Donors are showing increased interest in nearly all types of planned giving, and many are increasing the size of those deferred donations, according to a new survey from the fundraising consultancy Marts & Lundy and the National Association of Charitable Gift Planners.
Fundraisers from 328 nonprofits spanning a variety of causes responded to questions about how donors are giving and how planned-giving programs have responded since the Covid-19 pandemic began.
Sixty-two percent of respondents said interest in charitable bequests had grown, while 54 percent said interest in donor-advised-fund designations had increased. And a little more than half said donors’ interest in retirement-plan beneficiary designations had risen. Despite the fact that the Cares Act waived required minimum distributions for IRAs and retirement plans in 2020, 45 percent of organizations have seen greater interest in qualified charitable distributions, which are gifts older donors can make tax-free from their IRA accounts. Thirty percent of groups saw more interest in charitable gift annuities.
The report starts to quantify a trend that fundraisers have picked up on in recent months: The gravity of the Covid-19 crisis has donors contemplating the role charity will play in their legacies. And the pandemic has hit against the backdrop of a massive demographic and economic shift, as baby boomers age and prepare to pass trillions of dollars on to the next generation.
Many donors are increasing the size of their planned gifts or opting to fulfill some of their commitment earlier. Sixty-three percent of organizations have seen planned-gift donors raise their gift amounts during the pandemic. Nearly half have had donors choose to make some or all of their deferred gift outright.
Still, some donors are withdrawing their revocable planned-gift commitments. Twenty percent of respondents have seen some donors do so, 11 percent said some donors have delayed the arrival of deferred gifts, and 3 percent said some have decreased gift amounts.
Dollars from mature planned gifts and successful solicitations are consistent or better than they were this time last year. Thirty-two percent of organizations said gift-planning revenues had increased, and 53 percent said revenues had remained stable.
Although some fundraisers were wary of talking about planned giving in the early days of the pandemic, most organizations have continued gift-planning marketing without interruption. About half of nonprofits said they paused planned-gift solicitations at the outset of the Covid-19 outbreak, but organizations that paused have mostly resumed marketing by now, the survey found.
That’s paying off. Response rates to planned-giving communications have increased or remained stable compared with this time last year.
Among the other findings:
- Organizations are adapting to virtual donor visits. Most organizations are meeting with donors via phone (91 percent) or video (73 percent), and just under half are meeting with donors in person while social distancing. Fundraisers who are meeting with prospects in person said that those visits are rare and take place locally.
- Just over a third of respondents have adjusted their expectations for gift-planning officers due to the pandemic. Those who have made changes say they expect fewer solicitations and gift closures or fewer dollars raised.
- Even with gift-planning revenues fairly stable, budgets have been negatively affected. Nearly half of organizations have reduced the budget of their gift-planning program due to the pandemic by cutting program expenses or salaries or instituting hiring freezes. Only 26 percent of respondents have cut staff as a result of budget reductions.
