4 Kinds Of Bequests

The standard definition of a bequest is a planned gift that ranges from the simple (money) to the extravagant (a house) that is made through a will. Yet while all bequests share the same definition, they are not all created equal.

Nonprofits received more than $23.41 billion in bequests according to the most recent edition of Giving USA. All of those gifts came in different forms and, as Elizabeth Ziemba, J.D., M.P.H. wrote in her book "The Complete Idiot's Guide to Giving Back," it’s important for fundraising officers to clearly understand their differences.

Ziemba noted that there are four distinct types of bequests that can be made in a will. All of these can be mixed and matched in the donor’s will, depending on giving goals. The four types are:

• Pecuniary Bequest: A gift of a fixed or stated sum of money designated in a donor’s will.
• Specific Bequest: A gift of a designated or specific item in the will. The item will most likely be sold by the organization and the proceeds would benefit that nonprofit.
• Residuary Bequest: A gift of all or a portion of the remainder of the donor’s assets after all other bequests have been made as well as debts and taxes paid.
• Contingent Bequest: A gift in a will made on the condition of a certain event that may or may not happen. A contingent bequest is specific and fails if the condition is not made.

Study: Planned Giving Donors In Unlikely Places

A new study by the Stelter Company in Des Moines, Iowa revealed that nonprofits may need to reinvent the way they go searching for planned giving donors.

The report 2012 Stelter Donor Insight Report, revealed that of the 401 individuals surveyed, one-fifth say they had never donated to the nonprofit at the time of their planned gift. Another 20 percent said they had been donating to the nonprofit for less than five years. This seems to indicate that a significant portion of donors are defying the traditional loyalty model ascribed to planned givers.

"This was one of the findings that we think is key to unlocking success for nonprofits," said Bev Hutney, Stelter's director of innovation and research, in a press release. "For example, just introducing the topic of planned giving much earlier in the conversation and targeting a wider group of people than what they do currently could really make a significant difference for a charitable organization,”

Another surprising aspect of the Stelter Study was the revelation that the individuals who are most likely to make a planned gift are adults aged 40 to 49. Specifically, 40 percent of Americans in that age range say they will "definitely or probably" make a planned gift, while only 10 percent of those aged 70 and older say the same.

Below are additional findings that came from the Study:

• The South has emerged as an increasingly lucrative market for nonprofits, with 29 percent of best prospects and 20 percent of current planned givers.
• In terms of political leanings, a greater percentage of planned givers are registered Republicans (39 percent) than Democrats (25 percent). But of the best prospects, 33 percent are Democrats while only 24 percent are Republicans.
• Never-married singles make up only 13 percent of current planned givers, but they represent 23 percent of best prospects.

You can download the full version of the 2012 Donor Insight Report on Stelter's website.

Moving From Annual Gifts To Planned Gifts

Planned giving campaigns can provide a big boost to a nonprofit's fundraising, but it's not exactly a walk in the park to start such a program. That's why Judi Smith of Funding Services Now and Dianne S. Johnson of Endowment Builders advised nonprofits to build their campaign off something that already exists as a proven fundraiser for most organizations: Annual giving funds.

Speaking during the Association of Fundraising Professionals’ 49th International Conference on Fundraising, Smith and Johnson explained that there are certain prospects that are more likely to support planned giving campaigns. These donors are:

• People who support the mission.
• Regular donors of small gifts.
• Donors of major gifts.
• Older donors.
• Volunteers.

Many of these individuals are probably already donating to your organization's annual fund, so it's worth trying to convert them to planned giving. Smith and Johnson said to consider the following ideas when trying to build your program from an annual fund:

• Start with an Endowment or Planned Giving committee (with each member to make their own planned gift).
• Target an event to include planned giving prospects.
• Review the database for a mailing program to a planned giving prospect group.
• Mail to existing members to reconfirm gifts and survey them.
• Look at offering charitable gift annuities.

Planning For Planned Giving

When Baby Boomers start to age, they start thinking about their legacy. And when Baby Boomers start thinking about their legacy, they start thinking about planned giving.

Planning for planned giving is a very sensitive task for donors. What they leave behind for others is a big decision that shouldn't be taken likely. A nonprofit might be anxious to know if they are receiving a bequest ahead of time but, according to representatives from The Stelter Company, that isn't always the case.

The representatives shared their findings on this subject at a recent Association for Healthcare Philanthropy (AHP) international conference. The results of their study showed that a whopping 53 percent of those polled said they prefer that an organization find out about a bequest when the time comes. Another 5 percent said they intend to notify the organization at some point.

A bequest is a very personal decision and donors don't necessarily want their decisions to be private until the time comes. Stelter urged nonprofits to respect the privacy of donors and to assure them they have a right to change their minds. They also listed the reasons why donors choose not to notify nonprofits ahead of time:

• It’s the donor’s own business, and no one else needs to know: 80 percent.
• The donor might have a change of heart, so it’s better not to say anything: 34 percent.
• Worries about being pestered with mailings and phone calls if the nonprofit knew about the bequest: 26 percent.
• A sense of the nonprofit looming like a vulture waiting for the money: 26 percent.
• A fear of getting special treatment, which would make the donor feel uncomfortable: 24 percent.
• Fear the organization would sell/give the information to other nonprofits that would also approach the donor: 19 percent.

Bequest giving is a big source of revenue for nonprofits, which makes it even more important that nonprofits respect the wishes of these donors. Failing to do so will likely result in the loss of the bequest and bad publicity.

Planned Giving Tips: Principles For Effective Stewardship

Baby boomers are aging and as a result, planned giving campaigns have picked up.  An important part of these campaigns is stewardship.  Nonprofits must know how to effectively steward baby boomer donors and their gifts. 

During the 2011 Association For Healthcare Philanthropy (AHP) international conference in Boston, Mass., Katherine Swank, senior consultant at Target Analytics, offered her own principles for effective leadership based off of Kay Sprinkle Grace’s book Beyond Fundraising.  The NonProfit Times was there to record her tips, and here are some of them:

• Engage the donor immediately
• Don’t mix messages like sending a thank you with a gift ask
• Carve out a budget for stewardship
• Keep your stewardship in line with organizational image
• Determine what kind of involvement your planned donors want outside of making a donation
• Use current legacy donors to convey messages to potential legacy donors

You can read the rest of the tips on our website.

Taking a strategic approach towards fundraising

For many nonprofits, the matter of fundraising can often pose a significant challenge. The business of identifying new donors can be a bit daunting, and having a focused strategy in place can remove a lot of the guesswork and aid in maximizing charitable contributions. For those who are keen on discovering effective ways of going about the business of prospect researching, this video is a must see. Many nonprofits are pleasantly surprised to discover how easy it can be to identify new donors, when an effective plan of action is in place.

Using the world wide web to full effect
A vast amount of information relevant to potential planned giving candidates can be accessed in the public domain, and the internet represents a powerful tool for obtaining this information. Resources such as corporate insider information, other nonprofit websites and news releases can shed light on a companies capacity to donate, as well as any philanthropic interests that it has demonstrated in the past. A variety of free online databases can be found, and in addition to these, local public libraries also contain a wealth of information.

Contemplating the purchase of fee-based tools
A variety of resources exist, as highlighted in the video, that can significantly simplify the matter of searching for new donors. It has been said that those who fail to plan, plan to fail, and this is certainly true as it relates to planned giving strategies. This video provides nonprofits with resourceful ways that they may never have considered before of making contact with new donors. With a little bit of research, nonprofits can enjoy a much greater measure of donations Taking a look at this video today could represent an important first step towards a nonprofit maximizing its fundraising potential.