How to Talk with Donors about Planned Gifts Consultant
How to Talk with Donors about Planned Gifts & Planned Giving Terms You Should Know May 6, 2010 | 11:30 a.m. - 1:30 p.m. Katherine Swank, J.D., Consultant How to Talk with Donors about Planned Gifts Your Presenter Consultant,, Target g Analytics™, y , a Blackbaud Company p y Law degree, Drake University School of Law • Member, Arizona State Bar 20+ years as a d development l t officer, ffi including i l di • National Director of Planned Gifts, $10 million annual revenue • Lead manager, $20 Million Capital Campaign • Internal fundraising consultant to 60+ national and chapter offices • Over $215 million raised during career 10 years as adjunct faculty faculty, Regis University University, The College for Professional Studies • Masters in Global Nonprofit Leadership Program • Wealth W lth and d Philanthropy; Phil th Fi Financial i lR Resource D Development l t Katherine Swank, J.D. | Page #2 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Our Agenda Motivations of Giving g Be a Teacher and a Student Focus on Your Best Prospects Si l M Simple Marketing k ti Id Ideas th thatt Work W k Consider Your Legacy Reach Out; Get Out Ask for Planned Gifts When You Need Help from Others Katherine Swank, J.D. | Page #3 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Motivations of Giving Which Statements Are True for You? Friend, family member or colleague asked In honor or memory of a person or pet Cl th Clothes, personall ititems, ffurniture, it appliances li Urgent need in my community or the world Routine gifts to church, school, public radio, etc. Gifts to keep an organization around for future generations Largest gift possible is through my estate plan Katherine Swank, J.D. | Page #4 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Be a Teacher and a Student You checked one or more boxes? You’ve made a gift without regard to tax consequences! 65% of Americans cannot take federal tax deduction • Only O l people l who h ititemize i gett the th deduction d d ti Most people are just like you ☺ Tax consequences are not the first or even the second reason people make gifts Katherine Swank, J.D. | Page #5 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Making the Case for Bequests Many y people p p agree g that their largest g g gift to charity y would be through g their estate plan Facts about Bequests % of Planned Gifts are Bequests % of population that has a will % that have included a bequest to charity % that say they will consider doing so Average Bequest Gift Katherine Swank, J.D. | Page #6 United States Canada 90% 90% - 95% 40% - 50% 44% 7% - 8% 7% 10% -14% 27% $35,000 - $70,000 $30,000 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Future Opportunities When it comes to high net worth households, well over half say they have already made a planned gift Katherine Swank, J.D. | Page #7 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Considering Your Organization’s Legacy Program? How many y legacy g y donors does it take to g give $ $1,000,000? , , • 15 • 15 x $70,000 = $1,050,000 A person a week, k leaving l i you $70 $70,000 000 as a fifinall gift ift b becomes $7 $7,280,000 280 000 iin jjustt two years How many people did you talk to last year about making a planned gift? Katherine Swank, J.D. | Page #8 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Focus on Your Best Prospects Segment g • Constituent modeling • Organization or Industry specific T Target t market k t • By gift type Don’t blanket market multiple vehicles • Dilutes your message • Co Confuses uses your you audience aud e ce Katherine Swank, J.D. | Page #9 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Be Inclusive with Marketing Individuals that have alreadyy notified yyou of a p planned,, deferred or legacy g yg gift Those who are deemed likely to make a planned gift to your organization • Identified through an analytics project or other vendor-related scoring D Donors off stocks, t k securities iti and d mutual t l ffund d shares h no matter tt the th amountt off the th gift All board and committee members; professional-level staff members and employees l off 10 years or llonger Volunteers Donors who have made gifts at any level for 10 or more years or have given your organization 25 or more gifts including recurring/monthly gifts All donors who have made single-year gifts of $10,000 or more Katherine Swank, J.D. | Page #10 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Start by Marketing Simple Gifts Bequests q Easy to understand Easy to talk about P id simple Provide i l llanguage examples l Bequests account for 9 out of every 10 planned gifts made • But as many as 80% of these may be unknown at present • It not hard to get people to consider a gift in their will or trust • It’s hard to get people to share that they have done so • Consider the Best Marketing Practices in this presentation • Make time to reach out personally to a planned giving prospect every week Katherine Swank, J.D. | Page #11 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Start by Marketing Simple Gifts Charitable Gift Annuities 5%-6% of all planned gifts Range from $5,000 to over $1,000,000 B t annuity Best it prospectt • Existing annuitants • They know the organization • They know you • They are comfortable with the process and your stewardship Katherine Swank, J.D. | Page #12 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Start by Marketing Simple Gifts 85% of respondents p to a national survey y said that they y found out about charitable gift annuities through one of