Donor-Centered Planned Gift Marketing

(AFP Fund Development Series)

Michael J. Rosen

• Publisher: Wiley
• Year: 2010
• Print ISBN: 9780470581582
• eBook ISBN: 9780470915332
• Edition: 1
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

A fresh step-by-step guide for identifying your nonprofit's planned giving prospects and inspiring them to give generously

Donor-Centered Planned Gift Marketing helps nonprofit organizations move beyond traditional marketing techniques that have historically yielded only modest results and reveals how putting the focus on the donor can produce the best outcomes for all. Here, nonprofits new to gift planning will learn to market effectively from the start while those with established programs will discover ways to enhance their efforts. You will learn about various donor-centered marketing channels and techniques, as well as how to generate internal support for an improved planned gift marketing effort.

• Full of useful and proven tips you can implement for immediate results
• Offers practical tools including forms and checklists
• Includes a worksheet to help organizations calculate their planned giving potential

Sharing the latest research findings, this book shows you how to identify who your planned giving prospects are. You will learn how to effectively focus on them through meaningful communication that ultimately inspires them to give-and give more.

CHAPTER 1

Introduction to Donor-Centered Marketing

Get wild with planned giving: Think of it as fundraising!

—Philip J. Murphy, Zimmerman Lehman

After reading this chapter, you will be able to:

• Understand that all nonprofit organizations can secure planned gifts.

• Define “donor-centered marketing.”

• Describe the potential for planned gift growth for the nonprofit sector.

• Debunk five common myths about gift planning.

• Explain the fundamental marketing steps of a successful gift planning program.

Donors and prospective donors are not geese. However, one can learn something about how to treat these individuals from Aesop’s well-known fable “The Goose That Laid the Golden Eggs.” In this tale, a man owns a perfectly ordinary looking goose that happens to lay eggs of gold. However, the man becomes impatient with the goose. He wants all of the gold the goose has to offer immediately. So, imagining that the goose must be made of gold inside, the man kills the bird to get the entire store of gold all at once. Unfortunately, the man discovers too late that his goose is really just like any other.

In Aesop’s fable, the man succumbs to greed. He focuses on his own needs and desires. In the process, his inward focus results in the death of the goose and the loss of a vast treasure of gold. If the man had simply taken care of the goose, seeing to its needs, and if he had remained patient, waiting for the goose to lay her eggs on her schedule, he would have become fabulously well off.

Take Care of Donors: A Lesson from Aesop

Development professionals can learn from this tale. While a nonprofit organization’s mission is of critical importance, one must not let it overwhelm consideration of donors. Development professionals must take care of the needs of donors and prospects while respecting their individual lifecycles and personal decision-making schedules.

“We have all heard of the Golden Rule—and many people aspire to live by it,” writes President of Assessment Business Center, Tony Allesandra. He continues:

The Golden Rule is not a panacea. Think about it: “Do unto others as you would have them do unto you.” The Golden Rule implies the basic assumption that other people would like to be treated the way that you would like to be treated. That is patently false. In fact, it could be argued that the Golden Rule is a self-centered rule—and not unlike a traditional salesman who assumes his product is right for his prospect and approaches the sale without considering the prospect’s needs. In sales—and relationships—one size (yours) does not fit all. With the Golden Rule, you run a greater risk of creating conflict than chemistry. After all, people have different needs, wants, and ways of doing things. The alternative to the Golden Rule is much more productive. I call it the Platinum Rule: “Treat others the way they want to be treated.” Ah-hah! Quite a difference. The Platinum Rule accommodates the feelings of others. The focus of relationships shifts from “this is what I want, so I’ll give everyone the same thing” to “let me first understand what they want and then I’ll give it to them.” Building rapport with people based on the Platinum Rule requires some thought and effort, but it is the most insightful, rewarding, and productive way to interact with people.¹

By shifting the focus from the organization to donors and prospects, development professionals will achieve greater success and organizations will receive far greater benefit. By helping donors and prospects discover their philanthropic passion and by showing them how gift planning can help them realize their philanthropic aspirations while taking care of their loved ones, development professionals can perform a great service for these individuals while serving and benefiting the nonprofit organizations that employ them.

