FAQ Making Planned Giving Work for You Making Planned Giving Work for You Contents Gift Types...1 Donor Behavior...2 Planned Gift Marketing...2 Getting Started...4 Questions about the Webcast...5 In March, 2005, more than 900 nonprofit professionals registered to attend the Blackbaudsponsored Webcast, Making Planned Giving Work for You, and several hundred sent questions during or following the seminar. Our host, Lawrence Henze, has responded to the most frequently asked questions below. In case you missed our seminar, please feel free to access the archives at http://plannedgiving.blackbaud.com. Gift Types 1. What is a charitable gift annuity? A charitable gift annuity is an irrevocable transfer of property (e.g. securities) in exchange for a contract to pay the donor an annuity for life. Because the value of the property exceeds the value of the annuity, it is partially a gift to the institution. 2. What is a bequest? A bequest is a provision in a will or estate plan that allocates all or part of the individual s estate to a designated charity. 3. What is a charitable remainder trust? A charitable remainder trust is an irrevocable trust that pays a specified annual amount to one or more people for a fixed period of years (often the life of the individual). At the end of the term of the trust, the remaining trust assets are distributed to the charity. A charitable remainder annuity trust provides a fixed payment; a charitable remainder unitrust pays out a fixed percentage of the trust value each year. 4. Does planned giving include in-kind giving? No. Our research into planned giving includes the gifts described above: annuities, trusts, and bequests. Life estates are planned gifts, as are gifts of paid-up life insurance. We do not consider a gift of life insurance that requires ongoing contributions towards the premium amount to be a planned gift. 1 5. Why do you think the bequest is still the most common type of planned gift? I can think of several reasons. Bequest provisions can be the simplest planned gifts to make, and although I do not advise this strategy, may be done by the donor without legal assistance. Second, because the institution does not need to be notified prior to being designated as a charitable beneficiary, the donor may make the bequest and not surface on the organization s radar screen. Finally, the donor may satisfy his/her donative intent without risking current assets or income stream minus legal costs to draft a will, the bequest costs the donor nothing. A bequest fits a conservative investment lifestyle.
Donor Behavior 1. Why do you think 80% of bequest donors do not inform the recipient of the bequest? For the most part, these donors have been loyal contributors who favor a conservative lifestyle. They are often humble and do not call attention to their behavior. They do not seek recognition. Some wish to satisfy their charitable needs but not self-identify to the recipient organization s development staff. 2. Where does one find data on an individual s credit usage? Unless your organization offers credit cards to your constituencies, the credit behavior of individual donors is protected by privacy laws. For analytical purposes, you may access zip+4 aggregated credit behavior; the data is averaged across the approximately ten households that comprise zip+4 clusters in the United States. 3. Do planned gift donors prefer online and EFT giving or checks? Research reveals giving by check is still preferable, but as EFT and online giving increase in popularity, we may see a change. I suspect but cannot prove that small EFT contributors will be valuable planned giving prospects. 4. What groups prefer EFT/online giving to giving by checks? Our Blackbaud Analytics researchers and statisticians are researching this question. 5. Which planned gift vehicle is most attractive to which age prospect? In general, annuitants are age 70+, charitable remainder trusts are 55-70 years of age, and bequests fall into two groups: 45-60 and 65-78. 6. Are people promoting change of beneficiary on retirement plans in lieu of changes to wills? I am aware that this is happening more frequently, but have no sense of the degree of usage in nonprofit marketing of planned gifts. Planned Gift Marketing 1. Based on your experience, how effective are financial advisor sponsored seminars? I believe these seminars are still effective as part of a comprehensive marketing strategy. Years ago these were more successful than now, probably because the market has become somewhat saturated. Effectiveness is dependent on your ability to select good prospects to invite and their willingness to attend. 2. How important is it to start a relationship with both child and parent to secure a planned gift? I do not believe this to be that important. Focus on the prospective donor. 2 3. If it is important to build a relationship with the whole family when cultivating a planned gift, should you engage both generations via solicitations? What about seminars targeted to family financial management? Build the relationship with the primary prospect(s) and remain hopeful that the relationship
will grow. Do not hesitate or postpone cultivation until you are able to reach everyone it may never happen. 4. Are there special techniques that you might use to attract the new breed of transactional donors that want hands-on involvement with your agency? Although these individuals may require more care and feeding, their interest in involvement relates strongly to volunteerism. Volunteerism and planned giving are strongly related. 5. How do you work with your direct mail office to accomplish the anniversary solicitations? Annual giving and planned giving marketing must be well coordinated if you wish to maximize direct mail marketing for planned giving. Identifying consistent annual fund donors by age and time-of-year-giving is a comparatively easy data mining exercise. Direct mail practitioners (in-house) should welcome an opportunity to reduce costs while ensuring loyal giving. External direct mail providers may rebel at fewer mailing opportunities to consistent donors because it may reduce their success and limit their revenue (fewer pieces mailed equals lower costs to you but lower fees for them). Remember that it is your organization, the donors are your donors, and you wish to bond donors to your mission over the longterm. In other words, YOU call the shots. 6. Is there a planned giving program that you would recommend we show our donors to help them better understand planned giving? I would welcome suggestions from the nonprofit community. Please feel free to email us your thoughts at plannedgiving@blackbaud.com. We ll post responses on this Web page in the future. 7. Can you give us an example of a message you would put in a newsletter? This is a work in progress. We hope to publish another white paper devoted to planned giving marketing in the future and we will let everyone subscribed to Blackbaud News know when it is available. 8. What newsletter topics do you recommend? Personally, I believe that newsletter topics should be simple, straight-forward discussions featuring stories or testimonials of donors. Focus on one type of gift at a time and do not ignore smaller planned gifts at the expense of mega-gifts. The majority of your readers do not possess mega-gift potential. 9. Should we send our newsletter to a large target community audience or just current donors? Are you marketing your organization to the broader community as well? If not, I do not believe that the expansion of your planned giving efforts to this group will be that fruitful. 3 10. More and more email filters, spam-blockers, etc. screen out repetitive pattern words appearing in the subject block. What subject lines do you find success with? I would welcome suggestions from the nonprofit community. Please feel free to email us your thoughts at plannedgiving@blackbaud.com.