several informational channels initiated by the organization including: • written materials, • a visit with a representative, and • financial seminars Katherine Swank, J.D. | Page #13 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Start by Marketing Simple Gifts Other Gift Vehicles • Including charitable trusts Fewer than 2% of the general public Hi hl ttechnical Highly h i l gifts ift very diffi difficult lt tto market k t • Most high net worth households that have made CRTs learned about the vehicle from their financial advisor • Fewer and fewer prospects are seeking information from charities on this gift type Market only to highly qualified prospects • Don’t be surprised if they don’t come to you for advice or education Katherine Swank, J.D. | Page #14 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Goal of Planned Giving Mass Marketing The #1 g goal of planned p gift g marketing g is to get g a face-to-face appointment pp with an interested prospect Planned gift marketing is a small part of your overall planned giving program and should be conducted in conjunction with personal visits to top prospects Successful planned giving programs are active and build relationships with top prospects • Passive marketing produces passive results Combine your Annual Giving and Planned Giving cultivation, solicitation and stewardship efforts to achieve the best results R l on marketing Rely k ti as your second db bestt method th d off obtaining bt i i planned l d gift ift prospectt leads • The best method of gaining qualified leads is through personal discussions with i h prospects • Referrals from other development officers are also very effective Katherine Swank, J.D. | Page #15 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Contact Conversion Rates Face-to-face visits are byy far the most effective wayy to close planned p g gifts Activity y % of Contacts to Gift Gifts Personal visits (face to face) 30% Personal Telephone p Conversations 20% Mail/Phone contact by a vendor service Mass Mail Marketing (newsletters, postcards, etc.) Katherine Swank, J.D. | Page #16 5% - 10% <1% © 2010 Blackbaud How to Talk with Donors about Planned Gifts Marketing Ideas that Work Create a marketing gp plan that works for y your organization g • Do not rely on what others do • Find your best combinations of marketing activities that produce results Targeted Marketing • Market simple planned gifts to the right prospects • Simple message • Single subject brochures • Eliminate technical language For all marketing pieces • Sell big, write small • Use few words to market a big concept • In I marketing k ti materials, t i l it iis th the giving i i concept, t and d nott itits ttechnical h i l operation, that will promote interest Katherine Swank, J.D. | Page #17 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Marketing: Start by Learning You Are Your Own Example p Get on other organization’s marketing lists Watch your own reaction to their cultivation and solicitation D t Determine i why h you reacted t d th the way you did • What did you like about the action? • What didn’t you like? If you felt motivation to respond, determine the element of the piece that moved you Determine ete e how o ca can you use tthis s lesson esso when e ta talking g to p prospects ospects Katherine Swank, J.D. | Page #18 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Donor Stories and Their Motivation Are the most effective marketing g tactic for planned gifts Focus on your message Tell stories, stories capture hearts It is about why the legacy was made, not the amount of the gift C ti iinterest Creating t t and d appeall • Make it personal More examples can be found at www.leavealegacy.org Katherine Swank, J.D. | Page #19 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Effective Visual Components Use visual aids that p promote yyour mission Evoke emotion or memories Show how the gift will provide impact Katherine Swank, J.D. | Page #20 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Personal Letter Dear Mr. Smith, This is quite a difficult letter for me to write and I do so with the hope that you will read it over carefully, consider what I have to say and give me your honest reaction to it. it First, let me introduce myself. I’m Jeff Liba, Director of Individual Giving for Grant MacEwan College. In my position here, it is part of my responsibility to help p MacEwan ensure the every y student in Alberta that desires an advanced education to fulfill his or her potential receives one. To do this we are reliant not only current giving but also on future income from legacies. I can only do this by directly asking existing supporters if they intend to leave money to MacEwan in their will or estate planning. That is the reason why I am writing to you. . . . . Make it Personal Write a letter to one person • Use your own experience • Use a donor’s experience • Ask a surviving family member • Ask a recipient of services for quotes Ask for a response • Provide the reply device . . . . And that is why I have to ask you this important question – one that I hope you don’t mind me asking. Can you consider leaving a bequest to Grant MacEwan College in your will? You see,, y your support pp may y make the difference in helping students like Angela. The need will never go away. We know that no matter how prosperous . . . . Katherine Swank, J.D. | Page #21 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Give the Donor a Reason to Notify • Most donors don’t even realize that their intended beneficiaries would like to be informed, or why it is