Planned-giving data is often hard to come by, especially information about everyday donors. While the news media covers stories about multimillion-dollar bequests, information about average estate plans tends to live in desk drawers around the country — and it isn’t aggregated anywhere. But a new report from FreeWill, a company that provides free online estate-planning tools, offers a peek behind the curtain.
The report analyzes estate plans and bequests made through FreeWill’s platform from June 2017 to May 2019. During that time, 50,192 people completed free legal wills or documented their wishes to take to a lawyer. Almost 14 percent of the documents — 6,885 — included charitable bequests, totaling an expected value of more than $541 million.
The average size of a bequest was $78,630. Nearly 20 percent of wills with bequests included more than one. As a result, the average total giving made in wills with bequests was $108,482.
“Our data shows there’s broad-based giving across a lot of different kinds of people,” says Patrick Schmitt, co-founder of FreeWill. And for fundraisers, “expanding their reach is possible and can be quite profitable.” This is especially true as nonprofits invest in more digital outreach about planned giving for baby boomers and older donors, he says.
Confirming Long-Held Beliefs
Fundraisers have long known that older donors, especially those without children or close family connections, provide the bulk of planned gifts. This research affirms these observations.
Older people are the most likely to write a will. They are slightly less likely than younger people to include a bequest, but their bequests are much larger on average. Adults age 44 and older account for roughly 50 percent of the American adult population. But on the FreeWill platform, they created more than 75 percent of the wills and were responsible for more than 80 percent of the total value of all charitable bequests.
Parents who had only adult children were more likely to have a will and more likely to have included a bequest compared with parents who had at least one minor child.
Adults ages 25 to 44 represent about 35 percent of the population. Although they account for just 13 percent of bequests and a little more than 9 percent of bequest value, investing in this demographic is a low-cost opportunity that will likely pay off as these donors’ net worth increases and they continue giving throughout their lifetimes, the report states.
“Planned giving tends to be the highest ROI type of fundraising for most types of organizations,” Schmitt says. And with the anticipated generational transfer of wealth, he says, “if you ever plan to invest in planned giving, now is the moment. Organizations need to step up and take advantage of it.”
Among the other findings:
- More women made wills than men during the period analyzed, but the men who made wills were more likely to include a charitable bequest. And those bequests were more valuable.
- Fewer than 20 percent of FreeWill users made plans in their wills for their digital assets such as social-media and email accounts and digital photo albums. But researchers found that those who did have such plans were more likely to include a charitable bequest.
- The report also looked at frequency of bequests in each state and in Washington, D.C. Residents of the District of Columbia were by a large margin most likely to create a will that included a bequest. On average, D.C. had 42 bequests for every 100 wills created, nearly twice as the rate of Vermont, which had the next-highest share of bequests.
- Pet owners are 70 percent more likely to give through their wills, but the amount they plan to give is slightly lower than for people who don’t have pets. Less than 25 percent of FreeWill wills were written by pet owners, but they were 70 percent more likely to include a bequest compared with people without pets.
Eden Stiffman reports on nonprofit trends and fundraising for the Chronicle. She also writes a popular weekly fundraising newsletter with news, features, and trends. Email Eden or follow her on Twitter.
