• Surveys say that the average planned gift is 200 times larger than a person’s average annual gift and statistics indicate that most major-sized gifts are made through end-of-life instruments rather than through current-giving methods. Yet, the majority of planned gift donors are often overlooked by development offices simply because they are masquerading as annual fund donors. However, based on their gift potential, a well-structured proactive investigation for planned gift prospects should be part of your prospecting strategy. This session begins with a detailed discussion on understanding the most common planned giving donor profiles and then continues with step-by-step actions to help you identify the best prospects at your organization. Join us for this enlightening journey into the world of the hidden major donor! Presentation conceived, researched, written and delivered by Katherine Swank, J.D. (May 2014)

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PROSPECTING FOR HIDDEN TREASURE
FINDING GOLD IN YOUR PLANNED GIFT PROSPECT POOL
Katherine Swank, J.D.
Senior Consultant, Target Analytics®, a Blackbaud Company
Presentation with active hyperlinks available @
www.slideshare.net/kswank

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Name Katherine Swank, J.D.
Title
Senior Fundraising Consultant
Target Analytics
Development
Background
• Health, Public Broadcasting, Higher Education
• Raised over $200 million
Interesting
Facts
• Past president, Colorado Planned Giving
Roundtable
• Affiliate faculty, Regis University’s Masters in
Global Nonprofit Leadership program
• Member, Partners for Philanthropic Planning
Publications &
Presentations:
• www.npENGAGE.com fundraising blog
• Creating a Legacy: Building a Planned Giving
Program from the Ground Up @
www.blackbaud.com/resources
• Presentations @ www.slideshare.net/kswank
YOUR PRESENTER

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Where do Planned Gifts Fit in the Development Pyramid?
• Prospect Pool, Average Gift Amount & Cost to Raise a Dollar
Who Makes Planned Gifts?
• Get to Know the Planned Gift Donor
• Donors, Recipient Organizations and Other Facts
• Trends in Planned Giving
What Data is Useful for Planned Gift Programs?
• Determine Your Full Prospect Pool
• Apply the Data
• Using Data to Report Planned Gift Revenue and Inventory
• Take-Aways and Wrap-Up
LET’S EXPLORE THESE QUESTIONS

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WHERE DO PLANNED GIFTS FIT IN THE
DEVELOPMENT PYRAMID?

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PLANNED GIVING IN YOUR DONOR PYRAMID
You Have More Planned Gift Prospects than Major and Principal Gift Prospects
Combined
Principal Gift Prospects (<1%)
Annual Gift Donors (90%)
Major Gift Prospects (10%)
Planned Gift Donors (30%)

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PLANNED GIVING IN YOUR REVENUE PYRAMID
Principal Gifts ($50,000-$1,000,000)
Annual Gifts ($1 - $1,000)
Planned Gifts ($25,000-$150,000)
Major Gifts ($1,000 - $100,000)
Planned Gift Donors Have a Higher Average Gift Than Major Gift Donors

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PLANNED GIVING COST IN YOUR BUDGET PYRAMID
Planned Gifts (3¢ - 10¢)
Special Events/Acquisition (50¢/$1.25)
Principal and Major Gifts (5¢ - 10¢)
Renewed Annual Gifts (20¢)
Planned Gifts Cost Less to Raise a Dollar than Other Development Efforts

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WHO MAKES PLANNED GIFTS?

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PLANNED GIFT DONORS
Who Really Makes Planned Gifts?
• 1:10 of current donors
• 2:3 have no offspring or no grandchildren
• Educated, especially graduate degrees
• Household incomes >= $200,000
• Estates >= $1,000,000
- Excluding the primary residence
• Make total charitable gifts of > $500 annually
• Volunteer
• Surviving spouse of married couple and single
women; but rarely single men
When Do They Make Them?
• 1:10 donors makes planned gift between ages 50-79
• 2:10 donors makes planned gift > age 80

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PLANNED GIFT RECIPIENTS
Who Receives Planned Gifts?
Indescendingorderof
preference
• Local charities that
provide basic needs
• Education
• Arts
• Health
• Religion
• Youth and Family
• Environment/Animal
Care
• International
Indescendingorderof
giftamount
• Education
• Religion
• Arts
• Health
• Basic Needs
• Youth and Family
• International
• Environment/Animal
Care

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PLANNED GIFT FACTS
What Planned Gift Vehicles are Popular with the Affluent?
• In descending order of use:
- Will or Trust with Charitable Provision
- Endowment Fund
- Charitable Remainder Trust or Lead Trust
- Private Foundation
- Community Foundation Donor-Advised Fund
or Bank Donor-Advised Fund
- Charitable Gift Annuity
What Do They Fund?
• In descending order of donor-directed use:
- General Operating Support
- Long-term Investment in the Organization
- Support the Growth of the Organization
- Fund a Particular Program
- Memorial Gift

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PLANNED GIFT FACTS
Who Makes the Largest Planned Gifts?
• Estates > $5,000,000 give around 27% of their value to charity
• Estates > $20,000,000 give around 40% of their value to charity
When Do You Get That Planned Gift Revenue?
• Decedents aged 80+
- 80% of estate gift dollars are received after donors turn 80
- Though, those who begin estate planning by the age of 55 provide 40% of
total deferred gift dollars eventually received
55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95+
Charitable Bequest Dollars Received by Donor Age at Death

