While there are any number of important actions you might consider now to help assure success in your programs this year, here are nine areas that may deserve special attention during 1999.
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 in all likelihood be more receptive to gift plans that offer a greater degree of certainty. Plans such as unitrusts, pooled income funds, and other gift vehicles that are more affected by ups and downs in investment markets, i.e. a “bumpier ride,” may be less attractive than plans that feature a fixed, predictable source of income.
Lower interest rates can have a number of different effects on charitable giving. They affect the size of charitable deductions, reduce disposable income for seniors, and lead to increased interest in gift annuities among older persons.
On the other hand, lower interest rates are leading to increased disposable income for younger persons who are enjoying the impact of lower mortgage rates, and they can make charitable lead trusts much more attractive to wealthier donors of all ages. (See In The News for more information on the effects of lower rates on charitable gift planning vehicles.)
2. Maintain flexibility in marketing activities. Don’t try to plan communications activities on subjects other than charitable bequests too far in advance.
While interest rates are low, emphasize gift annuities, charitable lead trusts, and other plans that are more attractive in such an environment. If interest rates rise, be prepared to quickly shift your plans accordingly.
3. Review minimum age and gift amounts. Take steps to assure 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 increase 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 if you are managing large numbers of smaller gifts where costs may become too high a percentage of the aggregate fund and thus lead to increased risk.
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 that 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.
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.
Consider also the fact that in the case of most charitable remainder trusts created by donors with the help of their advisors, donors retain the right to change the charitable remainder beneficiary of their trust. One of the biggest mistakes can be to neglect donors who have notified your organization of their intentions for gifts via their wills and/ or other revocable gift instruments.
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 irrevocable deferred gifts. These persons can be among your best candidates for new gifts. It is much easier to motivate an additional contribution to a charitable remainder unitrust than it is to create a new trust.
Similarly, gift annuity and pooled income fund 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 planned gift concepts can take time to understand 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 assure consistent exposure to the correct groups over time.
8. Align board and management expectations. Over the past decade there has been a unprecedented increase among senior management and volunteers in the awareness of the possibilities for planned gifts. That is the good news. To ensure that 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.
And speaking of competition, remember that 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.
So as 1999 opens, 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 1999 and result in abundant dividends in coming years.