Is there ever an awkward time to accept the donation of a large bequest? I can argue yes if it is made in the midst of a campaign that has not considered that type of donation in advance. Because by not building a planned giving component into the campaign, such a donation mid-stream can turn into a messy proposition.
We have seen this come up over and over. A campaign is in full swing, and a prominent volunteer or board member announces he or she wants to make their campaign gift from their estate. One response could be, “Sorry, but we’re not accepting bequest gifts in this campaign.” While that might be the simplest response, it is most likely not the most advantageous one. So the organization scrambles to make exceptions (never a good idea) or tries to figure out how to deal with the bequest after the fact (always a paperwork nightmare).
The pros and cons of planned giving campaign components
To avoid this, I always encourage organizations preparing for a campaign to include planned giving in their program framework. First off, it seizes the opportunity for a triple ask: continue annual support, make a major campaign gift, and put the institution in estate plans.
Additional benefits of a built-in planned giving component include:
It affords the opportunity to develop or grow a comprehensive planned giving program.
It creates an inclusive environment that encourages more people to give to the campaign.
It enables donors to make larger gifts.
It extends the impact of giving past the campaign end-date and into the future.
Despite these advantages, some volunteer leaders and sometimes CEOs will push back. Their primary concerns are usually one, or more, of the following:
A bequest gift won’t come to the institution for 25-30 years and won’t address the needs we have right now.
A bequest isn’t a “real” gift because the donor can remove the organization as the beneficiary at any time.
The organization doesn’t have a planned giving staff to handle these kinds of gifts.
Accepting future, planned gifts will artificially inflate donation totals.
I advise organizations that a well-designed campaign can and should address both the current and the future needs of the institution. That includes outright gifts and pledges as well as current-use planned gifts; non-philanthropic private grants and contracts; and The Fund for the Future, made up of irrevocable and revocable future planned gifts as well as pledge payments that extend past the campaign period.
More importantly, a bequest in a will is indeed a “real” gift. The donor believes it is a gift and expects the institution to recognize it as such. And when someone designates a nonprofit organization as a beneficiary in their will, it really becomes a gift not only from the donors but also from the surviving relatives. An estate gift binds a donor to an institution in a very personal way, more so than a cash gift. And we know that less than 5% of charitable beneficiaries are removed from a donor’s estates, not much different from an outright gift pledge that goes unfulfilled.
It is true that because planned gifts will not come to the institution for many years into the future, and because some are revocable in nature, they should be counted and credited separately from outright gifts. It is recommended that organizations create an entirely separate category on the campaign report for the Fund for the Future. And because campaign reports are focused on reporting activity during a set time period, future planned gift valuation is not relevant. Both CASE and Partners in Philanthropic Planning recommend that these gifts be counted at face value.
Since the offer of a bequest is likely to be presented during a campaign, it makes logical sense to build the opportunity into the campaign framework. Then the swift and appropriate response will be a very gracious, “Thank you so much for considering us a member of your family.”
As always we welcome your comments.
Bruce Matthews, Vice President, Campbell & Company