The fundraising term planned giving scares many of us who work in nonprofits. We think it’s too technical and takes too much time.
In reality, planned giving simply means building relationships with your donors and their professional advisors. Instead of taking up too much time, planned giving can actually offer time to ramp up donors’ desires to give major gifts as well as ensure your nonprofit is in the position to receive them. But planned giving also doesn’t have to be time-consuming; I believe a nonprofit can accomplish these tasks in an extra 1-2 hours a month.
So, what are planned gifts?
Planned gifts are donations that can occur during a donor’s lifetime—referred to as major—and/or via their estate—referred to as testamentary. Their name probably comes from the fact that it is very rare for a donor to give a major gift via their ready cash. Unlike small, one-time donations, major gifts come from assets that need time to process on the donor end—this is probably where the planning comes in.
This brings us to our next question: why are planned gifts so important?
According to the Giving USA 2022, $484.85 billion was given by donors to charities in 2021, an increase of 4% from 2020. Of that nearly $485 billion, corporations only gave 4% and foundations only disbursed 19%. So maybe slow down on your race to apply for those grants—you and everyone else are trying to get them, and they actually constitute a comparably small portion of the pie, as it were.
In contrast, (living) individuals contributed a whopping 67% of last year’s gifts. Bequests (gifts via estates) alone made up 9% of the donations—twice what corporations gave. This is why you need a planned giving program in your nonprofit, and, more specifically, why you should work to build rapport with both donors AND their professional advisors. At its most basic level, planned giving is all about building relationships with donors, including their professional advisors.
For the most part, we nonprofits are really good at communicating with donors (or at least we should be). Similarly, donors are usually really good at talking with their professional advisors. However, a breakdown occurs between nonprofits and professional advisors. As nonprofit professionals, we need to fix this. After all, it is the professional advisors (attorneys, accountants, wealth managers) who set up the trusts, annuities, IRAs, etc., that you find in planned giving. And if the professional advisors don’t understand how your nonprofit works, these advisors can even talk your donors out of their charitable gift ideas.
But never fear! These 10 steps will help you to figure out how to best communicate with both your donors and their professional advisors.
10 steps to best communicate with donors and their advisors
Step #1: Know your nonprofit’s EIN and legal name.
Yes, this sounds super elementary, but it is purely to eliminate confusion. Consider how many other nonprofits may have a name similar to yours, whether locally or nationally. For example, how many nonprofits have the words care, hope, help, or hospice in their name?
Make sure all professional advisors know your EIN and legal name so they can incorporate them into any documents they may prepare for your donors. Remember, your donors’ professional advisors might be—and probably are—doing this work without your knowledge. So, make sure that they can easily find your organization’s legal name and EIN by adding it to your email signature line, newsletter, and website.
Step #2: Mention planned giving whenever possible.
Consider adding a phrase that references planned giving to your email signature line, website, and social media posts. Examples of this might read: “Please consider a gift to us in your estate plan” or “Do you know that ABC Charity accepts gifts of stock? Ask us how!”
Make sure you mix it up with different phrases—you never know which one is going to strike a chord. Again, make sure your leadership (and the rest of your nonprofit) knows what you are doing. You might even consider asking staff and board members to use these phrases in their communications as well.
Step #3: Create a template codicil.
A codicil is something that donors can complete and submit to their attorney to file along with their will. You provide it to donors who then take it to their attorney, which may or may not trigger a re-writing of the will. The codicil should include phrasing along the lines of:
We the donors (name) leave ____% of our estate to ABC Charity, EIN #_______.
Having this template on hand will complete the circle of communications between your organization, the donor, and their attorney.
Step #4: Adopt a gift acceptance policy.
A gift acceptance policy can be as simple as the following:
ABC Charity will accept unrestricted gifts of cash and stock at any time in any amount. All gifts of stock shall be liquidated immediately. The Executive Director has the authority to accept these gifts. All other asset gifts shall be reviewed by the _____ Committee before being accepted.
However, make sure you edit the policy as donations come in and your organization decides whether to accept certain assets. You might be surprised what people give—land, art, jewelry, vehicles—but you should make sure to take into account whether the donation is worth the work.
Step #5: Open a brokerage account.
Since we nonprofits are not licensed to buy and sell stock, you need a brokerage account to accept those gifts of stock on your behalf.
As you shop for a brokerage firm, ask whether a) your organization needs to keep a minimum amount in the account to keep it open and b) whether you need to have a certain number of transactions per year to keep it open. Some brokerage firms close accounts due to lack of activity, and you don’t want this to happen when a donor gives you stock. Hopefully you can find a brokerage firm that is amenable to maintaining a low-activity account at first as you work toward more gifts of stock.
