1. Monitor economic conditions very closely. There have been significant fluctuations in stock and bond markets in the past year. If these trends continue, donors will remain more receptive to gift plans that offer a greater degree of certainty. Plans such as uni-trusts and other gift vehicles that are more affected by ups and downs in investment markets—plans that can provide a “bumpier ride”—may hold less appeal than gift annuities, annuity trusts, and other plans that feature a fixed, predictable source of income. This may be particularly true this winter as older donors strive to cope with post-Katrina fuel costs.
2. Maintain flexibility in marketing activities. Don’t try to plan communications activities on subjects other than charitable bequests too far in advance. If interest rates continue to rise, it may be wise to consider “dusting off” pooled income funds and other planning vehicles that allow donors to hedge against higher interest rates. If interest rates and/or inflation increase beyond certain levels, interest in gift annuities may begin to wane. In that event, be prepared to quickly shift your plans accordingly.
3. Review minimum age and gift amounts. Take steps to ensure that your minimum age and gift amounts still make sense in today’s environment. If you anticipate lower overall investment returns in coming years, it may be prudent to revisit minimum ages and/or gift amounts in order to reduce the risk of corpus or reserve fund exhaustion. Risks are generally higher in the case of younger donors receiving relatively high payouts or when managing large numbers of smaller gifts in which costs may become too high a percentage of the aggregate fund.
4. Bring marketing materials into line. Review all marketing and donor communications materials in light of current economic conditions and any changes you may decide to make in minimum gift or age amounts. Make sure you are presenting examples that are still realistic in today’s environment. Prepare or purchase materials with a view toward shelf life. Avoid unnecessary detail that could render materials obsolete in the event of economic fluctuations that lead to different payment rates, tax law changes, and other environmental changes. With a $2 million exemption from federal estate taxes ($4 million for couples) beginning January 1, 2006, watch for overemphasis on estate tax avoidance in your marketing materials—information that will increasingly fall on deaf ears.
5. Stay on top of expectancies. With increased gift planning activity in both the nonprofit and for-profit sectors, now may be an important time to “check in” with your bequest and other planned gift expectancies. Remember that bequests via wills can be changed at any time. With increased estate tax exemptions, more and more persons who have been waiting for estate tax repeal will enjoy it as of January 1 and will be changing their estate plans in some cases to enjoy greater flexibility.
6. Encourage repeat gifts and additional contributions. As in the case of stewardship of bequest and other revocable gift donors, it is important to keep in contact with those donors who have already completed gift annuities and other irrevocable deferred gifts. These persons may be among your best candidates for new gifts. It can be easier to motivate an additional gift annuity than a first-time gift.
These donors do not have to be educated in the workings of the gift. Pointing out how an additional gift annuity may be even more attractive as donors grow older and are entitled to higher rates may lead to significant additional gifts in a period when returns from fixed investments have been trending downward.
7. Be consistent in marketing activities. Keep in mind that donors may need some time to digest planned gift concepts and that events in donors’ lives can determine their level of receptivity to a particular plan at any given time. That is why the quality and consistency of the exposure of gift planning concepts is more important than the quantity. Take the time to determine the appropriate group to receive information on various topics, and then put programs in place that ensure consistent exposure to the correct groups over time.
8. Align board and management expectations. Over the past decade, there has been an unprecedented increase among senior management and volunteers in the awareness of the possibilities for planned gifts. That is the good news. In light of current economic and other environmental conditions, to ensure this continues make certain that your leadership has a realistic expectation level for what planned giving may mean for your organization or institution. Depending on the size of your constituency, age and wealth ranges, and other factors, the realistic expectations for bequests and other planned gift income for various organizations may be very different. Be proactive in attempting to set expectation levels where they may better reflect the success of your efforts.
9. Integrate development efforts. Whether you work in a large or small shop, the future belongs to those who work to make various development efforts complement one another whenever possible. In times when competition for the charitable dollar and expectations for results are both rising, unnecessary and destructive internal competition will be more costly than ever.
As gift planning has matured and developed as a vital source of funding for nonprofits, almost every organization and institution has ready access to virtually the same gift plans, payment rates, and tax incentives. Emphasizing your organization’s unique mission and needs may be more important than ever. So as we begin 2006, we may find that we have come full circle back to the point where quality of mission and the stewardship of relationships will be in the forefront. Knowledge about and availability of gift plans will be assumed as a starting point—the price of admission, if you will—to having a truly comprehensive development program. These are just a few ideas to serve as a checklist of things to consider as you begin the new year. A minimal amount of time invested in careful planning and coordination of your activities now can help assure success in 2006 and result in abundant dividends in coming years.