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What's Your Legacy? Implementing a planned giving program

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What’s your legacy?
Implementing a planned
giving program
Lisa M. Chmiola, CFRE
October 14, 2020
Nonprofit Hub

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About Lisa:
Lisa M. Chmiola, M.S., CFRE, has nearly 19 years in
philanthropic development experience:
• Major and planned ...

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What we will cover:
• Background on planned giving
• Structure to support a successful legacy giving program
• Prospecting...

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What's Your Legacy? Implementing a planned giving program

  1. 1. What’s your legacy? Implementing a planned giving program Lisa M. Chmiola, CFRE October 14, 2020 Nonprofit Hub
  2. 2. About Lisa: Lisa M. Chmiola, M.S., CFRE, has nearly 19 years in philanthropic development experience: • Major and planned giving roles in education (public and private) and religious institutions, following initial career experience in event-based philanthropy • AFP Master Trainer since 2014 • Presented at four AFP International Conferences, and a variety of AFP and other industry association regional conferences, chapter meetings, and webinars. • Adjunct instructor in Rice University’s Center for Philanthropy and Nonprofit Leadership. As Chief Fablanthropist for Fablanthropy (fablanthropy.com), she is available for consulting, training, and 1:1 coaching opportunities.
  3. 3. What we will cover: • Background on planned giving • Structure to support a successful legacy giving program • Prospecting for and documenting of planned gifts • Common objections to planned giving • Communication and stewardship strategies • Next steps to implement www.fablanthropy.com
  4. 4. Why is planned giving so scary? • Spoiler alert: everyone dies! • Contemplating legacy is a long, emotional process • Psychology of planned giving has been extensively researched by Dr. Russell James: www.encouragegenerosity.com • Impostor syndrome: planned giving often viewed as complex www.fablanthropy.com
  5. 5. What exactly IS planned giving? • Planned giving/gift planning/legacy giving • “The act of making a commitment to give a charitable organization a major gift, over time or at death, as part of the donor’s overall financial and estate planning.” – The Fundraising Authority, LLC • “The integration of personal, financial, and estate planning concepts with an individual donor's plan for lifetime or testamentary giving.” – Association of Fundraising Professionals Sources: http://www.thefundraisingauthority.com/planned-giving/launch-planned-giving/ http://afpglobal.org/topics/planned-giving
  6. 6. Most common planned gift vehicles • Bequests • Gift made via a will; can be a set amount or percentage, or remainder of estate (“remainder beneficiary”) • Estimated $43.21 billion in 2019, or nearly 10% of all giving, per Giving USA 2020 • Make sure your organization has sample language available for donors/advisors who may not contact you: • Example: “I (we) hereby give, devise, and bequeath the sum of $__________ (or _____ percentage of….. or residual of my estate) to Organization, address, tax ID, or its successor organization, for its general purposes (unrestricted) or for (specific purpose e.g. endowed fund). Sources: https://givingusa.org/tag/giving-usa-2020/
  7. 7. Most common planned gift vehicles • Beneficiary designation on retirement account • Gift made by naming organization through administrator of account (e.g. Vanguard, Fidelity), therefore, easy to change • Avoids income & estate taxes • Must be a percentage of proceeds, not specific dollar amount • When working with donors, be aware if your organization is a primary or contingent beneficiary • Contingent or secondary/tertiary beneficiaries only receive funds if primary beneficiary does not Source: https://www.letsmakeaplan.org/blog/view/lets-make-a-plan-blogs/leaving-a-charitable-legacy-with-an-ira
  8. 8. Most common planned gift vehicles • Gifts of insurance • Simplest: name organization as a beneficiary on policy • Whether a group term (e.g. employer provided) or individually-owned policy • More complex: Donor can also name organization owner of individually-owned policy (irrevocable) • If policy is not paid in full, charity would need to continue to make premium payments or policy may lapse; donor may make cash gifts to offset this • If policy is valued at more than $5,000, a qualified appraisal will be required Source: https://charitablesolutionsllc.com/new-book-charitable-gifts-of-noncash-assets/
