Bolster Major Gifts With Bequests and Family Foundations

In 2007, charitable bequests rose significantly to $23.15 billion, and giving from foundations, an increasingly popular vehicle for individual bequests, also rose dramatically by 10.3 percent to $38.52 billion.  These data from Giving USA 2008, released in late June by the Giving USA Foundation, suggest the nonprofit world may be starting to see the much-anticipated generational transfer of wealth, said Campbell & Company President Peter Fissinger. 

“It looks like many individuals and families are creating private foundations, transferring wealth to these foundations and then having these foundations make philanthropic gifts,” Fissinger said in Campbell & Company’s June 24 Webinar, “First Looking: Giving USA 2008: Turning Data Into Action.”  Fissinger stressed that even though foundation giving accounted for 12.5 percent of all giving in 2007, individuals and families are driving the giving for as much as half of the country’s foundation giving, highlighting the importance for organizations to build and maintain strong relationships with individual major gift donors and prospects.

In addition to catching the wave of increased bequest and foundation philanthropy, organizations with effective planned and major giving strategies and knowledgeable staff could find their bottom lines less affected by the current economic slowdown than organizations that rely heavily on lower-level annual donors.

Panelist Mike Poston, vice president for advancement at Guilford College, said he expects that the current economic outlook may diminish returns for an organization’s annual fund program, but his experience has shown that major and planned gift programs are more insulated from economic slowdowns.  To weather the current market, Guilford College is increasingly focusing its efforts on its major donors, who often don’t feel the same pinch during a slowdown as lower-level donors do.  The College is also looking intently toward its planned giving program, as long-range commitments to an organization are less likely to be affected by a short-term drop in the market (and endowment gifts also help strengthen an organization’s own buffer against a slow market by providing steady income).

Effective planned giving programs are approaching prospects earlier, when they are in their 50s and 60s, as previous Campbell & Company-sponsored research has shown that donors begin to think about their estate plans at this stage in their lives.  Webinar panelist Marcia Mintz, chief development officer for Valley of the Sun United Way, said her organization has had great success working with younger planned giving prospects.

“Most of our prospects that we’re targeting for significant planned gifts are in their mid-50s to 60s,” said Mintz, who is using planned giving to raise considerable endowment funding for the Valley of the Sun United Way’s current campaign.  “Some of the folks who we waited on who are in their early 70s, their plans are really locked already.”

Poston said Guilford has begun deferred giving conversations with younger prospects but has been careful not to “drop” prospects just because they’ve reached a certain age.  That strategy has paid off, with $1 million-plus bequest intentions coming in from two of Guilford’s donors—one 82 and one 86—in the past month.

Following the panel discussion, Campbell & Company Senior Consultant Val Broadie noted that organizations must be sure that they also are building relationships with families, not just individual donors or prospects.  “Because women tend to live longer than their husbands, they are the ones who are ultimately going to have control of the assets,” she said.

Recognizing this reality, Broadie organized female-focused financial planning seminars in a previous development position.  Female staff, donors and members of women’s auxiliaries were invited to participate in discussions about a variety of financial education topics.  Development staff and members of the planned giving committee attended as well, cultivating attendees and helping them learn more about the organization.  Broadie said the seminars were successful in engaging attendees and encouraging them to think more deliberately about their financial plans.

Planned giving training for staff members also is a key component to a successful program, the Webinar panelists stressed.  Mintz encouraged others in the field not only to learn the basics about estate planning options but to stay informed and updated, as laws and regulations change frequently, and Poston said he has worked with his planned giving director to identify appropriate training opportunities for his advancement team.

“I want everybody to really embrace the idea that you can’t spend enough money on planned giving education for your staff,” he said.

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