In last month’s issue of Give & Take, we initially examined a new survey commissioned by the National Committee on Planned Giving that sheds light on several aspects of planned gifts. We learned about what kind of planned gifts donors are making and why they make them. (See www.sharpenet.com for last month’s article.)
This month we delve further into what the survey findings might mean for gift planners as they devise marketing strategies for the future.
Bequest marketing efforts paying off
When it comes to informing donors about bequests, charitable organizations and institutions appear to be doing a good job. In fact, according to the survey, more donors (34%) say they first learned about charitable bequests directly from the charitable organization’s published materials than from any other source. Recommendations from advisors were mentioned in only 21% of the responses.
Bequest marketing efforts over the years are apparently working. Bequests were the most popular planned gift among the donors in the survey. Many donors seem to be reading and reacting to brochures, booklets, newsletters, and other materials on wills and bequests sent to them by charitable organizations. This would suggest those organizations with established bequest marketing programs should continue to communicate with donors on the benefits of bequest giving. Organizations and institutions that do not currently have active bequest communication efforts would be wise to make efforts periodically to get their “hat in the ring.” Bequest giving accounted for $15.6 billion in charitable dollars in 1999 and was the fastest growing source of gift income for higher education (bequest income grew 22% as opposed to an 11% increase for other forms of giving).
Another benefit of continuing bequest awareness efforts through mailings, ads, and articles is that it does not require a great deal of the gift planner’s time and energy. Preparation of marketing materials can largely be outsourced, leaving the gift planner with more time to devote to develop relationships with donors and other efforts that require his/her professional expertise. Mailings should include response devices that allow donors to reveal that a bequest has been planned or is being considered or to request more information on bequests and estate planning from the charitable organization. Responses may then lead to further contact with highly motivated donors, and the gift planner can then assist them with their specific questions and concerns.
Still more to do
The study revealed that less than half (42%) of responding households have wills. But it also found that 57% of respondents are considering making a will and 14% are considering including a charitable bequest in their plans. What do these statistics mean for gift planners? First of all, since over half of households do not yet have a will, gift planners must see this in a positive light as a great opportunity to tap a potential growth market. Charitable organizations and institutions should perhaps increase their efforts to promote estate planning education among constituents. Without a will there can be no charitable bequest, so communications that encourage planning can be key in increasing charitable bequest income in upcoming years.
Building rapport with advisors
Unlike bequest donors who said they relied on a charity ’s published materials to inform them regarding the gift they decided to make, 51% of charitable remainder trust (CRT) donors said they learned of this plan from their legal or financial advisor. A substantial number (26% of CRT donors), however, reported learning about the gift from the charity’s publications.
While some organizations may need to review or establish communication efforts to educate donors and friends about CRTs, the survey findings confirm the fact that it is very reasonable for a gift like a CRT to be initiated by a donor’s personal advisor. Most CRTs are funded in larger amounts, have more complex tax consequences, involve asset management issues, and may therefore flow more naturally out of contact with advisors.
The survey suggests that where CRTs are concerned, communicating and forming alliances with the legal and financial professionals in your area who may be involved with potential CRT donors as their clients may be a high priority activity. This is especially true of organizations that enjoy a substantial geographic concentration of donors where it is more likely they are interacting with a relatively small number of advisors who are readily accessible.
The focus should be on building personal relationships and communicating the mission of your organization. Some nonprofits have programs designed to educate advisors. This may be a good approach in some instances, but generally advisors have multiple sources of information regarding charitable gift planning and may, in any event, not consider your charity to be a natural source of educational materials devoted to highly technical matters. In many cases, the best way to communicate with local advisors may be to send them the same materials being sent to donors along with a note explaining that one or more of their clients may be receiving this and you are sending it to them as a courtesy. Oftentimes, the advisors may know little more than the donors and may be more likely to read something that they believe their clients may read and lead to questions from them.
Advisors routinely make donors aware of their right to retain the option to change the beneficiary of a charitable remainder trust. The NCPG study revealed that 70% of CRT donors have, in fact, reserved that right. For this reason, it can be important when working with advisors to make sure they understand that full recognition of gifts may not be available where remainders are revocable. It can be helpful for advisors to understand this. Remember, too, that a single CRT can have multiple beneficiaries and that it is important to remind donors that they can support your organizations and others through a portion of a CRT remainder.
A gender gap?
The NCPG study shows that while more women leave charitable bequests, CRTs are more likely to be created by men. To some extent, differences in life expectancies and social norms among older Americans may be driving these results. In the case of married couples, for example, in most instances wills leave most if not everything to the surviving spouse. Since many more women survive their spouses than vice versa, it is not surprising that more women are including charitable dispositions in their wills as they become the spouse responsible for the ultimate distribution of the property accumulated during their marriage.
In the case of CRTs, they tend to be entered into by couples in the age range where men have been the primary breadwinner and manager of family assets. With the aging of the baby boomers, these patterns may be expected to change. With more multiple marriages among baby boomers and more women with independent careers and asset holdings, we can perhaps expect the “gender gap ” to narrow in the case of bequests and CRTs. With spouses holding more independent assets, the first spouse to die may be more likely to leave bequests to charity rather than everything to the surviving spouse. More women may be expected to use their assets to create charitable remainder trusts, as well.
The differences in gender patterns among today’s older generation should be taken into account in marketing planned gifts, while gradually altering marketing approaches as the next generation of seniors begins to dominate the gift planning scene.
The future is bright
As we begin a new year, now may be an excellent time to review your marketing efforts and take steps to employ approaches that educate and motivate donors, as well as those professionals who may assisting them with their plans. Consistent, ongoing communication and cultivation of your constituents and their advisors will be the key to success in both major and planned gift development efforts in the future.