Posted April 1st, 2006

New Planned Giving Survey Released

It has been six years since the National Committee on Planned Giving (NCPG) released its last national survey of planned giving donors in 2000. That survey contained a wealth of information about the motivations and characteristics of these special donors.

A new regional survey conducted by the Toledo Area Planned Giving Council provides additional insights about planned gift donors living in northwest Ohio. The surveyed groups were over 35 years old with incomes greater than $75,000. In spite of geographic and demographic limitations, these survey results provide an updated view of one subset of planned giving prospects and donors.

Breakdown of participants

The groups surveyed were divided by age and income levels. The age and wealth levels examined included those between the ages of 35 and 54 and over 55 and those with incomes between $75,000 and $150,000 and over $150,000. One hundred respondents were interviewed in each group.

Highlights of the findings

While the survey results yield a great deal of pertinent information, the following six insights reveal specifics about planned gift donors that may be especially useful for gift planning professionals:

1. The top two reasons for making a planned gift to an organization are a belief in the mission and work of the charity and a long-term relationship with the organization or institution. Tax advantages ranked 11 out of 13 reasons/motivations for making a planned gift. This reaffirms earlier survey results that showed belief in a cause and a close relationship meant most to donors, with tax benefits trailing toward the bottom of the list of motivating factors. As the federal estate tax is being gradually eliminated over time, this data tends to confirm that bequests and other planned gifts should not be greatly affected by this change.

2. Respondents identified charitable bequests by will as the most well-known type of planned gift (90%), followed by charitable remainder trusts (78%), and gift annuities (69%). Only about half the respondents were familiar with a way to make gifts involving retirement plans or life insurance. This may indicate a need to place more emphasis on these methods of making gifts as part of one’s estate plans.

3. While over 90% of the respondents made annual gifts to charity currently, only 14% of respondents indicated that they had included estate provisions for charities. This finding is in keeping with IRS data that indicated that 18-20% of those with taxable estates leave funds to charity. The wide gap between current and deferred gift support represents an opportunity for gift planners to promote planned gifts.

4. Traditional “snail mail” was sited as the preferred way to be asked to make a planned gift. While we all live in an age of increasing internet usage, this finding may confirm what we already know. The amount of email is expanding exponentially and many would prefer to limit this form of communication to personal and business messages rather than unsolicited email seeking them to take a particular action. Traditional mail is a relatively inexpensive way to communicate to a large group of prospects on a constant basis. Regular communications over time has been a proven way to inform, educate, and motivate older long-term donors about planned gifts.

5. The survey also found that younger persons, including those in their forties, would include nonprofit organizations in their estate plans. While it is important to control the amount and timing of planned gift communications depending on age, wealth, and other factors, this information confirms that younger persons should at least occasionally be exposed to the concept of charitable bequests and other age-appropriate ways to make planned gifts. Perhaps an annual or semi-annual sweep of a larger pool of prospects should be considered.

6. Of those who have included charities in their long-range plans, only about one in five or six will notify the charity in advance. Many seasoned development officers have learned this through experience. Even though planned gift societies were mentioned as important by only 15% of the respondents, they do allow a mechanism for identifying planned gift donors and thanking those who want that type of recognition (see page 2 of the March 2006 issue of Give & Take).

Final analysis

The new survey supports the findings of the NCPG 2000 survey of donors which found that the primary motivations for making a planned gift were the specific charity and the work or mission of the charity, and that tax and other motivations tended to be of a secondary nature; charitable bequests are still the most widely understood planned gift, but there is a growing awareness of other options; mail still seems to be the preferred way for donors to be asked and thanked for planned gifts; and a growing number of younger persons are considering this type of activity. With longer life expectancies and lower rates of mortality, the amount of time and resources devoted to promoting planned gifts to 35- to 55-year-olds should continue to be relatively limited.

Overall, the survey results are helpful and provide additional guidance for those responsible for encouraging planned gifts.

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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