In my experience, planned giving is affected by some things and not others.
Interest rates: The biggest influence on how gifts are made is interest rates. For example, low interest rates provide an incentive to set up gift annuities. High interest rates (traditionally associated with high inflation) provide a disincentive to set up fixed payment plans such as gift annuities and CRATs.
Perceived certainty: The biggest influence on whether to make a major gift is perceived certainty. In times of perceived uncertainty, individuals tend to sit on their hands … tend to avoid making major financial decisions.
2020 has been a year filled with uncertainty. The counter-balance is the certainty that your charity’s mission is important and requires funding.
Tax law: The tax law influences when to make charitable gifts. The federal income tax law operates on a calendar year. Hence, year-end giving.
Most important: Why to make a major charitable gift comes from inside the donor. It has little to do with external goings-on, except to the extent something happening external to the donor resonates strongly with the donor.
This gets us to the message charities should convey to potential donors. The message should address the WHY question. It should aim to stimulate a reason, a desire, to give.
That’s true today. It’s always been true.
Unfortunately for some charities, the message has gotten off-track this year. 2020 has been different for most charities. But the WHY message remains basically the same.
Annual fund: There is no good reason why a charity’s annual fund should suffer in the current environment … especially given the stock market. Annual giving, after all, is basically unaffected by “environmental” uncertainty.
Estate gifts: Where many charities should be having great success is with estate gifts … gifts that will come in and provide for the future. In a pandemic (the current one or any other), individuals meet with their lawyers to tune up their estate plans. Charities should be mindful of this.
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