On the Road to Success in 2015

As economic conditions continue to improve, 2015 may be a banner year for charitable gifts—for those who are prepared to take the wheel.

As we race ahead to a new year, the Great Recession seems solidly behind us. Stock and many local real estate market values have hit record levels, unemployment rates have reached a six-year low and economic growth continues.

In this environment, there are a number of important actions that could be a roadmap to success in your fundraising efforts next year. At right are 10 areas that may deserve special attention in 2015.

1. Keep an eye on the economy. After a sustained period of downturn, the stock market has rebounded and reached record levels. While there is no guarantee the market will remain at these levels or grow, donors who were affected by the market volatility during the Great Recession may prefer gift plans that offer a greater degree of stability. Gift options such as unitrusts that are more affected by ups and downs in investment markets may be less attractive than plans such as gift annuities that feature a fixed, predictable source of income.

If the stock market maintains current values or continues to rise, gifts of appreciated stock and other securities will remain an appealing way for donors to maximize the impact of their charitable giving while bypassing capital gains tax.

Continued lower interest rates may affect the size of charitable gifts by reducing disposable income for seniors and may also lead to increased interest in fixed-income plans among older persons.

2. Maintain flexibility in planning. Don’t try to plan communications activities on subjects other than charitable bequests too far in advance. If interest rates and/or inflation increase beyond certain levels, interest in gift annuities may begin to wane. In that event, be prepared to quickly shift your plans accordingly.

3. Review minimum age and gift amounts. Take steps to ensure that your minimum age and gift amount policies still make sense in today’s environment. If you anticipate lower overall investment returns in coming years, it may be prudent to revisit minimum ages and/or gift amounts in order to reduce the risk of corpus or reserve fund exhaustion. Risks are generally higher in the case of younger donors receiving relatively high payouts or when managing large numbers of smaller gifts in which costs may mount over time and become too high a percentage of the aggregate fund.

4. Make sure your marketing materials are up to date. Review all marketing and donor communications materials in light of current economic conditions and any changes you may decide to make in gift amounts or ages. Make sure you are presenting examples that are appropriate for today’s environment. Avoid unnecessary detail that could render materials obsolete in the event of economic fluctuations, tax law changes and other environmental changes. With a $5.43 million exemption from federal estate taxes (nearly $11 million for couples) beginning January 1, 2015, avoid overemphasis on federal estate tax planning in marketing materials—information that will not affect most donors.

5. Stay focused on prior gift commitments. With increased charitable gift planning activity in both the nonprofit and for-profit sectors, now may be an important time to check in with your bequest and other planned gift expectancies. Remember that wills can be changed at any time, as can the remainder interest in certain charitable trusts and other gift plans.

6. Take care of your existing donors. As in the case of stewardship of bequest and other revocable gift donors, it is important to stay in contact with donors who have completed gift annuities and other irrevocable gifts in the past.

These experienced donors do not have to be educated in the workings of the gift. Simply pointing out how an additional gift may become even more attractive as donors age and are entitled to higher payment rates may lead to significant additional gifts.

7. Be consistent. Keep in mind that donors may need some time to digest planned gift concepts and that events in donors’ lives can determine how receptive they may be to a particular gift plan at any given time. That is why the quality and consistency of the exposure to gift planning concepts is important. Take the time to determine the appropriate group to receive information on various kinds of gifts and then put programs in place that ensure consistent exposure to the appropriate audiences over time.

8. Align board and management expectations. Over the past decade, senior management and volunteers have become increasingly aware of the wide range of possibilities for planned gifts. Therefore, it is important to make certain your leadership holds realistic expectation levels of what planned giving may mean for your nonprofit depending on the size, age and wealth ranges of your constituency and other factors.

9. Work internally with colleagues. Whether you work in a large or small shop, the future belongs to those who work with others on staff to ensure that various development efforts complement one another. In times when competition for the charitable dollar and expectations for results are both rising, unnecessary and destructive internal competition will be more costly than ever.

10. Highlight your mission. As gift planning has matured and developed as a vital source of funding for nonprofits, almost every organization and institution has ready access to virtually the same gift plans, payment rates and tax incentives. Emphasizing your unique mission and needs may be more important than ever.

We have come full circle back to the point where mission and stewardship of relationships will increasingly be at the forefront. Knowledge about and avail- ability of gift plans will be assumed as a starting point—the price of admission, if you will—to having a truly comprehensive development program.

This article is excerpted from the popular Sharpe seminar Integrating Major and Planned Gifts. Sharpe seminars continue to be the top-rated and best-attended training opportunities for gift planners. Plan now for any training you or your staff may need in the coming year.