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PLANNED GIFT TRENDS
• Lowest birth rates for those currently 79 years old and older
• Baby bust 1924-1932 (approximate ages 80-90)
• Someone born in 1932 has a longer life expectancy than someone born in 1924
• We should have expected to have decreases in bequests in the past decade
The Bad News is…….. Some of Us Aren’t Dying to Participate

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PLANNED GIFT TRENDS
• Childlessness is the single strongest demographic predictor of
including a charitable bequest in one’s estate plan
• Rate of childlessness for those 70+ will double over time
• Will occur at the same time we have a sustained rise in total
population
• Most dramatic increases in actual dollars received by charities
may not be seen for five years or longer
The Good News is…… Some of Us Aren’t Having Sex

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PLANNED GIFT TRENDS
• Higher levels of education are
associated with higher levels of
charitable bequest giving
• Steep growth in education levels in
the 55+ age population since 1970
• Means an increasing propensity to
engage in charitable estate planning
‘Geek’ is the New Black

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PLANNED GIFT TRENDS
• Increasing trend to include a charity as a legacy beneficiary
among the U.S. population of adults aged 55 with a will or
trust
• Between 1998 – 2008, including a charitable bequest grew
by almost one fourth, from 8.28% to 10.12%
Younger Is the New Old… Proactively Identify a Younger Pool of Prospects

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PLANNED GIFT TRENDS
• The generally positive trend in
charitable planning among the 55+
is driven by the youngest
demographic, ages 55-64
• In comparison, the 65-74 year olds
are relatively flat and the 75+
group is declining in their estate
planning activity
• Positive trends will eventually
develop as the 55-64 year olds
move into older age categories
• But that’s 10+ years away
Older is Not Necessarily Better… Share These Trends to Educate Your Team and Leaders

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PLANNED GIFT TRENDS
• Steadily increasing levels of
charitable giving and
volunteering for population aged
55+
• Charitable engagement is a
positive indicator of the propensity
to leave a charitable bequest
Set The Alarm Clock for ‘Early’… Pass Along More Qualified Prospects for Engagement

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ROLE OF PROSPECT RESEARCH & DATA ANALYTICS
Research and Analytics Lead the Development Office Effort
• Identify the organization’s best pool of potential prospects
- Ascertain who’s likely to have already made a planned gift
- Surface those that should be educated about planned gifts to your organization
- Segment top prospects who should be approached on an individual level
• Research top prospects to determine their potential capacity for a planned gift
- This might also be in conjunction with a current major or principal gift ask
• Suggest the gift type or types most appropriate for solicitation of a specific prospect

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WHAT DATA IS USEFUL FOR PLANNED
GIFT PROGRAMS?

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PRIMER ON PLANNED GIFT VEHICLES
• Provision in your will or trust to pass money or other
items to a charitable organization upon your death
• Wills are often the first estate planning tool
• 90-95% of planned gifts are currently made this way
• Two primary age groups
• Late 40s to late 50s
• Mid 60s to late 70s
• About 75% of wills are never changed or updated
• More than two-thirds of planned gift donors also make
current annual gifts
• Planned gift donors are significantly more
philanthropic than non-planned gift donors
Bequests

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PRIMER ON PLANNED GIFT VEHICLES
• An irrevocable contract between one or two donors
and your organization.
• In exchange for making a gift to your
organization, you promise to pay the donor(s) a
fixed amount regularly for life
• 5%-6% of all planned gifts are CGAs
• Primary age group is mid 70s and older
• Average annuity is $60,000
• Over 4 in 5 annuitants learned about gift annuities
through the organization’s own marketing and
promotion – you can help the gift officers know who
to approach
• Many gift annuitants do multiple annuities
Charitable Gift Annuities

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PRIMER ON PLANNED GIFT VEHICLES
• An irrevocable financial holding that moves
liquid or illiquid assets out of an individual’s
possession into a giving vehicle with charitable
intent.
• The trust pays a specified annual amount
to one or more people for a fixed number of
years, or for the life of the individual(s) who
benefit from the trust’s distributions
• At the end of the term, the remaining trust
property is distributed to your organization
and any other specified charities
• 1%-2% of all planned gifts are CRTs
• Primary age group is mid 50s - early 70s
• Many CRT holders make charitable bequests as
well
Charitable remainder trusts

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PRIMER ON PLANNED GIFT VEHICLES
• Written provision in your life insurance policy, bank
account, retirement funds account and the like that pass
money or other items to a charitable organization upon
your death
• Are becoming very popular with donors age 60 and
younger
• These gifts cost no money to set up, do not require an
attorney or financial planner to be involved
• Can make gifts such as these in more than one
instrument
• Recent graduates, older alumni and grateful
patients, Board members and Trustees, organizational
insiders such as staff, faculty, physicians, etc. can make
these beneficiary designation gifts in minutes!
Beneficiary Designation Gifts

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3rd Party Vendor
Hire a company
that knows and
creates planned
gift-specific donor
models
Saves staff time
and reduces time
to identify prospect
pool
Donor models can
be customized to
specific gift
vehicles
Your Own
Modeling
You know your
data
Takes an
extraordinary
amount of time
and understanding
of analytic
modeling process
Lack of robust
outside data may
cause
endogeneity
concerns
Data Appends
Basic data is
abundant
Takes time to
collect on your own
and may not be
robust enough;
consider
purchasing data
Data points are
generic in their
identification and
not specific to
your prospect
pool
WHICH METHOD OF USING DATA IS RIGHT FOR YOU?