Once you have this account, create a “Donor Instructions for Donated Stock” form where the donor (or really their broker) fills in the blanks of stock name, ticker symbol, number of shares, and donor name. Make sure you list your broker’s name, contact information, DTC #, and your organization’s account number.
Step #6: Plan for unexpected gifts.
Many planned gifts will arrive to you out of the blue—you had no idea that they were in the pipeline, which might drive you nuts! So, make sure your organization has a plan for how you will use major gifts (without donor restrictions) that arrive unexpectedly.
Use time at a board meeting to imagine that your nonprofit just won the lottery. Will you hire staff, replace the roof, launch a new program, or start an endowment?
And since these surprise gifts come in varying amounts, develop a wish list of items ranging from low to high cost. You can even publish this Wish List to encourage donors to give for specific items!
Step #7: Incorporate planned giving into your marketing.
Incorporate planned giving items into your usual marketing, whether this marketing usually appears on your website, in your newsletter, or via social media.
Snoop the websites and social media of bigger nonprofits (including universities) to see what they post about planned giving. Consider adopting these tools for your own use.
You might also try to message to both donors and their professional advisors. Your goal is two-fold: you want to get donors excited to give big as well as to convince professional advisors that your nonprofit is worthy of major gifts—whether during a donor’s lifetime or via their estate.
Step #8: Devote a website page to planned giving.
Create an obvious page on your website to house planned giving messaging and forms. Again, so much planned giving is done without your knowledge; you want to make it as easy as possible for donors and professional advisors to access what they need when they need it.
On this website page, you would house your legal name and EIN, mailing address, 990, Gift Acceptance Policy, and other formal documents. For example, if you follow steps 3 and 5, you might also place either the template codicil or the donated stock instructions here as well.
However, this webpage shouldn’t just be a bunch of downloadable templates. Make sure you link this page to other pages on your website where you tell stories of the great work that your nonprofit is doing and how you are improving the quality of life in your community. Donors are more likely to give to nonprofits they view as doing important work, and, after all, the work is what your nonprofit is about!
You might also use this page to invite donors and/or their advisors to meet with you. Meetings like this will help you all get to know one another better as well as ensure that donor gifts can be tailored to benefit both the donor and your organization’s needs. However, some donors will want to remain anonymous, and that’s okay.
Step #9: Keep a list of professional advisors.
Create a database or spreadsheet of professional advisors in your community. This should include attorneys, accountants, wealth managers, insurance agents, and bank trust officers.
Start networking with them, whether by newsletter, mail, or chamber functions, so that they get to know you and your organization’s capacity to accept major gifts. You want to partner with them on the technicalities, but you also want them to be a cheerleader for you when they are advising their clients—who sometimes don’t have a specific organization they’d like to donate to in mind.
Step #10: Get to know your local community foundation.
This is a good idea for a variety of reasons. Mainly, your local community foundation has the technical expertise to accept major, complex gifts that smaller nonprofits might not know how to deal with. The community foundation will then deposit these gifts into a Designated Fund or Agency Endowment specifically for your organization.
In addition, partnering with a community foundation might also serve as the credentials that convince a donor and/or professional advisor to structure a planned gift for your organization. The bigger your network is, the more points of access you have to the slice of pie that is planned giving.
It’s All about Relationships
Of course, there are a lot of nuances in planned giving—the technical definitions of and differences between charitable lead trusts, charitable remainder trusts, charitable gift annuities, IRA charitable rollovers, and gifts of business interests, for example. However, it is my hope that these ten steps should help you get started. Remember, while your first task is to ensure that your organization is prepared to accept major gifts, you also need to inspire community trust that you will use those major gifts wisely to do great things. Don’t be afraid to build that trust and those relationships—the big money will follow.
 You can see an paywall-free overview of this report at Resilia’s “Highlights from the Giving USA Foundation 2022 Report”
About the Author
Julianne Buck is the Executive Director of the Community Foundation of Grundy County, Illinois, and is the founder of Nonprofit Brains and Brawn, LLC. She is a Chartered Advisor in Philanthropy® and serves on the board of directors of the Chicago Council on Planned Giving.
Articles on Blue Avocado do not provide legal representation or legal advice and should not be used as a substitute for advice or legal counsel. Blue Avocado provides space for the nonprofit sector to express new ideas. Views represented in Blue Avocado do not necessarily express the opinion of the publication or its publisher.