Planned giving is booming even as overall charitable support is on the decline: Donors gave $42.7 billion through bequests in 2023, and that figure is expected to keep growing as baby boomers reach their golden years and older Gen Xers approach retirement age.
Yet not all nonprofits have active legacy-giving programs in place; instead they favor fundraising for the present over the future. That’s a huge missed opportunity, experts say. Most bequests and other planned gifts are unrestricted, so securing these contributions is an excellent way to build a healthy future for your nonprofit. Plus, cultivating legacy donors helps strengthen ties with loyal supporters and increase revenue in the near term.
“Almost every organization needs a planned-giving program,” says Meg Roberts, a veteran fundraiser who has focused on legacy giving for 25 years. “Creating a longtime relationship with donors helps to raise all [revenue] income levels. Annual giving increases significantly once someone discloses a planned gift. It is the tide that raises all boats.”
Roberts and two other experts shared their advice with the Chronicle about how to build a strong planned-giving program or bolster your existing strategy. Here are their top tips.
Get leadership buy-in for the long haul.
Roberts estimates that it can take seven to 10 years of marketing before a planned-giving program pays off. Organizations with an older average donor age will likely see results faster, but every charity will benefit from being patient.
It can take seven to 10 years of marketing before a planned-giving program pays off. Every charity will benefit from being patient.
That means a nonprofit’s leaders have to agree to a longer timeline and then recruit and retain qualified staff members to guide the program. The personnel costs of starting a legacy-giving strategy may seem initially daunting to those in charge, but you can make a persuasive argument that it will more than pay for itself quickly.
For any nonprofit in need of support for its long-term strategic plan, investing in legacy giving should be an easy yes, says Roberts. It will lay the groundwork for your organization’s future financial health: “The best practice is to have planned gifts go to the endowment, which uses someone else’s life savings to add to your organization’s life savings.”
You don’t need a deep bench of major-gift donors, either. If your fundraising team already has a pool of annual donors your staff has been cultivating, then tacking on a planned-giving program is the perfect complement, says Roberts. “We know now that the majority of planned gifts come from direct mail reaching small, longtime donors,” she says. “Investing significantly more into direct-mail campaigns is a way to reach donors who want to talk to you.”
Finally, the benefits are not limited to the future. Once a donor discloses their intention to leave your group money in their will, she says, they become more invested in your cause. This enthusiasm translates into a higher likelihood that they’ll give in the present as well, so they can see the payoff of their giving during their lifetime.
Patty Wang, executive director of development and gift planning at the University of Maryland, agrees that having the executive suite’s patience is paramount to making a legacy-giving campaign successful. “Sometimes it’s a long runway, and an institution has to invest in planned giving for the long gain,” Wang says. Smart leaders recognize that bequests and other legacy gifts are “the pot of gold at the end of the rainbow,” she says.
Smart leaders recognize that bequests and other legacy gifts are “the pot of gold at the end of the rainbow.”
There are times when chasing planned gifts may be more difficult, Wang says, such as during sharp economic downturns or when your organization needs to prioritize raising cash for today. But with the stock market and housing values hovering near record highs, older donors might have more in assets now than ever, she says, so it’s the ideal time to approach these supporters about their estate plans if you haven’t already done so.
Write a versatile gift-acceptance policy.
Fundraising teams are primed to accept gifts and pledges of money, but there are many other types of valuable assets a donor may be interested in giving that aren’t liquid. This could include a vacation home, investment properties, shares of stock, or artwork.
Develop a gift-acceptance policy that includes guidelines for both cash and non-cash gifts, recommends Wang.
While the majority of planned gifts come via traditional methods, like bequests or charitable gift annuities, her institution’s gift-acceptance policy puts “a foot in the door to the more complex, donor-savvy vehicles such as donor-advised funds, non-cash assets, or gifts in kind.” Your organization can take steps now to prepare for how it will handle uncommon donations — and remember to solicit them.
Wang recounts the story of a longtime faculty member, Charles Misner, who found a stash of letters signed by the late physicist Stephen Hawking during an office cleanout. The professor donated his old friend’s letters to the university, which commissioned the auction house Christie’s to sell them in an online, international bidding war. The auction netted nearly $300,000, and the donor directed the proceeds to create an endowment for physics research.
The university’s comprehensive gift-acceptance policy was what made this all possible, Wang says: “If there’s a way we can do it, we can make it happen. Don’t let donors think, ‘I didn’t know I could donate that.’”
Partner with peer charities.
To broaden the pool of donors who are willing to include your organization in their estate plans, consider working with similar nonprofits to seek legacy donors. They are not your competition, but potentially valuable allies in cultivating bequests and other planned gifts.
