How a Nonprofit Can Start and Market a Planned Giving Program

Even Small Charities Can Tap Planned Giving

Happy older couple
••• Jim Purdum/Blend Images/Getty Images

What Is Planned Giving?

Planned giving programs—sometimes called gift planning, deferred giving, or legacy giving—help donors make plans to leave money or assets to nonprofits at a future date, both during their lifetimes and after death. There are many forms of planned giving, but the most common are bequests, charitable gift annuities, and charitable remainder trusts.

These programs include a variety of financial vehicles that can adapt to each donor's needs.

Nonprofits often use professional help, such as consultants, to set up planned giving programs, and they may also hire staff educated in such methods.

However, even small nonprofits can set up simple bequest programs so donors can designate their favorite cause as a beneficiary in their wills.

Types of Planned Giving

There are many variations of planned giving, but the most basic ones include:

  • Bequests: These make up the majority of planned gifts. Anyone can make a bequest to a nonprofit through their will or estate plan. Donors can allocate a specific amount of money to give after they die, such as a lump sum or a percentage of their total wealth, or they can choose to give the remainder of their estate to a nonprofit after all of their other bequests are paid.
  • Charitable gift annuities: This is an agreement in which the donor gives a significant gift to a nonprofit, receives a tax deduction at the time of the gift, and then receives payments from the nonprofit during their lifetime. The nonprofit may invest the money and after the donor's death, the nonprofit can use the remaining funds.
  • Charitable remainder trusts: Charitable remainder trusts are tax-exempt, irrevocable trusts that make annual payments to the beneficiaries for a certain amount of time, and then donate the remainder to a nonprofit.
  • Pooled-income funds: These are charitable trusts that are established by nonprofit organizations. Donors contribute to the fund, the nonprofit invests the contributions, and it pays dividends to the donors during their lifetimes. The fund distributes the remaining assets to the designated charity or charities.

Before Starting Planned Giving

A planned giving program will not solve a nonprofit's immediate financial needs. It is an investment in its future economic well-being. This type of program takes time to construct and even more time to realize results. A nonprofit should keep some considerations in mind before beginning one.

  • Understand what planned giving is and what motivates donors to give in this way. A study from GivingUSA found that donors are drawn to planned giving because they believe in the cause of a particular organization, that the charity makes an impact, and that they can give more through their estate than during their lifetime.
  • Use demographics to your advantage. Your organization has a lot of information about your donors, so dig deep for those people who might be more likely to enlist in a planned giving program. For instance, GivingUSA found that the average age of donors when they made their first planned gift was 52.8 years. Furthermore, planned giving donors had long histories with their charities, with 50% of them having 20 years or more of involvement.

Make sure that your organization has longevity. You must demonstrate to potential donors that your organization has staying power and that you will be able to put the donor's wishes into play. If your organizational purpose is time-limited, don't even consider a planned giving program.

  • Be able to articulate how planned gifts will be spent. It would be best if you thought this through before talking to donors about leaving their money to you. Donors usually want to see their funds invested for the long term in something significant and sustainable. Having such possibilities available will reassure donors that you will not spend their gifts carelessly.
  • Offer meaningful recognition opportunities for your donors. Although not all donors want to be publicly recognized, many will want that. Can you provide "naming" opportunities (a building, monument, land, scholarship) that will carry the donor's name into perpetuity?
  • Gain the respect of your community and others in your field. Donors often want to affiliate with the pillars of the community. They need to trust your organization to use their gifts wisely.
  • Spread the word. To prepare for a planned giving initiative, you must educate everyone in the organization, including staff and board members, so that they both understand and support what you are doing. They must be able to help promote your giving opportunities to prospective donors.
  • Put a robust financial management system in place. You will need a comprehensive financial management system run by experts to execute your program competently. Start with bequests and build toward more complicated instruments, such as annuities. Enlist a good consultant and set up relationships with trustworthy financial institutions.

How to Market Planned Giving

Planned giving is not just about setting up the many planned gift vehicles. It is also about finding your audience, marketing, and follow-through.

Consider taking these crucial steps:

  • Make use of what you already have. Start slowly and build your marketing program. Begin by using your existing publications, direct appeals, website, and special events to advertise the types of planned gifts you're set up to offer.
  • List a particular person as the planned giving contact. Provide a telephone number, email address, and mailing address. Many charities appoint a planned giving officer to coordinate the program and serve as the primary contact with planned giving prospects.
  • Include a link to a planned giving section on your website. Explain the types of gifts available, the minimum level for each, and the benefits. Include a calculator. Calculators are available commercially (DonorCalcs is one example) for installation on your planned giving page or website. With a calculator, anyone can see how a particular type of planned giving works.
  • Educate the board and staff. If you have to fight for space on your website and in your publications, convince your board and your CEO that planned giving is necessary. Also, set up a planned giving advisory committee. Bring in some outside advisors to help with this. The advisory committee can establish gift acceptance policies and develop a legacy society.
  • Use methods that work. While direct mail, advertisements in your publications and on your website are still dependable ways to generate interest in bequests and other planned gifts, invest in social media as well. Pew Research found that significant numbers of older people use social media, such as Facebook.
  • Fight for a budget. Make sure you have an adequate budget for marketing planned gifts. Planned giving is a long game, so convincing the board that investment now will pay off eventually may not be easy. However, remind them that according to the GivingUSA study, 7% of planned giving donors increased their annual giving after setting up a planned gift.
  • Create new materials. After beefing up existing materials, move on to a multi-channel newsletter for existing planned givers as well as those who have inquired about such gifts. Send it to all ages, since planned giving can occur with any age cohort. According to Blackbaud's study, "The Next Generation of Giving," all age groups from GenZ to Matures make wills and indicate interest in including gifts to charities.

The Bottom Line

A planned giving program is not easy or cheap to set up, so make sure that you market it adequately. Start small with a bequest program. Pay attention to your demographics. Prepare your marketing materials. And convince your board that a multi-pronged planned giving program is an investment in the long-term financial health of your organizations.

Article Sources

  1. Blackbaud Institute. "Planned Giving." Accessed August 22, 2020.

  2. Fidelity Charitable. "What Is a Pooled Income Fund?" Accessed August 22, 2020.

  3. GivingUSA. "A New Special Report from Giving USA Foundation, Leaving a Legacy: A New Look at Planned Giving Donors, Investigates Understudied Area of Philanthropy." Accessed August 21, 2020.

  4. WealthEngine. "Planned Giving Marketing Plan: Best Strategies to Approach Donors." Accessed August 22, 2020.

  5. DonorSearch. "Planned Giving: The Job Description." Accessed August 23, 2020.

  6. Planned Giving. "21 Steps to a Succesful Planned Giving Program." Accessed August 23, 2020.

  7. Pew Research. "Technology Use Among Seniors." Accessed August 22, 2020.

  8. Blackbaud Institute. "The Next Generation of Giving," Page 24. Accessed August 23, 2020.