Whether you call it a Heritage Society, Legacy Society, or a name associated with your mission or history, you most likely have, or need to establish, a recognition society that honors those who have made a long-term gift commitment. Membership in these societies is usually reserved for donors who have arranged for a gift through a bequest provision, gift annuity, trust or other life income gift, lead trust, life insurance or retirement plan gift, or other planned gift arrangement.
In many cases donors receive specific benefits when they become a member of a planned gift recognition society, such as personal mementos like lapel pins or plaques and/or invitations to special events such as luncheons and informational seminars. While donors may enjoy certain rewards from a recognition society, the eventual charitable recipient is the one that will benefit the most from creating and maintaining a donor recognition society.
Simple morale booster
Having a recognition society for planned gift donors lets them know you appreciate them and the gifts they have made. Donors who make planned gifts have most likely given in the past and, as such, may have grown accustomed over the years to being a member of a particular gift recognition society. Acknowledging donors for their planned gifts as well with special, separate giving societies is an easy way to show them they are important. Such programs also allow you to continue to recognize them publicly for their forethought and generosity—even as they may be reducing the amount and frequency of their current gifts.
Strengthening the ties that bind
Simply by the nature of most planned gifts, a person has made a long-term commitment to a charitable recipient, raising it to the level of a friend or family member. Maintaining a recognition society allows staff to keep in touch with planned gift donors and, therefore, provides an additional opportunity to strengthen long-term relationships with them.
Perhaps you invite recognition society donors to an annual luncheon in their honor. Or your CEO may host a holiday reception for these special donors. They may also be included in broader recognition events that have already been scheduled. A recognition society can provide more continuity of contact, which in turn can create opportunities to meet with your supporters and get to know them better one-on-one. And once you learn more about your donors, you may be in a better position to help them discover other planned gift ideas that may be of interest to them.
Reduce the risk of removal
If an organization is inattentive to donors of planned gifts due to staff turnover, poor record keeping, or other factors, it runs the risk of alienating them and perhaps losing their gifts altogether. Keep in mind that many planned gifts are revocable. For example, a bequest provision or retirement plan beneficiary designation is easily changed during the donor’s lifetime, as are the remainder interests of many otherwise irrevocable charitable remainder trusts.
With an effective, ongoing recognition society in place, you can reduce the risk of being removed from a donor’s estate plans. As noted above, planned gift donors may be reaching the age at which their current giving may be decreasing. A planned gift recognition society can be key to managing the natural “downgrading” of donors. The society provides a way to continue to acknowledge a donor’s past and future involvement. In addition, you may see more planned gift commitments from prospective donors when they see that planned gift donors—not just donors of current gifts—are also given the recognition they deserve.
Conduct a reality check
No matter how many “benefits” you offer to donors through membership in a planned gift recognition society, realize that few people will face mortality, change their estate plans, and/or incur a legal fee to make a gift that “earns” them a lapel pin or certificate. As a matter of fact, many bequest and other planned gift donors will never tell you of their gift during their lifetime, and a percentage of others who do inform you will normally wish to remain completely anonymous and may not want to participate in a recognition society—publicly or at all. Informal surveys have shown that, at most, 20-30% of estate donors will inform you of their gift provisions in advance. For many broad-based organizations, that percentage may easily be 10% or less.
Though relatively few planned gift donors will provide advance notification of their gifts, and many of those who do tell you may not want recognition, the donor recognition society remains a vitally important tool in managing gift planning relationships. Those who will inform you of their gift commitments and who do enjoy membership in your recognition society are a very special group. They have set themselves apart and are demonstrating to you that they want to be more involved with you during their lifetime. This increased level of dedication may be the reason why studies have also shown that bequests received from donors who informed charities in advance of their bequest, whether or not they accepted membership in a recognition society, are often two or three times the amount of bequests received from those who do not notify charitable interests in advance of their gift.
So while your recognition society may honor only a relatively small group of bequest and other planned gift donors, remember that this type of relationship building can help strengthen and cement long-term donor friendships, which can lead to significant additional gift income in the future.
Editor’s note: The preceding article is excerpted from Session X of “An Introduction to Planned Giving.” See www.sharpenet.com/seminars for the latest information about upcoming Sharpe training opportunities.