This process is the core of donor-centered planned gift marketing. Penelope Burk, in her book Donor-Centered Fundraising, describes what she means by the term,

Donor-centered fundraising is an approach to raising money and interacting with donors that acknowledges what donors really need and puts those needs first. Donor-centered fundraising impacts fundraising success in three ways. First, it retains more donors longer, giving them time to develop their own philanthropic resiliency; second, it causes more donors to offer increasingly generous gifts; and third, it raises the performance of even the most active and loyal donors to a new standard. Donor-centered fundraising aims its sights at our two worst enemies in fundraising: attrition and stagnation.²

By contrast, traditional, organization-focused fundraising has often concentrated on:

• Tools including philanthropic instruments like wills, trusts, life insurance, and so on.

• Techniques including direct mail, face-to-face visits, telephone appeals, and so on.

• The needs of the charitable organization.

• The community.

• The cause.

While tools, techniques, organization need, community benefit, and the cause itself are all important, the fact is that it is donors and prospective donors that are most important in the philanthropic process. So, while this book will certainly address these other items, it will do so while recognizing the fundamental importance of maintaining a donor-centered perspective.

KEY CONCEPT

Always treat donors and prospective donors how they want to be treated. Keeping the focus on them will lead to greater benefit for the organization.

Planned Gift Marketing for All Organizations

Virtually all nonprofit organizations can ask for, receive, and benefit from planned gifts. Many already are. For the most part, those organizations that currently do not ask for planned gifts probably should, yet may not be doing so out of a misplaced sense of fear rather than any legitimate reason. For example, one misguided fear is that a bequest donor will give less to the annual fund. However, the Center on Philanthropy at Indiana University has found that bequest donors actually give more than twice as much annually as people who have not named a charity in their will.³ Among those nonprofits that are already seeking planned gifts, most can be doing a much more effective job of it. Regardless of one’s experience or the size of one’s organization, this book will help development professionals either create or enhance philanthropic planning programs while helping others better understand the marketing challenges faced by nonprofit organizations. While this book will not explore the technical side of philanthropic planning, it will provide detailed information about the marketing of planned gifts.

If one works for a small to mid-sized nonprofit organization, it is easy to think that the organization is too small to worry about marketing planned gifts with the expense of doing so incurred now while the return is garnered at some point in the future. If one works for a mid-sized to large nonprofit organization, it is easy to think that the organization has already mastered the art of planned gift marketing. However, both perspectives are incorrect.

While small to mid-sized organizations might not be prepared to speak with donors about a wide array of planned giving instruments, such organizations can certainly accept gifts of stock. In addition, they can also easily encourage donors to demonstrate their support through a charitable bequest. “Charities with mature planned giving programs estimate that deferred gifts, consisting primarily of bequests, make up 70 percent to 80 percent of all planned gifts,”⁴ writes Kathryn W. Miree, President of Kathryn W. Miree & Associates. So, if an organization does nothing else in the area of planned gift marketing other than promote bequest giving, it will have accomplished a great deal. Even large organizations can benefit from doing more to educate individuals about the value of bequest giving.

More complex gift opportunities can be established easily by working with a community foundation that offers a charitable gift annuity (CGA) program. Even for the smallest organizations, a CGA program may provide virtually no risk and limited expense. (A glossary of gift planning terms can be found at the end of the book.) Many community foundations around the country allow nonprofit organizations to market CGAs. A donor makes the gift to the community foundation and receives regular income from the community foundation. Upon the donor’s death, a fund is established and the income from the community foundation is given to the nonprofit organization.

While mid-sized to large organizations might already have sophisticated marketing efforts in place, learning about the donor-centered approach described in this book may help achieve even greater outcomes. One can discover a new idea or a new perspective in an old idea in this book. Or, current strategies and tactics might be validated by the text, which could prove enormously useful when budgeting and when trying to bring along others within the organization.

