade the principle. But what most people think of this is a permanent endowment, yes, you probably do.

The reason I say that is that we all know organizations that have said, “Well, we got our endowment. Here’s our endowment fund.” Then the roof fell in or a tornado came through or there was a fire and that money that was supposed to be put away permanently got spent by a subsequent board. So you probably do need something to assure the donor that if they give you their lifetime assets and they want it put away forever that it will be put away forever and only a portion of the earnings be used for it. So yes.

Steven: Here’s one from Karen really interesting. She’s getting ready to ask their best prospect, she’s saying. It’s their biggest, most loyal supporter to consider leaving their organization a gift, but they just found out that that person was just diagnosed with terminal cancer. Any advice on how to ask her delicately and avoid any awkwardness or is it a bad time? What would you do there? They’ve got their top prospect, but maybe the end of life is nearing and they want to handle it delicately?

Judi: Well, absolutely. Karen, I feel for you because that’s a tough situation. I think I would be very candid. If this is your top prospect and this person knows your organization very well, I would probably sit down with your donor and just say, “When we scheduled this meeting, Mary, I had intended to talk with you about your estate gift because you’ve been such a long time supporter for us. You’re a logical person to think that we might be included in your final plans.

However, I did not realize when we set this meeting up that you have cancer,” or whatever the situation is. “If this is a good time to talk with you about that, I would love to have that conversation. But if it is not a good time, I want you to tell me and we’ll go talk about the weather or the flower garden or something else.” There’s really nothing like candor, especially when you’re talking to a close friend of your organization. I think your donor will appreciate that.

Steven: Here’s one from Ron. Ron was wondering if it is ethical or unethical for the fundraiser to go with the benefactor to their financial advisors so all three of them meet together to talk about that. Is that tacky or is that a wise thing to do? What do you think there for Ron’s situation?

Judi: I don’t think it’s unethical at all because you’re clearly wearing your organization’s hat. In fact, you’ll find that especially if you’re setting up some kind of a document that will govern the endowment or the scholarship through your organization, the attorney or the advisor will want to make sure that the language and the legal documents say it goes to the scholarship fund or this particular donor advised fund or whatever it is. So if the donor wants you there, I don’t consider it unethical. I wonder if what he is concerned about is that it might be viewed as undue influence and, again, you have to be very clear that you’re representing your organization. You’re not there on behalf of the donor; you’re there on the request of the donor.

Steven: Makes sense. Well, we’ve probably got time for one more question. Judi, is it fair to say that you can take questions via email because we’re not going to get to nearly all of them here, unfortunately.

Judi: Sure. I’ll be happy to so that. You have to give me a little bit of grace because I’m working full-time now for the Arizona Community Foundation. So I would not answer them during business hours. I would answer them in evenings and over the weekend. But yes, I’d be delighted to take your questions via email.

Steven: Cool. Well, I’ll flash your email address on the screen while we view the last question. I thought this one would be a good one to end on. Audrey was wondering if it is ever appropriate to decline a planned gift? If so, how do you say no?

Judi: Well, I guess I have been with an organization that declined a planned gift and it happened to be real estate. Of course, we didn’t know it was coming so had we had the opportunity to talk with the donor upfront, we might have been able to structure a different type of asset from that donor’s estate. If you are declining a planned gift in conversation with the donor, you do have an opportunity to talk with them about assets that might be taxed more heavily than others. If somebody wants to give you stocks that have declined, for example, you would want to tell them to visit with their financial advisor. But if they’re losing money on the stocks, that’s not probably the asset they want to give you. So like so many things with planned giving, it depends.

Steven: Yes, for sure. Well, I think we’ll call it a day there. I know we didn’t get to all the questions, but please do reach out to Judi. Obviously, she’s a very great resource and sounds like she’d be happy to answer your questions through email. But, Judi, I want to give you the last word just to let people know more about you, how to get in touch with you ,anything that you want them to know before we end it for the day.

Judi: Well, I would have to tell you that I started planned giving in 1986. I have seen the profession grow and change over time. I am a firm believer that planned gifts are the way to help your donors realize capstone gifts for their entire life. Once you help them realize planned gifts for your organization, you’re helping them have peace of mind and helping them know that they will be remembered fondly and well and continue doing good long after they’re able to personally influence your organization. So I think Nike has a great advertising theme. I like their swoosh and I like to say “Just do it.”

Steven: Don’t put it off any longer.

Judi: Just do it.

Steven: Well, Judi, this is super fun. Thanks for being here for an hour and sharing all your knowledge. Thanks to all of you for hanging out for an hour or so. I know you’re all busy during the day during the week. We really appreciate you being here.

Lots more educational resources on our website. You can check out our blog. We’ve got our podcasts and downloadables. We would love for you to check that out. Like I said, we do webinars just about every week, usually on Thursdays. We’re going to take next week off for the 4th of July holiday, but we’re back in two weeks, 14 days from now with Sandy Reese, who is just totally awesome, a great consultant, super smart. She’s going to talk about how to create and run your first big campaign. So if you’re a small org, a new org and you haven’t done a big capital campaign or otherwise, check that out. Register for it.

We’ve got some other webinars on there that you can check out sometime in the future. You may see a topic that interests you. So we’d love to see you again; definitely love to see you in two weeks for Sandy’s webinar because it’s going to be a good one.

So I’ll say a final thanks, Judi. It’s really great having you and all of you listening along. Thanks for being here. Look for an email from me a little later on this afternoon I’ll be sending out the recording as well as slides and hopefully we’ll see you again on another Bloomerang webinar. So have a great rest of your week and a good weekend.

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. From 2018 - 2020, she served as the Director of Communications for the Public Relations Society of America's local Hoosier chapter. Prior to that she served on several different committees and in committee chair roles.