Get Ready For Planned Giving May 2008

Get Ready for Planned Giving, the Marketing Revolution, and Stewarding Your Donors Dave Crawford Jared Hughes Gayle Union Bruce Wenger

Overview What is a planned gift? How does the current environment make planned giving important right now ? Who are your best planned giving prospects and how should you reach them? What do you do after the gift has been made?

What is a Planned Gift? Planned gifts usually involve financial, estate and tax planning; they often provide immediate benefits to the donor and deferred benefits to charity Planned gifts often build long-term endowment Usually a way for a donor to make a larger gift Examples of planned gifts: Bequests (simplest and most popular) Beneficiary designations, e.g., retirement assets, life insurance policies Life-income gifts (gift annuities, charitable trusts) Gifts of non-cash assets, e.g., real estate and art

How do They Compare to Other Gifts? Planned gifts are often larger than outright gifts The typical capital gift target is 20X donor’s largest annual fund gift. The typical planned gift target is 100X-300X donor’s largest annual fund gift. A charity’s planned giving pool may be 5X-10X LARGER than its capital pool. 2. Planned giving is marketing driven, relies on self-identification, and is the most personal form of fundraising – no other charitable gift elevates the charity to the level of the donor’s own family.

NCPG Survey 2000: Key Findings 42% of Americans die intestate – That’s 42% of your donors Only 1 in 3 donors told the charity about the bequest in advance More than 2/3 who made a planned gift also made a cash gift The average age when a will is created is 44

NCPG Survey: More Key Findings 8% of Americans have included charities in their estate plans; half included one or more 21% of bequest donors had no prior affiliation with the charity 34% of donors indicated that they learned of the idea of a bequest through the charity’s published materials and website 12% learned of the idea from financial advisors

Other Things You Should Know. . . The average bequest = $20,000 - $70,000 75% – 80% of planned gifts are bequests A very small % of donors ever change that commitment [think stewardship] Other charities are educating your donors and closing planned gifts – shouldn’t you?

An intergenerational wealth transfer of at least $41 trillion is taking place during the next 50 years. At least $6 trillion is expected to go to charity. Total Low Estimate (2% secular real growth in wealth) Middle Estimate 3% secular real growth in wealth) High Estimate (4% secular real growth in wealth) Number of estates 87,838,311 87,838,311 87,838,311 Value of estates** $40.6 $72.9 $136.2 Estate Fees $1.6 $2.9 $5.5 Estate Taxes $8.5 $18.0 $40.6 Bequests to Charity $6.0 $11.6 $24.8 Bequests to Heirs $24.6 $40.4 $65.3 * Derived from tables in Millionaires and the Millennium: New Estimates of the Forthcoming Wealth Transfer and the Prospects for a Golden Age of Philanthropy, Schervish, Paul G. and Havens, John J., Social Welfare Research Institute, Boston College, Boston, MA, October 1999, http://www.bc.edu/bc_org/avp/gsas/swri/swri_features_wealth_transfer_report.htm. **All dollar values are in trillions of 1998 dollars.

What Does This Translate To? A GIFT PLANNING OPPORTUNITY

Who Are These Planned Giving Donors?

Planned Giving Donors Are Loyal, But Not Necessarily Wealthy Only a small percentage of PG donors are wealthy. Most are in moderate income and non-estate taxable brackets LOYALTY, not capacity or age, has the highest predictive value in identifying PG donor prospects *Many of the statistics cited here and elsewhere in this presentation have been developed by The Planned Giving Company from analysis of 4,600+ planned giving donors in 40 of its client organizations across varying sizes and market sectors. © 2008 The Planned Giving Company LLC

Planned Giving Donors Are Loyal, But Not Necessarily Wealthy Think “ loyal” not “ wealthy ” 41% of PG donors give 10+ consecutive years to the annual fund. What about the other 60%? HINT: most of them give loyally, but not consecutively 77% of PG donors make 15+ gifts to the annual fund © 2008 The Planned Giving Company LLC

