Time for a Check-Up? The Benefits of a Planned Giving Program Audit | Sharpe Group
Posted January 22nd, 2019

Time for a Check-Up? The Benefits of a Planned Giving Program Audit

by John Jensen

A comprehensive review of your planned giving program may be just what the doctor ordered.

Unlike major or annual giving programs, the results of gift planning efforts may, in some cases, not be seen for a while. As a result, it can sometimes be difficult to determine if an existing planned giving program is working as it should.

In addition, organizations considering beginning a new planned giving program may need guidance on what structure and strategy will be best for them. That’s why getting an outside look can often be helpful.

A planned giving program audit is a comprehensive review of an organization’s strengths and weaknesses. Audits are a way of discovering valuable information that can help drive your current and future marketing and donor cultivation efforts.

What’s involved in an audit?

A planned giving program audit analyzes all aspects of a program. Steps include:

  • Interviewing staff and senior management.
  • Comparing the organizational experience with industry norms, paying special attention to realistic income potential that would help determine the appropriate scope of planned gift development efforts.
  • Evaluating marketing materials and communication strategies to determine if they are appropriate and effective for donors.
  • Analyzing a series of multi-dimensional database reports to determine if gifts and estates are being handled systematically and proactively.
  • Studying estate administration and gift acceptance policies and suggesting improvements where appropriate.
  • Examining age and demographics of current and deceased members of a donor recognition society to determine effective stewarding practices.
  • Reviewing and analyzing an appropriate number of realized bequests to determine important metrics such as how many other charities are named in estates, whether any appear repeatedly and the ratio of residual to specific bequests.
  • Making a projection of reasonable gift planning potential.

Addressing challenges

One common problem in many organizations is that senior managers and volunteer leadership often have little direct experience with planned giving and, as a result, can have unrealistic expectations as to both revenue potential and appropriate cost factors.

An audit can help bring perspective to senior management regarding how a program can succeed over time and help set reasonable expectations.

Additionally, organizations often forego significant gift income because of ineffective estate management. It is estimated that charities may lose as much as 25% of an intended bequest between the donor’s death and the time the estate is settled. This happens as a result of many sources of “leakage” a charity will never recognize unless staff members are vigilant and know what to look for.

Other nonprofits incrementally move staff time and resources away from planned giving over time in favor of more short-term goals such as events and campaigns. This is a common mistake, and often management does not understand the real economic loss associated with neglect of important but less obvious uses of staff resources.

In the world of planned giving, expectations and results don’t always match. Issues not discovered and addressed can worsen and result in even more missed opportunities.

John Jensen

An outside assessment can help management tune up a program to ensure your donors don’t forget how much they value your mission when they are considering the philanthropic aspect of their estate and financial plans.

If you’re interested in learning more about how a planned giving program audit may be beneficial to your organization, contact us at info@SHARPEnet.com or call 901.680.5300. ■

John Jensen, CFP®, is a Senior Vice President and Senior Consultant for SHARPE newkirk.

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The publisher of Sharpe Insights is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Sharpe Insights may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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