Posted December 1st, 2007

Managing Elder Donor Relationships

Donors of all ages have special concerns when it comes to giving. As donors age, however, they may be more reluctant to give in the same amounts or frequency as in earlier years, even if they have more assets than ever before. Therefore, it is critical that we learn to work effectively with older donors to help them meet their goals.

Challenges to giving

Many development officers have likely seen the comment, “I’d like to give more but just don’t see how I can,” scribbled onto a response device in a slightly shaky hand. Such donors may wish they could continue giving, but are concerned they will deplete reserves they may need later. Many older donors are often concerned about:

  • Their physical health
  • Their mental health
  • Providing for loved ones
  • Not outliving their resources in the final years of their life

These concerns may cause current donors to begin lapsing, even while they are actively planning for substantial charitable gifts through their wills or other long-range plans. Showing donors which planned gift vehicles can offer strategies to combat these concerns may be wise as a way to help keep these donors involved with an organization into their later years. Regularly thanking older, long-term donors and generally treating them with the respect they deserve is also key to maintaining a close relationship with them.

Planning for continued giving

Older donors are normally interested in managing their assets for the remainder of their lives as well as transferring them at death. Therefore, educating them about how to integrate their personal and philanthropic objectives is essential at this phase in their lives.

For some in the oldest age groups, healthcare and living expenses may be extremely
high. Donors experiencing such costs may be good prospects for a charitable gift annuity, which can help them maintain the cash flow they desire for living expenses while at the same time helping them meet charitable goals. A testamentary gift annuity, which makes payments for life to a person designated by the donor, may also appeal to donors who wish to provide for heirs and other loved ones.

While older donors will enjoy a current income tax deduction, enhanced income stream, and the possible avoidance of capital gains taxes that a gift annuity offers, keep in mind that many seniors—especially those who fear diminished mental capacity as they age—may choose to fund a gift annuity as much for the asset management and assured payments as anything else. In addition, older donors whose incomes may be increasingly derived from conservative, low-yielding investment strategies may especially appreciate that their future payments are guaranteed and backed by all the available assets of the organization they have chosen to support.

Praising past giving

Another way to make sure your older donors stay connected to your organization, even during the likely “downgrade” of their giving, is to create ways to thank them for the gifts they have made over the years. For example, for donors who have been long-term members of a major giving club called “The Tower Society,” consider creating another division called “The Endowed Tower Society” for members over a certain age. Create special events just for this group, and consider encouraging donors to bring their children to these functions to continue a family tradition of giving to your organization. Such specialized recognition societies can help older donors continue to feel special into their later years.

Editor’s note: The preceding article is partially excerpted from Session VII of “Managing Planned Giving Relationships.” See page 3 for more information and upcoming dates.

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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