Why is Loyalty Important? HIGH LOYALTY HURDLE — Estate gifts and asset transfers to charities require a level of loyalty that approaches commitment to family SHORT LIST — The typical planned giving donor has between 1 and 5 charities on that list, although they may make annual gifts to more

THE KEY: Loyal Patterns of Giving 69% of PG donors have a highest gift of $1,000+, but only 9% of those do NOT exhibit loyal patterns of giving On average, over 90% of PG donors exhibit loyal patterns of giving Only 11% of planned giving donors are “rated” as wealthy © 2008 The Planned Giving Company LLC

Planned Gifts in Capital Campaigns PGs are providing up to 30% or more of comprehensive campaign totals Capital campaigns typically focus on major donor prospects only — 5% or less of the donor base Deferred giving campaigns reach another 20%—the “loyals” in your donor base

The Secret: The Paradigm Shift Gifts from Income Asset Transfers

So, What Does This Mean for How You Market Planned Gifts?

Use Loyalty Screening to Identify Your Prospects Loyalty screening has over 90% predictive accuracy across institutions — much higher than demographic or wealth screening methodologies Matching loyalty with capacity produces a high priority visit list

Why Flash Cards Work Educational and non-invasive Easy to read (30 seconds / 85% readership) Opportunity-based Mailed to “loyals” One idea at a time Inexpensive Four-color, customized, variable messaging Targeted

In-House Print Advertising Free to place Eye-catching / clever / humorous One message Drives donor to website or to call Underscores mission and vision Can use in other venues (posters at events) Pass-a-long potential

Why PG Websites are Better Always available Easy to update & change Inexpensive to install & maintain Comprehensive Searchable Measure readership Interactive Easy to use Provides instant response mechanism Prospects are self-directed

PG Websites Don’t Work Alone ! Typically, people don’t Google PG websites. They go there in response to a direct marketing probe 65% of the traffic (page views) on PG web pages are DIRECT LINKS (i.e. visitor types in the discrete URL on a direct mail piece)

Visit Your Loyals The most effective way to cultivate planned gifts is with face-to-face visits Proactive PG officers make 85 to 100 face-to-face visits annually Fewer than major gift officers because of the time needed for charitable gift planning

PG Calling: the New Frontier Loyalty selection is the key. Loyals will take your call Allows you to qualify large numbers of prospects when they can’t be visited by you and your staff

PG Calling: the New Frontier Goals: Personally connect with your “loyals” and thank them for their long-term support (no one ever has) Schedule gift planning discussions with PG specialists Identify and close planned gifts

Gift Value Expectations As an interactive form of marketing, telephone response rates will be higher than direct mail response rates Many loyals will reveal estate gifts that have already been arranged simply because someone is asking Loyals will explore CGAs, bequests, beneficiary designations, and other gift plans because of two-way communication

Gift Value Expectations: Is It Worth It? Assume an average estate gift of only $25,000 Assume that 2% of your loyals provide for your charity in their estate plans after being cultivated through a calling program Assume that 5,000 loyals are called

Gift Value Expectations Result: A $2,500,000 pipeline of planned gifts from 100 new planned gift donors Yes, it is definitely worth it!

Marketing: the New Way Loyalty screening 90%+ accurate Flash cards 85% readership Attractive print sds Free / drives traffic Donor-friendly websites Easy, available 24/7 Face-to-face visits Best prospects PG phone mail The new frontier

Your Charity is Now Part of the Family… Now What? Recognition and Stewardship are Critical

Recognition Components The Legacy Club or Society – Get Creative!