11. Have you heard that some states are limiting the number of solicitations nonprofits can send? I have not heard that some states are limiting the solicitations sent my nonprofits. I plan to look at this, but if it is true, I cannot say that I am surprised. The industry has invited this oversight by steadily increasing solicitations to donors, lapsed donors, and prospects for acquisitions. Nonprofits need to take control of annual fund activities now so as to reduce or prevent regulation of mailings. 12. Can we get a copy of the successful 114-word brochure? There are proprietary interests in this brochure that prevent me from reprinting it here. Our upcoming planned giving marketing paper will address this topic. 13. Would you place a planned giving brochure in the `goodie` bag to donors who attend our black tie event? No. I would identify the best planned giving prospects among the event attendees and endeavor to meet and cultivate relationships with as many as possible. Perhaps planned gift donors could be recognized at the event as well. Avoid the temptation to let the written word substitute for personal conversations. 14. What do you think about integrating annual campaigning with planned giving asks? Unfortunately, this is too deep of a subject for me to address in its entirety at this time. I hope to include this in the white paper on planned giving marketing. In general, a wellconceived integration makes intuitive sense to me. Getting Started 1. If you are a 501c3 are you eligible to receive an annuity? You must meet the requirements for licensing in the states that you plan to seek annuity gifts. 2. How does one get licensed to offer a charitable gift annuity? Please check with the state(s) in which you plan to seek these gifts. 3. When should an organization consider itself prepared to offer an annuity? I would recommend that you seek outside counsel to assist you in this evaluation. 4. If we don t have a solid annual or major gift program, should we even be considering planned giving yet? Yes. If you are building the foundation for a successful fundraising program, I believe you should prepare for planned giving as well. 4 5. What if you don t have executive buy-in on the importance of maintaining longterm relationships? Please keep in mind that the following answer is offered without full knowledge of your situation. The simple answer would be that you have a big problem. Long-term relationships are the foundation of major and planned giving success. Personally, if I were faced with this problem, and had made the effort to seek changes within the organization and very little positive change had occurred, I would consider seeking a new position. Your current position may not be a good match for you and your personal and professional goals. You
may contact me if you wish to discuss this in greater detail; perhaps there are additional alternatives. 6. How important is it to have documentation of a bequest or other planned gift? Trusts and annuities will require your knowledge and participation. As mentioned previously, bequests do not. Many successful programs ask bequest donors to complete a gift intent letter. 7. Does a successful planned giving program tend to reduce the annual fund? I do not believe so. Questions About the Webcast 1. Can I get a copy of the slides? Yes! You can download the entire presentation, with audio, or just a.pdf file of the slides at http://plannedgiving.blackbaud.com. To request permission to republish all or part of the presentation; please email us at plannedgiving@blackbaud.com. 2. Will you publish the results of the polls? Yes. Lawrence Henze, managing director of Blackbaud Analytics, has extensive experience in fundraising, planned giving research and the application of predictive modeling services to the nonprofit marketplace. Mr. Henze has 15 years of experience in development, raising more than $125 million, primarily for higher education institutions. During his career, he has personally reviewed the giving histories of more than 30,000 planned givers across the country. He holds a BA in political science from Carroll College in Wisconsin, and an MA in public policy and administration and a law degree from the University of Wisconsin at Madison. Mr. Henze is also a frequent speaker on planned giving at industry conferences including AFP International, AHP International and APRA International. 5
about Blackbaud Blackbaud is the leading global provider of software and related services designed specifically for nonprofit organizations. More than 12,500 organizations use Blackbaud products and consulting services for fundraising, financial management, business intelligence, and school administration. Blackbaud solutions include The Raiser s Edge, The Financial Edge, The Education Edge, The Patron Edge, Blackbaud NetCommunity, The Information Edge, WealthPoint, and ProspectPoint, as well as a wide range of consulting and educational services. Founded in 1981, Blackbaud is headquartered in Charleston, 3. Can I still take the polls? Yes, if you view the recording of the presentation at http://plannedgiving.blackbaud.com, you can still participate in polls and view updated results. South Carolina, and has operations in Toronto, Ontario; Glasgow, Scotland; and Sydney, Australia. If your question was not answered or you d like to ask another, please feel free to write plannedgiving@blackbaud.com. We look forward to hearing from you! For more information about Blackbaud solutions, contact a Blackbaud account representative. In the United States and Canada, call toll-free 800.443.9441. In Europe, call +44 (0) 141 575 0000. Visit us on the Web at www.blackbaud.com. March 2005, Blackbaud, Inc. This document is for informational purposes only. Blackbaud makes no warranties, expressed or implied, in this summary. The information contained in this document represents the current view of Blackbaud, Inc., on the items discussed as of the date of this publication. 6