Posted August 10th, 2016

The Importance of Planned Gift Recognition Societies

Upscale settings on restaurant tableIs your organization honoring those who have committed to an ultimate gift?

Those who inform you of their gift commitments are a very special group. They have set themselves apart and are demonstrating to you that they want to be recognized for their gifts during their lifetime.

This increased level of dedication may be the reason why studies have also shown that bequests received from donors who informed charities in advance of their bequests are often two or three times the amount of bequests received from those who do not notify charitable interests in advance of their gift.

To honor this special group of people many nonprofits have established recognition societies that pay tribute to those who have made a gift commitment through their estate or other long-term commitment. Membership in these societies is reserved for donors who have arranged for a gift through their will or living trust, a life insurance or retirement plan beneficiary designation, gift annuity, charitable remainder trust or other life income gift.

In addition to being recognized publicly for their commitment, these donors typically receive other benefits when they become members of a planned gift recognition society. Examples include personal mementos such as lapel pins or plaques and/or invitations to special events such as luncheons and informational seminars. While donors may enjoy certain rewards from membership in a recognition society, the eventual charitable recipient is the one who will benefit the most from creating and maintaining a donor recognition society.

Simple morale booster

Having a recognition society for planned gift donors lets them know you appreciate them and the gifts they have made. Donors who make planned gifts have most likely made current gifts in the past and, as such, may have grown accustomed over the years to being a member of a particular gift recognition society. Acknowledging donors for their planned gifts as well with special, separate giving societies is an easy way to show them they remain important. Such programs also allow you to continue to recognize them publicly for their forethought and generosity—even as they may be reducing the amount and frequency of their current gifts.

Strengthening the ties that bind

Simply by the nature of most planned gifts, a person who makes a long-term commitment to a charitable recipient is raising it to the level of a friend or family member. Maintaining a recognition society allows staff to keep in touch with planned gift donors and, thus, provides an additional opportunity to strengthen long-term relationships with them.

Perhaps you might invite recognition society donors to an annual luncheon in their honor. Or your CEO may host a holiday reception. They may also be included in broader recognition events that have already been scheduled for other purposes.

A recognition society can provide opportunities for more continuity of contact, which in turn can create opportunities to meet with planned givers and get to know them better one on one. And once you learn more about your donors, you may be in a better position to help them discover other gift planning ideas that may be of interest to them.

Reduce the risk of removal

If an organization is inattentive to donors of planned gifts due to complacency, staff turnover, poor record keeping or other factors, it runs the risk of alienating them and perhaps losing their gifts altogether.

Keep in mind that many planned gifts are revocable. For example, a bequest provision or retirement plan beneficiary designation is easily changed during the donor’s lifetime, as are the remainder interests of many otherwise irrevocable charitable remainder trusts.

Having an effective, ongoing recognition society in place can help reduce the risk of being removed from a donor’s estate plans. Remember that planned gift donors are often reaching the age at which their current giving naturally may be decreasing. A planned gift recognition society can be key to managing the natural “downgrading” and inevitable lapse of many older donors.

The society provides a way to continue to acknowledge a donor’s past and future involvement. In addition, you may see more planned gift commitments from prospective donors when they see that those who have made future commitments—not just donors of current gifts—are also given the recognition they deserve.

Recognize the limits

No matter how many “benefits” you offer to donors through membership in a planned gift recognition society, realize that few people will face mortality, change their estate plans and/or incur a legal fee just to make a gift that “earns” them a lapel pin or certificate. In fact, many bequest and other planned gift donors will never tell you of their gift during their lifetime, and a percentage of others who do inform you will normally wish to remain completely anonymous and may not want to participate in a recognition society—publicly or at all.

Informal surveys have shown that, at most, 20 to 30 percent of estate donors will inform you of their gift provisions in advance. For many broad-based organizations, that percentage may easily be 10 percent or less. That is why it is important to keep recognition societies in context of communications efforts designed to influence those who will never share their plans under any circumstances.

While your recognition society may honor only a relatively small group of bequest and other planned gift donors, remember that this type of relationship building can help strengthen and cement long-term donor friendships, which can lead to significant additional gift income in the future. ■

For an example of a successful planned gift recognition society, see “Donor Recognition Society Case Study: The Church Health Center“.

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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