Percentage of Americans with a Planned Gift

It is difficult to estimate the percentage of Americans who have made a planned gift or planned gift commitment. For starters, there is some debate about what is and is not a planned gift. For example, some organizations consider a gift of appreciated stock to be a planned gift. After all, a gift of stock often avoids capital gains tax, may involve a financial advisor, and always involves an element of planning. Fortunately, a number of research projects over the past several years have helped the nonprofit community come closer to understanding how many individuals have made planned gift commitments and what the potential is for growth.

While most Americans have the ability to make a planned gift, the research reveals that relatively few have actually done so and that vastly more are willing to consider such gifts. This means two things. First, there is a significant gap in what traditional planned-gift marketing is achieving and what people are willing to consider. Second, traditional planned-gift marketing is just scratching the surface of planned giving potential.

By better understanding what the sector has achieved, development professionals will be poised to understand the overall potential for planned giving. Individual organizations will be able to do some very basic benchmarking while setting appropriate goals that take into account both what the sector is doing and what the potential for growth is.

Dr. Russell N. James, III, then of the University of Georgia Institute for Nonprofit Organizations, looked at the rate of planned giving among older Americans. Specifically, James studied charitable bequest giving since that is, by far, the most popular type of planned gift instrument. James found that among Americans over the age of 50, only 5.3 percent had made a charitable bequest upon death.⁵ This figure comes from data collected by the University of Michigan “Health and Retirement Study,” a longitudinal study from 1995-2006 sponsored by the National Institute on Aging that tracked the deaths of over 6,000 study participants. The 5.3 percent figure is one-third lower than the rate of bequest commitment cited in “Planned Giving in the United States 2000: A Survey of Donors” (NCPG). The 2000 survey reported that 8 percent of Americans surveyed had made a charitable bequest commitment. However, the figure—identified in the “Health and Retirement Study” and cited within Giving USA 2009—is within the margin of error cited in the NCPG survey report. For these reasons, this book will use the 5.3 percent figure when describing the percentage of Americans making a charitable bequest while recognizing that the figure might be somewhat lower if Americans under the age of 50 were included.

Looking at a less popular form of planned giving, the NCPG Survey found that 1 percent of those responding said that they have established a charitable remainder trust (CRT).⁶

Compellingly, the Center on Philanthropy at Indiana University found that 33 percent of respondents would be willing to consider a charitable bequest.⁷ The NCPG Survey found that 5 percent were considering a CRT. Figure 1.1 illustrates the difference between the percentage of donors with a bequest or trust commitment and the percentage of people willing to consider making such gifts.

The Stelter Company conducted a survey that found that once individuals know at least a little bit about various gift planning instruments or techniques, half of the individuals would be willing to consider making at least some type of planned gift or had already done so.⁸ During the 11-minute survey call, the interviewer quickly described six different gift planning options without going into great detail about any single option. While information clearly has an impact on what individuals are willing to consider, relatively little information is required in order to inspire a fairly significant increase in interest. H...

Table of contents

• Praise
• The AFP Fund Development Series
• Title Page
• Copyright Page
• Dedication
• Foreword
• Preface
• Acknowledgments
• CHAPTER 1 - Introduction to Donor-Centered Marketing
• CHAPTER 2 - Identify Who Makes Planned Gifts
• CHAPTER 3 - Identify What Motivates Planned Gift Donors
• CHAPTER 4 - Educate and Cultivate Planned Gift Prospects
• CHAPTER 5 - Educate and Cultivate Professional Advisors
• CHAPTER 6 - The Ask
• CHAPTER 7 - Stewardship
• CHAPTER 8 - Getting Started
• APPENDIX A - Planned Gift Program Potential Worksheet
• APPENDIX B - Bequest Confirmation Form
• APPENDIX C - Sample Internal Case for Donor-Centered Philanthropic Planning: ...
• APPENDIX D - Cost to Raise a Planned Gift Dollar Worksheet
• Glossary
• Notes
• References
• About the Author
• Index