How a Nonprofit Can Start and Market a Planned Giving Program

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Planned giving programs—sometimes also called gift planning, deferred giving, or legacy giving—help donors make plans to leave money or assets to nonprofits at a future date, usually after death. Most larger nonprofits now have planned giving programs or are considering them.

These programs often include a variety of financial vehicles that can be adapted to each donor's needs. Nonprofits often use professional help 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 several types of planned giving, but the most popular are bequests, charitable gift annuities, trusts, and pooled income funds.

  • Bequests: These make up the majority of most 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, either in 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 large 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 to grow its income, and after the donor's death, the nonprofit can use the remaining donation.
  • Charitable 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. Charitable lead trusts are similar, except that the annual payments go to the nonprofit for a certain period of time, and the remainder goes to the beneficiaries.
  • 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.

What to Consider Before Starting

A planned giving program will not solve a nonprofit's immediate financial needs. It is an investment in its future financial 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 it does for donors. Donors are altruistic to be sure, but they also can be motivated by a desire to achieve a little bit of immortality. No other form of giving does that better than a planned gift that will memorialize them after death. Your organization can become a vehicle through which people can make a lasting mark through a gift that leaves the world a better place.
  • Make sure that your organization is around when a donor's last wishes are read. 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. You must think 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 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 strong financial management system in place. You will need a robust 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 Your Planned Giving Program

Planned giving is not just about setting up the many planned gift vehicles. Laura Fredricks, the author of "The Ask: How to Ask for Support for Your Nonprofit Cause, Creative Project, or Business Venture," says that planned giving programs need to be sold to donors and prospective donors and let them know that you are ready and willing to help them "fulfill their philanthropic dreams of supporting your group."

Fredricks suggests these first steps:

  • Make use of what you already have. Start out 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.
  • 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.
  • 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.
  • Use methods that work. According to the Association of Fundraising Professionals, mailed solicitations, advertisements in your publications and on your website are the best ways to generate interest in bequests and other planned gifts.
  • Fight for a budget. Make sure you have an adequate budget for marketing planned gifts.
  • Create new materials. After beefing up existing materials, move on to a planned giving newsletter for current 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. Also, create a planned giving brochure and send it as broadly as you can afford.

A planned giving program is not easy or cheap to set up, so make sure that you market it adequately. It will pay off with long-term stability for your organization.