  9. 9. Other planned gift vehicles • Charitable Gift Annuities • Trusts • Real Estate • Gifts of real property (e.g. artwork, jewelry) Source: https://charitablesolutionsllc.com/new-book-charitable-gifts-of-noncash-assets/
  10. 10. But first, build a solid foundation Before embarking on a planned giving program, assess these aspects of your organization: 1. Donor Base – solid annual support, moving into major gifts work 2. Leadership Support – both staff leadership and board of directors 3. Strategic Plan – ensure your organization has a plan for the future 4. Gift Acceptance Policy – what kinds of gifts will you accept? 5. Staffing – who will handle day-to-day work of PG? 6. Communication Plan – for organization overall 7. History – at least 10 years’ existence is recommended 8. Patience – results may not show for 5-10 years Source: https://afpglobal.org/topics/planned-giving
  11. 11. Who are planned gift prospects? • Existing legacy donors • Organizational leadership (volunteer and staff) • Loyal donors • Younger donors • YOU! www.fablanthropy.com
  12. 12. How to document planned gifts? • Why is documentation important? • Confirms donor’s wishes are known • Clarifies if donor is comfortable with being acknowledged for gift • What should be documented? • Contact information (donor/executor/advisor) • Gift intent (unrestricted vs. restricted) • Gift vehicle and value (if known and willing to share) • Permission for public recognition/request for anonymity • Example: https://louisiana.giftlegacy.com/org_files/2013/pdf/planned%20giving%20form%20fillable.pdf www.fablanthropy.com
  13. 13. How to document planned gifts? • Additional materials can include: • Copy of donor’s will, beneficiary designation, insurance policy • Gift agreement • Correspondence with donor • Additional considerations: • Storage of document hard copies – fireproof • Storage of electronic information – backups • Who has access to each? www.fablanthropy.com
  14. 14. What if they object? • What about my family? • I’m not wealthy; why would I give this way? • I don’t have a professional to assist me. • Won’t making a bequest be costly to me? • I don’t want my plans to be known. Source: https://bloomerang.co/blog/obstacles-ahead-dealing-with-objections-to-planned-giving/
  15. 15. How to communicate your plan? • Inclusion in existing marketing/communications/proposals • On response devices, include check box at minimum for “I have already included organization in my legacy plans.” • BONUS: “I would like information on including organization in my legacy plans.” • When feasible, consider a planned gift component in a major gift proposal, especially for endowed fund gifts. • Targeted planned giving communications • How will responses/inquiries be handled? • What is the procedure for receipt of a notification or gift? www.fablanthropy.com
  16. 16. Stewardship … it’s for life! • Likelihood of gifts realized in your tenure = low • Upon notification: • Prompt and appropriate acknowledgement • Attention to documentation/record keeping • Over time: • Regular visits/conversations when/where feasible • Inclusion in important communications • Invitations to events • Engagement as volunteers www.fablanthropy.com
  17. 17. What we covered & action steps • Continue to educate yourself/team on planned giving: • Local planned giving council • National Association of Charitable Gift Planners: https://charitablegiftplanners.org/ • Encourage Generosity (Dr. Russell James’ research): http://www.encouragegenerosity.com/ • Find a mentor or coach • Assess your organization on foundational items: • Donor base • Board support • Strategic plan • Gift acceptance policy • Staffing www.fablanthropy.com
  18. 18. What we covered & action steps • Build a prospect list • Create/evaluate documentation plan • Explore objections • Build communication plan • Create stewardship strategies www.fablanthropy.com
  19. 19. Questions? Let’s connect: www.fablanthropy.com • links on Resources page • sign up for Fabulous + Philanthropy on Contact page @fablanthropy (Facebook, Twitter, Instagram) lisa@fablanthropy.com

Editor's Notes

  • First, your donors have to accept their mortality. Depending where they are in life, they may not be ready to acknowledge they won’t live forever! But planned giving offers a way for donors to live on through a philanthropic legacy, to make an ulitmate gift to the causes that meant most to them during their lives. It’s a chance to help them see that having a plan and a say so in what happens with their assets is good.

