I used this phrase recently in a presentation and someone raised his hand and asked, “What is a transom?” A “transom” is the crossbar above a door that might, in the days before air conditioning, have a window or fanlight above it to provide ventilation. The phrase “over the transom” referred to persons tossing unsolicited materials through the transom. Webster’s defines “over the transom” as “something that appears without solicitation or prior arrangement.” Thus the reference to bequests coming in “over the transom.”
It is certainly not at all uncommon for charities to receive bequests that are not known about in advance. In fact, in the case of some of the nation’s largest and most prestigious educational institutions that often enjoy relationships of half a century or more with their alumni, it is normal that they know about only one out of four bequests in advance.
In the case of organizations that have less personal involvement with donors and who may be involved for only a few years prior to their deaths, it is not atypical for them to know about only one in ten (or more) bequests in advance. Does that mean that efforts to encourage and discover bequests or commitments from similar estate planning vehicles are futile? Hardly.
Back to basics
Perhaps no documents are more personal in nature than a last will and testament, living trust, or other plan. Parents often do not even tell their own children the terms of their will, let alone charities or others that may be included.
The desire for privacy is just one reason donors choose not to disclose that they have included charitable bequests in their wills. Another reason is the desire for flexibility. I have heard donors say that they do not want charities to know of a bequest provision because their circumstances may change, they might have to alter their plans, and they do not want the charity to rely, to its detriment, on the bequest.
For these and other reasons, it should come as no surprise that often even those donors who are close to an institution will not want the charity to know about their plans. And, if they do, they may not want those plans publicly recognized. We should keep this in mind when considering the role of bequest recognition societies and other efforts aimed at discovering and recognizing bequest donors.
Additionally, efforts to discover and recognize bequests in advance that are primarily based on embedding the recognition of such gifts in ongoing capital and endowment campaigns will rarely uncover more than a fraction of the total bequest intentions, regardless of the amount of recognition. While this approach will work with some donors, it will almost always be a relatively small group.
It is important to have a multifaceted approach to encourage bequests, life insurance and retirement plan beneficiary designations, and other revocable estate gift commitments.
Marketing efforts designed to encourage and discover such gifts may be included in general donor communications, as part of personal visits where appropriate, through campaign strategies, and as part of targeted mail and other communication efforts.
Studies show that the average age when people make the final will that leaves a bequest to charity is normally in the 70 to 90 range. Wills completed earlier in life may include contingent charitable bequests (those that will occur in the event of a spouse predeceasing or other event), but these normally do not occur. In the case of married persons, most bequests that are received are included in the wills of the surviving spouses that were completed after first settling their spouse’s estate.
The last will is the important one, and in order to participate in that will, it is critical to be top of mind at the time it is completed. That means targeting information to persons at the appropriate point in life.
Mail and other traditional print media remain the primary means of communication with the 75-and-older age range, when the bulk of final bequest decisions are made. Over time, we can expect more web activity with that group, but at this point only a relatively small percentage of those over 75 are active online. For now, we must play the hand we are dealt.
What about response?
Although the number of responses received from marketing efforts is important, that is only a small part of the story. Just as only a small number of people who include charities in their wills choose to notify the charity in advance, likewise only a small number will request information or take a call to discuss their plans with a representative of the charity.
For those who have been marketing to the same group over age 55, by the time these donors are 75 they may have received 80 or more communications—all before they are even at the age to make their final will! They have had scores of opportunities to respond and may not have done so, primarily because the timing was not right. In these cases it may be wise to focus on increasing current gifts from middle-aged people with 20- or 30-year life expectancies and focus bequest development efforts on the oldest, long-term donors who may be more likely to think of a charity when they next visit their attorney and are asked, “Have your charitable wishes changed?”
A bonus for discovery
While most bequest donors will not tell you about bequests in advance, many of our most successful clients have learned that bequests that are known about in advance are on average two or three times larger than those that come in “over the transom.” Why might that be? First, many of the people who will tell you in advance are single persons with no children or other natural heirs. In many cases, they want the charity to know so that their wishes will actually be carried out. Second, some of them may not be as concerned about privacy and may be actively seeking recognition for their bequests during their lifetimes.
As noted earlier, left to their own devices, donors will often include as many as 10 charities in their plans. Advance notice of a bequest in response to effectively targeted marketing materials can impact this number.
Once donors have informed a charitable interest of their intentions, they tend to be cultivated and staff members are more likely to stay in touch. Because someone has expressed gratitude and is paying attention to them, they are far more apt to retain the charity in their plans—and often for a larger share. For instance, when a donor forms stronger relationships with four charities and is ignored by four others, on a final revision of the will the number of charities may be reduced to four instead of eight.
Because most of the largest bequests are residuary in nature (bequests of what is left after providing specific sums to others), the charities left in the will then split the remainder four ways instead of eight. The four remaining charities thus receive twice the amount they would have if all eight had relied on the “transom.” The charities removed are left out not because of what they did, but rather what they didn’t do. They may then find themselves suffering from a condition that could be referred to as a “blocked transom.”
Most charities that have been in existence for a number of years and have a core of dedicated donors will, in fact, occasionally receive bequests with little or no effort on their parts. But as time goes on, those that are more proactive in efforts to encourage, discover, and carefully steward relationships may find themselves more often being elevated to the status of family members and included in wills—and staying there.
Editor’s note: This is excerpted from the “Macro Marketing” session in the Sharpe seminar “An Introduction to Planned Giving.”