important to tell “If you have made an estate provision for the Gardens, or a planned or deferred gift, gift please let us know so we can welcome you into the Perennial Friends Society and make sure your gift intentions are properly carried out.” Katherine Swank, J.D. | Page #22 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Donor Contact Goals Amount of Time Devoted to PG Activities 25% or Less 25% - 50% 50% or More A ti it Activity # Average g Monthly y Appointments* Personal visits 1-5 Contact at Events 1-5 Telephone Conversations 6-10 Personal Letters 6-10 Electronic Mail Contacts 6-10 Personal visits 6-10 Contact at Events 1-5 Telephone Conversations 11-15 Personal Letters 11-15 Electronic Mail Contacts 6-10 Personal visits 6-10 Contact at Events 5-15 Telephone Conversations 16-20 Personal Letters 11-15 Electronic Mail Contacts 6-10 * National survey results Katherine Swank, J.D. | Page #23 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Know How to Reach Your Goals If yyou have a goal g of closing g 20 g gift annuities or g getting g 20 confirmed bequest q intentions/trust beneficiary designations in a year through personal contact • You will need to meet with a minimum of 60 prospects per year • 5 per month x 12 months If your conversion rate from phone contact to appointment is 4:1 you will need to talk to 240 people a year to get those 60 appointments If your conversion i rate t ffrom callll attempts tt t tto completed l t d calls ll iis 5 5:1 1 you will ill need d to attempt 1,200 calls per year to reach 240 people • 23 calls per week or 5 calls per day Set aside a minimum of 1 hour per day to make prospect/donor calls Katherine Swank, J.D. | Page #24 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Katherine Swank, J.D. | Page #25 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Make Your Planned Gift Commitment When y you make yyour own legacy g yg gift yyou become: • An expert on the topic • An advocate for the gift vehicle, not a solicitor • A lik like-minded i d d ffriend i d tto others th who h also l make k and d consider id planned l d gifts ift • A living example • A resource Katherine Swank, J.D. | Page #26 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Make Your Planned Gift Commitment Planned g gifts that yyou can make with little or no cost • Bequest or codicil – when making or updating your will add your charitable gifts • Beneficiary designation for • Retirement account • Life insurance – dollar amount or percentage • Pay on death – bank accounts for instance Katherine Swank, J.D. | Page #27 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Reach Out; Get Out Think of this as dating! g You make the first move Ask for a personal visit Create “natural” natural opportunities to contact • Recent gift • Event attendance • Loyalty benchmarks • Reply cards to PG marketing Katherine Swank, J.D. | Page #28 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Reach Out; Get Out I m calling to thank you… you ” “I’m “We’re We re reaching out…. out ” Your opinion – your “Your thoughts – your input…” “We met at the …….” “The President suggested I call y you…” Katherine Swank, J.D. | Page #29 “Would you be available to meet with me for lunch next week?” © 2010 Blackbaud How to Talk with Donors about Planned Gifts Reach Out; Get Out “I’m new to the organization . . . hope to meet as many loyal d donors as iis possible ibl iin the h next ffew weeks. k . . Th The president id has suggested that you would be a very important person for me to meet. meet . . I’m I m hopeful that you might have 30 minutes in the next two weeks to meet me for breakfast, lunch, or another convenient time.” Katherine Swank, J.D. | Page #30 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Reach Out; Get Out Be p prepared p to overcome the most common objections j • Can’t give you a gift right now “I am not coming to ask you for a gift. I would like to introduce myself y and learn about yyour association with us and update you. . . I don’t feel it would be proper to ask you for anything at this visit. I can assure you that I will keep my promise and not ask for nor accept any gift at this time.” Katherine Swank, J.D. | Page #31 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Reach Out; Get Out Be p prepared p to overcome the most common objections j • Can’t meet with you now “II understand that you you’re re busy and I appreciate your honesty . . . We’re taking time to talk to as many people as possible . . . Would you be able to schedule lunch or a quick meeting at the end of the month?” Katherine Swank, J.D. | Page #32 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Reach Out; Get Out First date • Usually informal • Meet at a neutral setting like a restaurant or a café • Unless U l you h have a greatt ffacility! ilit ! Objective • Learn why the prospect is involved • Explore his/her interest in programmatic areas • Explore his/her interest in the community Katherine Swank, J.D. | Page #33 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Listen More Than You Speak Use a series of open-ended p questions q • What first brought your attention to our organization? • What have been your past experiences with our organization? • Are you receiving any of our publications? Did you see the last issue? What article or story was most interesting or most hopeful to you? • What do you think we do best? • Is there any area of the organization where you could see yourself becoming more involved? Katherine Swank, J.D. | Page #34 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Talk about Giving Decisions