    That being said, even when they get to the point of working on their estate, it’s not going to be finalized overnight. Even to prepare a will, one must take stock of their assets, decide who will receive them (people and organizations), and finalize all the details. It takes time! Some gift vehicles are easier to implement, and we’ll talk about that in a bit, but don’t expect an immediate result. That can often scare both donors and fundraisers off.

    Finally, it’s a myth that to be able to work on a planned gift that you need a law degree or years of specialized experience. We’ll talk some today about the most common types of planned gifts and what any nonprofit professional should know to be able to work with these assets, and where to go when more complex gifts come your way.
  • Trend in recent years to refer to planned giving as gift planning-rebranding of the national association. Recognizes the fact that these gifts often involve a donor’s professional advisor. You also see references to legacy giving, which speaks to the fact that these gifts accomplish a donor’s legacy.

    Definition shows the importance of strategy in this type of giving.

  • CGAs-have to be licensed
    Trusts, gifts of real estate often can involve third parties. Need to be clear about what you will and won’t accept which leads us to…
  • CGAs-have to be licensed
    Trusts, gifts of real estate often can involve third parties. Need to be clear about what you will and won’t accept which leads us to…
  • CGAs-have to be licensed
    Trusts, gifts of real estate often can involve third parties. Need to be clear about what you will and won’t accept which leads us to…
  • CGAs-have to be licensed, look for a foundation
    Trusts, gifts of real estate often can involve third parties. Need to be clear about what you will and won’t accept which leads us to…
  • Donor Base-solid base of annual support, beginning move into major gifts as well.
    Board Support-critical to have support from top down
    Strategic Plan-where is your organization going? Will it still be around when these gifts come in?
    GA Policy-What kind of gifts will you accept? Are you set up for these? Endowments, annuities etc.
    Staffing-who on team to handle? Dedicated person? Consultant?
    Comm Plan-particularly for the organization. Will talk about one for PG later today.
    History-need at least 10 years of org history. Again, need to prove you’ll be around.
    Patience-PG can take 7-10 years to show fruits of efforts. Can take years to secure commitments. Hang in there!
  • Do you already have donors who have informed you of inclusion? Learn why they gave, who else they know
    Lead by example; volunteers can also assist with identifying prospects by inviting to join them in giving
    Loyalty is a key indicator; who are your 10+ year consecutive? Even at just $100 a year they have shown loyalty and love
    Young donors can often easily name as a beneficiary; start the relationship now and grow it during their life, they will remember!
    Best leading by example is your gift! Makes it easier to talk to donors about how to do it too.
  • Assess what files exist and establish a system. No gifts or system? You get to build it. Also recommend creating even a simple spreadsheet to log inquires and commitments as they come in. CRM? Even better.
  • If donor is hesitant to give full will, just pages where you are mentioned with other info redacted works. You’ll get a full copy when the estate is realized.
    Gift agreement especially helpful for bequests and in cases where donor has something specific they want gift to accomplish.
    Be wise about who has access to files especially of anonymous donors
  • Of course family, hope you’ll think of your favorite orgs who were part of your life too.
    Gifts can be made of any amount
    Be careful if you recommend to provide multiple professionals; local gift planning council another source
    Some ways are zero cost e.g. beneficiary; also gift agreement reduces need to revise will
    You may remain anonymous
  • How are you communicating now? How can you integrate into existing materials (AF fund check box, ads in magazines)?
    Targeted: Will you do yourself or hire a vendor? Determine what is the right mix: Mail, email, online.
    Who will handle inquiries? What will your follow up be?
    What happens when a will shows up? Talk about SAA procedures.
  • Consider a legacy society. Gives a way to market efforts and as group grows, chance for group stewardship

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