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DATA YOU’LL WANT TO HAVE
• If you can only collect or purchase up to 4 data points:
- Age
- Household Income
- Known Public-Record Assets Range (no need to have exact $$ at this stage)
- Education Level/Degree
• Up to 8 data points:
- Marital Status
- Number of Children in the Home
- Yearly amount of charitable gifts to other organizations or philanthropic indicator flag
- Planned gift acknowledgement with another organization
• If you can collect this information from each individual:
- Volunteerism
- Planned gift already completed that includes your organization
Regardless of Where or From Whom Planned Gift Profile Models Originate

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APPLY THE DATA – EASY
• Use data to find everyone in your CRM system with the following:
- Over the age of 50
- Household income of $50,000 or higher
- Known assets of $1,000,000 or higher
- College degree
• Rank your prospects by the following, in descending order in all categories:
- College degree
- Then by age
- Then by known assets / asset range
- Then by income
• Gift annuitants are typically over 70 years old and have incomes of $50,000
or higher
• CRT and LT grantors are typically 50-69 and have assets above $2.5 million
• The most active ages for creating bequests in estate plans are 40-59
• Those ready to share their estate plans with you are 80+
Use Data Points to Segment and Prioritize for Marketing

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APPLY THE DATA – EASY
• Use data to find everyone in your CRM system with the following:
- Over the age of 50
- Household income of $200,000 or higher
- Known assets of $5,000,000 or higher
• Rank your prospects by the following, in descending order in all categories:
- Known assets / asset range
- Then by age
- Then by income
• Assign for Gift Annuities: Age 75-90 with incomes of $75,000+
• Assign for CRT and LT: Age 50-69 and have assets above $5 million
• Provide research and recommendations for possible planned gifts on all
principal gift prospects and major gift prospects already validated for a
potential gift of $100,000 or higher or any prospect with assets of $10,000,000
or higher
Use Data Points to Segment and Prioritize for Gift Officer Assignment

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APPLY THE DATA – SOPHISTICATED
• Append as many of the suggested data points as possible to everyone in
your CRM system
• NOTE: Analytic model-vendors use hundreds of additional data points related to financial and
consumer habits, wealth and specific asset classes, biographical and socio-biographical
information – the suggested data points in this presentation are not exhaustive
• In addition to gift information, other useful affiliation codes specific to your
organization might include (this list is not exhaustive):
- Events attended
- Subscription or member levels
- Committees or other leadership affiliations
- Patient status or family of patient status
- Connection to disease or no connection
- Clubs, auxiliaries, extensions and group membership
- Use a self-validating model process to specifically identify your organization’s unique
planned gift donor profile, if possible
- Alternative, speak with a vendor about the data points you have available to determine if
you should work together to create a custom model for your organization
Use Data Points to Build or Purchase Analytic Models

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USE DATA AS A VISUAL AIDE TO REPORTING
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
Annual Revenue
$14 Million
19%
$14 Million
68 Gifts
18%
$48 Million
17 Gifts
63%
Gifts of $1 Million +
Gifts of $100,000 +
All Other Gifts
60% of major gifts
over $100K were
current major gifts;
40% were deferred
planned gifts
Show the Value of Planned Gifts in the Development Pyramid

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USE DATA TO EDUCATE AND INFORM LEADERS
50%
20%
1%
1%
6%
18%
4%
Planned Giving Inventory
Known Expectancies
Open Estates
Life Insurance Policies
Life Estates
Testamentary Pledges
Charitable Remainder Trusts
Gift Annuities
Provide Graphically Vivid Reports to Easily Convey Planned Gift Information

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OVERVIEW & TAKE-AWAYS
• Specific types of people are the most likely to make
planned gifts
• The busiest people in estate planning are in their 40s and
50s
• However, most charitable bequest dollars realized come
from those who die in their 80s
• Estate planning is changing and will continue to change
• Use of bequests in wills is declining; while bequests
through life insurance proceeds, retirement funds and other
financial cash reserve accounts in increasing
• Short-term planned giving trends appear rather
negative, but…….
• Future trends in planned giving are positive for the
following 25 years
• Invest time and donor-contact, have patience and the
result will change your organization!

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QUESTIONS AND CONTACT
Thank You!
For a list of resources related to this presentation, please
contact me:
Katherine Swank, J.D.
843-670-7278
(located in Denver, CO)
katherine.swank@blackbaud.com
Twitter: @KatherineSwank
LinkedIn: http://www.linkedin.com/in/katherineswank
SlideShare: http://www.slideshare.net/kswank