Other nonprofits are not your competition, but potentially valuable allies in cultivating bequests and other planned gifts.
Lisa Hacker, director of philanthropic planning at the Jewish Federation of Cincinnati, reports that her organization is one of dozens of affiliated Jewish groups in southwest Ohio that collaborate on soliciting endowment gifts through the Create Your Jewish Legacy website.
Pioneered by the Harold Grinspoon Foundation to streamline planned giving, the concept is straightforward: Make it simple for donors to select which charities they’d like to support on a single form. Currently, donors can choose from 24 organizations, spanning Jewish day schools and camps, college campus Hillel affiliates, Jewish community centers, family service groups, museums, and synagogues in Cincinnati. Supporters might check off four or five of them to share their planned gifts.
The form allows donors to specify whether they want to define a dollar amount or a percentage of their estate. Between 50 and 60 percent of supporters offer a percentage, which is a boon for the recipients — Hacker says donors most often underestimate what their estates will be worth at the end of their lives.
All of the participating organizations promote the program, both individually and together on NPR during the Jewish holidays of Rosh Hashanah, Hanukkah, and Passover. Once legacy gifts are collected this way, the federation puts a personal stamp on its celebrations of donations. “We do a lot of show-and-tell,” Hacker says. “We like to explain to donors using data, pictures, testimonials from other donors, and site visits to show them what today’s needs are as well as future needs.”
Her team records and shares videos of donors, giving them the opportunity to voice what they hope their legacy will be, and prominently displays the testimonials on touchscreens in the lobby of its headquarters. “They are a nice keepsake for the donor’s family,” she says.
Don’t forget about younger donors.
Plenty has been written about the impending wealth transfer from baby boomers to their heirs, and by now, many seniors have already solidified their estate plans. But there is another group of people nearing retirement age: Generation X, or people born between 1965 and 1980.
The years leading up to retirement are an inflection point where people often begin to refine their wills, Roberts says, and the oldest members of Gen X will turn 60 next year. However, securing estate gifts from donors in this cohort requires a different strategy. “It’s a huge adjustment in how we approach Gen X donors,” Roberts says. “They don’t tend to be the same kind of mail-lovers that the baby boomers have been.”
She says reaching baby boomers by phone has historically been fruitful, but fewer people in Generation X have landlines. Some organizations have gotten results by incorporating text messaging into their marketing plans. “Gen X is much more digitally savvy, so we need to get a lot more digitally savvy with our marketing to them,” she says. “Including digital components in your planned-giving marketing is vital.”
Hacker says her organization is also increasingly hearing from Gen X donors — and millennials as well. “We’re definitely seeing the next generation coming through,” she says, “and even people in their 30s and 40s as they are having children and making their wills. It’s top-of-mind for a lot of the Jewish agencies in Cincinnati.”
Use peer-to-peer outreach as a secret weapon.
One of the most powerful ways to solicit a planned gift is having the ask come from a friend instead of a gift officer.
One of the most powerful ways to solicit a planned gift is having the ask come from a friend instead of a gift officer.
Hacker says her group has a planned-giving and endowment committee, comprising 10 volunteers who help with solicitations on the federation’s behalf. The group trains these volunteers and suggests talking points to help them secure new legacy commitments. “Some of our greatest success is when a community member with a personal relationship asks their peer to ‘join me’ in making a meaningful and lasting gift to the federation,” she says.
At the University of Maryland, the Founders Legacy Society hosts events on campus, including an annual luncheon that invites committed donors and prospects to mingle, says Wang. Typically, a professor delivers remarks and the university’s president and other notable faculty are featured speakers. This year’s theme is “The Makers of Maryland,” highlighting innovation and research at the university through presentations by student ambassadors to demonstrate what they’ve accomplished during their studies.
These events connect philanthropic alumni with each other and help potential donors visualize what their collective giving can achieve for current students, Wang says. “We’re trying to illustrate the impact of their giving and the difference they are making.”
Beware of ethics pitfalls.
Be very clear about the ethics of soliciting planned gifts and write a detailed ethics policy to govern your strategy, experts say. If there is one thing you should never do when securing a bequest, it’s letting it become an unwelcome surprise to the donor’s heirs when the will is read.
Wang warns of using undue influence on donors at very advanced ages or with complex medical conditions. “We have to be really careful when we have these conversations to ensure that family members or financial advisers are close by,” she says. “Don’t do anything that calls into question a gift officer’s motivations or ethics.”
As an example, she describes a situation where a well-meaning employee on her team wanted to give a homebound donor a ride to her lawyer’s office to update her will. Even though the gift officer’s intentions were pure, Wang says, it wasn’t a good idea. “Maybe we can call her an Uber,” she jokes.
