Posted January 1st, 2005

Is the Third Time the Charm?

When you receive a request for a gift annuity proposal or other information from someone who has requested the same information one or even two times before but has yet to make a gift, what is your initial reaction? Are you skeptical? Do you wonder if it is worth your time and effort to create yet another proposal that most likely won’t turn into a gift? Are you inclined to respond to someone else first and move this prospect to the bottom of the list? If so, you may want to think again.

When reviewing requests for information on gift annuities or other planned gifts, it’s hard not to assign a lower priority to those who have repeatedly asked for information in the past but have never made a gift. Recently, however, a client reported a most interesting observation regarding their charitable gift annuity program. In reviewing the gift annuities that had been completed in recent months, they discovered that over one-third had been completed by those who had already entered into gift annuities with that organization in the past. Additionally, they learned that more than 50% of the first-time gift annuitants were persons who had requested information and/or had been sent one or more gift annuity proposals in the past but had never made the gift. A careful review of the respondents showed that many of these persons had not only previously requested information but had done so over a period of many years. Why might this be the case?

Again and again and again

Gift plans such as gift annuities can be particularly age sensitive in their appeal. As a result, the first time donors request a proposal, they may feel they are too young for a gift to offer an attractive payment rate and/or other obligations make them reluctant to make an irrevocable transfer. As time goes on, however, and as they age and continue to receive information with updated rate charts and examples that reveal greater payment rates and tax benefits, they may be more likely to seek updated information from you—and follow through with a completed gift.

Keep in mind also that part of the blame may belong with the development office. Earlier requests for information may not have been followed up on in a timely manner or lack of experienced staff may in the past have resulted in follow-up that proved to be of limited value. Consider too that at the time of a donor’s prior request for information, he or she may have been considering gift annuities from other organizations as well and may actually have completed an annuity with another charitable interest. As some donors choose to “diversify” their gift annuities by expanding to multiple organizations, a second or third request for information may be a signal that it is now “your turn.”

By the same token, keep in mind that the first request to your organization for information about gift annuities or other planned gifts may be just that—the first request sent to you. It may actually be the second or third time they have requested such information from others. In fact, they may have already received numerous proposals from other organizations. For that reason it can be a good idea when following up on proposals sent to first-time responders to first ask them if they have ever considered a gift annuity before. If they indicate they have received proposals from others in the past, you may want to alter how you proceed with a call. By asking this question, you might also learn that not only have they considered gift annuities in the past, but they have actually completed them with others.

What does this mean for you?

At a time when more organizations and institutions are emphasizing the benefits of planned giving among their constituencies, it is important to take all steps possible to maximize the returns on past as well as present marketing efforts.

Here are some steps you might want to consider:

1. Develop a list of all persons who have requested proposals for gift annuities over the past five years.

2. Carefully review the current gift activity of those persons and further segment the list to include those who have made a current gift during the relatively recent past—perhaps within the past two years.

3. Prepare an updated proposal for those persons with payment rate and tax information based on their current age.

4. Send them the updated proposal along with a letter explaining that because they have requested such information in the past, as a service to them you are sending updated material. Include a response device by which they can request more specific information.

5. In cases where a staff person has an ongoing relationship with the recipients of the “supplementary” proposals, consider a follow-up phone call where appropriate.

Experienced gift planning professionals know that those who have entered into gift annuities and other planned gifts in the past may be among the best prospects for an additional gift. Many are learning, however, that the same may be true of those who have requested information on one or more occasions in the past. Resist the inclination to follow up on first-time inquiries on the basis that others requested information in the past and never made a gift. Remember that gift planning concepts, while now familiar to you, may require more than one exposure before a donor develops an understanding sufficient for him or her to move forward to the completion of a gift.

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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