Most successful development professionals realize the importance of establishing and maintaining a recognition society that honors planned gift donors. Much like the donor societies that honor current contributors, planned gift recognition societies provide a way for an institution to strengthen long-term relationships with donors who have made a commitment through a bequest provision, retirement plan or life insurance, life income gift, lead trust, or other gift planning arrangement.
The benefits of having a donor recognition society specifically for planned gift donors are clear: They help cement relationships with donors, allow an organization to properly thank donors through special events or listings in donor publications, provide a memento symbolic to the organization or institution, and facilitate continued contact with donors who may be reaching the age at which their current giving may be decreasing or lapsing entirely.
While most agree that appropriate recognition of planned gift donors is critical, there is some disparity when it comes to the specifics of membership in such societies. Who should be included? Should there be a minimum gift amount for membership? Should the donor have to provide the organization with copies of wills, trusts, or other documents to prove the gift has been arranged? How tangible should the benefits be?
Inclusive vs. exclusive
Recognizing donors for their planned gifts with a special, separate giving society is an effective way to keep in touch with planned gift/bequest donors. Such societies also help an organization discover those who may have never told you about existing planned gift provisions, and also aid in the retention of those provisions.
Once you have discovered that someone has created a planned gift or bequest to benefit your organization, what is the next step? Are they automatically admitted to the planned gift recognition society?
The guidelines for admission into a planned gift recognition society can be simple—make the group as inclusive and easy to join as possible. If a donor let’s you know that she has left a gift to your organization in her will, estate plans, or through another gift planning arrangement, then she should be invited to join your recognition society with no more questions asked.
“You want to encourage people to let you know about their planned gifts,” says The Sharpe Group’s Barlow Mann, “not discourage them with various restrictions. Once they have joined, you may discover additional information about the gift in the future.”
Some organizations require “proof ” of a planned gift intention, such as a copy of the page of the will or trust that includes details about a donor’s gift. Some programs decide that this practice may not be the wisest way to proceed with a donor who has made a long-term, often revocable, charitable commitment.
“I was speaking with a development executive who had received a broad-based communication on the subject of charitable estate dispositions from a university she attended,” says Robert Sharpe, president of The Sharpe Group. “She has named the institution to receive her life insurance proceeds in the event of her death. She notified the institution of this fact and in response was asked to produce ‘proof’ that she had made this commitment so she could be included in the institution’s estate recognition society.
“The development executive/donor was quite perturbed and shared the fact that she was considering changing her plans. She noted that even if she sent ‘proof,’ she could always change the beneficiary at any time following the notification,” Sharpe says.
Since most bequests and other planned gift commitments are revocable, there is little to gain in asking for “proof” of a planned gift, but there is much to lose—both the relationship with committed donors and their future gifts (and any current gifts they may have made along the way). Such a policy may be seen as “forward” or even intrusive in some cases.
Other policies may be more proper in the context of a capital campaign or other special development efforts where recognition is being given for the gift and/or the institution will rely on the commitment when planning for future spending.
Other institutions favor setting a minimum dollar amount on gifts in order to be included in such societies. “When organizations promote a dollar amount minimum for joining a planned gift society, this could cause problems in a number of ways,” says Mann. “First, donors who initially may have been considering a larger gift may reduce their amount simply to meet the minimum requirement for society membership. Second, many of the largest bequests to nonprofits are in the form of residuary bequests that are satisfied only after fulfilling specific bequests to others. In those cases it is difficult, if not impossible, for a donor to know the amount of the bequest that will eventually be received. For that reason, it is important that planned gift recognition societies not inadvertently discourage such gifts by requiring the disclosure of a specific amount.”
Trust your donors
When someone tells you that they have included you in their will or other long-range plans, think about what this means. A high level of donative intent—and trust—is required to make a decision of this magnitude. Usually only a small percentage of those who have acted will let you know. Many prefer privacy, others may want to change their plans later, and some do not want you to count gifts that may or may not be a sure thing depending upon the circumstances.
Just as the donor’s gift shows their trust in an organization, gift development professionals must extend the same, or more, trust to the donor. That is why many programs take the position that when a donor lets you know that they have included your organization in their will or other planned giving vehicle, this should be enough to trigger an invitation to join your recognition society.