While there are any number of important actions you might consider now to help assure success next year, here are 10 areas that deserve special attention.
1. Monitor economic conditions very closely. After a sustained period of downturn, the stock market has regained ground recently. While there is no guarantee the market will remain at these levels or grow, donors who were affected by the market’s recent volatility may prefer gift plans that offer a greater degree of certainty. Gift plans such as unitrusts that are more affected by ups and downs in investment markets, i.e. a “bumpier ride,” may be less attractive than plans such as gift annuities that feature a fixed, predictable source of income.
Continued lower interest rates will continue to have a number of different effects on charitable giving. They affect the size of charitable deductions, reduce disposable income for seniors, and can also lead to increased interest in gift annuities among older persons.
2. Don’t forget about gifts of securities. As noted on page 1, gifts of publicly traded securities are a major source of philanthropic support for many institutions. Donors looking for the best ways to give should be reminded that gifts of appreciated securities and other assets can yield special tax benefits. Donors who have “newly appreciated” or “reappreciated” securities should be reminded that it may be best to make gifts using this property and use their cash to diversify their investments or rebalance their portfolios.
3. 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.
4. 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.
5. 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 factors.
6. 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 wills, trusts, and other beneficiary designations can be easily 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 beneficiary.
7. 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 who have already completed irrevocable deferred gifts. These persons can be among your best candidates for new gifts. Many have found it is easier to motivate an additional gift annuity than to complete a first-time gift.
8. 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 interest in 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. Not only will this approach yield greater results, but it may also lead to reductions in marketing expense.
9. 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. 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.
10. Integrate development efforts. Whether you work in a large or small shop, the future belongs to those who continually strive 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, many organizations and institutions have ready access to the same gift plans, payment rates, and tax incentives.
So as 2010 opens, we may find that we have come full circle back to the point where 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 2010 and result in abundant dividends in coming years.
For more ideas on how to succeed in the challenging fund-raising environment that lies ahead, consider attending Sharpe’s newest seminar, “Philanthropy in 2010—Meeting the Challenges.” See pages 2 and 3 for more information.