Listening between the lines
The most common clue in this situation was when donors would say “I’d like to give…but.” Certain patterns began to emerge as I listened “between the lines” to what my donors said after making this initial statement.
Especially in the cases of older, retired donors, the reason for not making the gift usually revolved around their genuine concern about their financial security. The need to conserve assets for future health-related expenses was also a common theme.
When working with younger donors, I often listened to worries related to educating children and/or the realization that parents or other elderly loved ones might need their assistance in future years.
Allaying donor fears
My experience with estate planning and tax issues while I was practicing law helped me understand how many of our gift planning tools were perfectly suited to helping donors give, while also addressing the various fears and concerns that I came to realize were my real “competition” for gifts.
From that point forward, it became much easier for me to “diagnose” which gift plan would work best for a particular donor. I saw that all I had to do was listen to why my donors wanted to give, and then pay close attention when they told me why they felt they couldn’t.
It was not unusual for the same thing to happen when I thanked a donor. How often have you said thank you to a donor, only to hear “I wish it could have been more, but…”? Listening to what comes after that initial statement, and responding, “What if there were a way you could do both?” might initiate a gift planning discussion that is both fruitful for you and satisfying to the donor.
What drives planned gifts—tax benefits or charitable intent?
Variations of today’s most common gift planning tools predate by far the specific regulations and tax benefits laid out in the Internal Revenue Code, suggesting that something more than just a desire for tax savings must be motivating donors to make irrevocable split interest gifts.
As far back as the Middle Ages, charitable gift annuities allowed donors to make what in many cases was their “gift of a lifetime,” while retaining a reliable source of income for their later years.
It was only much later that tax benefits became available for such gifts, in recognition of the fact that the gift element could be valued, and therefore allowed as a deduction against income and/or estate taxes.
The core gift motivators prior to the existence of tax benefits were the same as they are today. Sensitivity to why people give may be the key to understanding how and why planned giving techniques would survive the reduction or elimination of many of the tax incentives we have come to know and love.
Choosing the right tool
Gift annuities help alleviate the fear of outliving resources in later years, while other planned giving tools can help remove other roadblocks to giving.
For example, a wealthy individual might want to give, but would also like to leave an inheritance to younger relatives. In this case, a charitable lead trust may offer an excellent alternative. It can serve to “temporarily disinherit” heirs until they are older, while diverting funds that might otherwise have been consumed by taxes to charitable interests for a specific period of time.
Charitable remainder trusts, on the other hand, offer a way to meet a variety of financial needs before funds become available for charitable purposes. For example, a charitable remainder trust that will last only for a predetermined number of years may be an ideal way for a parent or grandparent to make a generous gift that will be received by the charity only after funds have been distributed for the education of children or to benefit other loved ones.
Sometimes, donors’ concerns may be such that only a gift at the conclusion of their lifetime is feasible. A charitable bequest or a gift of the remainder of a retirement plan or insurance contract may offer the best solution because the donor retains complete access to all his or her assets for life and may change his or her plans if necessary. Such gifts are also simple to understand and easy to accomplish.
The key to fundraising success in today’s environment, where economic conditions may amplify older and not-so-old prospects’ natural fears, is to appreciate and understand the personal concerns that may be interfering with what might otherwise be a donor’s heartfelt and sincere YES.