Your Legacy Club Brand Should stand out from the rest Be in the same “family” as your other pieces Relate somehow to your mission Be unique – Don’t accept cookie-cutter stuff Must make donors feel special and apart

Lapel Pin / Ribbon Rosette Bestowed at special recognition event Identifies them to the rest of your community Prompts word-of-mouth interest from peers “Hey, where did you get that?” “What did you have to do to get that?” ”What is the pin for?” Esp. in DC, PEOPLE LOVE THE LAPEL PIN

Annual Special Event / Gathering Welcomes and celebrates new members Invite prospects to hear peer testimonials Cements their love / Interest Reinforces their commitment and good decision Opportunity for them to get an “inside look” Opportunity for your board to interact with them Opportunity to THANK THEM AGAIN Opportunity for them to interact with your product Opportunity to meet your ‘stars’ [drs., curators, profs., etc.]

VIP Treatment Special discounts on your merchandise Pre-press releases sent to them day before Special reserved seating and / or transport Special receptions or hospitality suites Advance notice before general public Thanksgiving greetings / New Year’s greetings Use of logo on their social / professional networking profile or blog

Everlasting Recognition Donor’s name inscribed in society book Catalogued into permanent collection Carved in stone / wood / glass in donor wall

Printed Recognition Name listed in any honor rolls Annual report Annual honor roll of donors Web-site Quarterly publication

Invitations and Access Give them invitations and access to special events, lecture series, and ceremonies throughout the year nationally Endeavor to provide access to similar events in collaboration with your local chapter and association.

Feature Articles and Photos Donor’s story published in the in-house magazine and on the website when gift is announced and when it matures Inspires others to do the same because donors relate to others like them

Complimentary Anything If you have a quarterly journal or monthly magazine you could consider giving it to them gratis Offer them complimentary use of the Board Room at the national headquarters in Washington, D.C. (subject to availability)

Stewardship Determine what each donor would like Hand-deliver the first check if possible Send subsequent checks with a cover letter Send them anniversary cards (of their gift) Invite them to volunteer as members of a legacy planning donor advisory committee Ask them to host a regional PG reception

The National Committee on Planned Giving The preeminent association for professionals in the charitable gift planning field www.ncpg.org The National Capital Gift Planning Council meets monthly in Washington, DC. www.ncgpc.org

LEAVE A LEGACY A campaign that encourages people from all walks of life and all income levels to think beyond their lifespan when doing good works. www.leavealegacy.org

American College of Trust and Estate Counsel A national organization of approximately 2,600 lawyers elected to membership by demonstrating the highest level of integrity, commitment to the profession, competence and experience as trust and estate counselors www.actec.org

PG Listserves GIFT-PL NCPG members-only discussion list for all issues and queries related to gift planning ABA-TAX A tax law internet discussion group sponsored by the American Bar Association Tax Section. Participation is limited to practitioners, law professors, and law students ABA-PTL Sponsored by the Probate Division of the Real Property, Probate & Trust Law Section of the American Bar Association, intended primarily for the use of Section members and related professionals so they can discuss estate planning and administration issues by e-mail GIFT-PLAN A moderated planned giving forum, focusing on issues of interest to U.S. gift planners Yahoo PLANNED GIVING An open list for discussion of gift planning topics

IRS Publications At IRS.gov IRS Publication 526 Charitable Contributions Information about the types of contributions that can be deducted, how much can be deducted, and reporting IRS Publication 561 Determining the Value of Donated Property This publication explains what kind of information a donor must have to support the charitable contribution deduction for a non-cash gift IRS Form 8283 Noncash Charitable Contributions This form is used by donors claiming a total deduction of over $500 for all property contributed to charities in one calendar year. A charitable organization is required to complete Part IV of Form 8283 when a deduction of $5,000 or more is being claimed for a donation of property IRS Instructions for Form 8283 IRS Form 8282 Donee Information Return This form is filed by the charitable organization whenever it sells, exchanges, or otherwise disposes of gift property that was reported on Form 8283 when disposal occurs within two years of the date of receipt

Questions? Dave Crawford -Dave@plannedgivingcompany.com Jared Hughes - JaredBHughes@gmail.com Gayle Union - GayleU@verizon.net Bruce Wenger - bwenger@goidc.com

Get Ready For Planned Giving May 2008

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