Find out why y this p prospect p is involved in g giving g • How did you come to include our organization in your charitable giving? • Are there other organizations that are important to you as well? • What is the single most important reason you continue to contribute to us? Ask general questions about planned giving • We’ve found many of our supporters are also choosing to make charitable gifts in their estate plan – have you ever thought about including a charity in your estate plan? If the prospect says “Yes” • Have you ever thought of including our organization in your estate plan? Katherine Swank, J.D. | Page #35 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Keep the Relationship Going Take the opportunity pp y to set a second meeting g • Most people like to tell you what they think • Most people want to get further involved insider • Most people want to know more and feel like an “insider” Create events and seize opportunities to allow your prospects these things Have a calendar of things/events to offer • Keep it small and personal • You are looking for a second meeting not a short “meet and greet” Katherine Swank, J.D. | Page #36 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Other Meetings Be creative and appropriate pp p • Back at the café • Tour • Meet M t with ith an expertt • See something in action If others are involved, meet alone before you part • Go to the cafeteria • Sit in the atrium • Walk in the garden and find a nice place to sit Katherine Swank, J.D. | Page #37 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Asking for Planned Gifts Prepare for the ask; be confident and review your steps Targeted likely prospects with information about specific gift types Your prospect has responded favorably to the information You know mission components most interest him or her You have told the story of your own planned gift You have shared information about the levels of funding that are needed to supportt his hi or h her areas off iinterest t t Where appropriate, involved leadership and key players Katherine Swank, J.D. | Page #38 © 2010 Blackbaud How to Talk with Donors about Planned Gifts When it’s Time to Make the Ask Katherine Swank, J.D. | Page #39 The most simple p ask is to p prospects p who yyou expect to make gifts of less than $100,000 Can be informal or formal • “As As you plan for the future future, would you consider making a legacy gift to us? A gift of $70,000 or higher will make the impact you are interested in. We would expect a gift of that size to affect the lives of thousands.” • “In In addition to your ongoing annual support, would you join me as a Legacy Society member? Our average bequest gift is usually between $15,000 and $30,000. Are you in a position to consider a gift of that amount?” • “If If it would be helpful, I can provide you with sample gift language for your review and consideration.” © 2010 Blackbaud How to Talk with Donors about Planned Gifts When it’s Time to Make the Ask Larger g p planned g gift asks are often formal Use a proposal that provides additional information: • Case statement on planned gifts • Formal ask letter and ask amount • Representative donor legacy story or description of the expected impact of the future gift • Short list of the gift restriction language that you prefer, including your desire for unrestricted gifts • “In In addition to your ongoing annual support, support II’d d like to ask you consider joining me as a Legacy Society member. Your desire to see a steady increase in our services can be met with a legacy gift at the $200,000 level or higher. I’ve I ve gathered some information that I think you will find useful and I ask you to read and consider our proposal.” • “If you don’t mind, I’ll follow up with you at the end of the week. If you have any additional questions or would like more information before then please contact me.” Katherine Swank, J.D. | Page #40 © 2010 Blackbaud How to Talk with Donors about Planned Gifts You Already Know 95% of What there Is to Know Usually y sample p bequest q language g g or simple p instructions are all that is needed • Include a disclaimer that information is educational; should consult advisor of their own choosing Most gifts are bequests in a will or trust • Most planned gifts are gifts of cash Nearly seven out of ten bequests is a residuary provision • Two T off the th remaining i i th three are a specific ifi gift ift • That leaves one in ten that will be a percentage gift or a contingent gift or something else Gift annuities are contractual and standard • Most gift annuities are funded with cash • Others are funded with stock Katherine Swank, J.D. | Page #41 © 2010 Blackbaud How to Talk with Donors about Planned Gifts A SIMPLE Glossary of Planned Giving Terms Charitable Bequest q • A provision in a will, trust or estate plan that allocates a gift to a designated charity • Specific amount (i.e. $10,000) • Percentage amount (i.e. 25% of my estate) • Remainder amount/Residual amount (i.e., after other bequests have been paid……. The remainder to X charity) • Contingent bequest (i.e. gift is made as an alternate provision to a superseding directive) Ch it bl Gift A Charitable Annuity it (CGA) • Irrevocable transfer of cash/property in exchange for a contract to pay the donor/designee for life or a number of years; partial gift/partial income Pl Planned d Gift (Pl (Planned d Giving) Gi i ) • Once called deferred giving. Any charitable gift that requires more thought and planning to execute than the average donation B Bequest t IIntention/Planned t ti /Pl d Gift Intention I t ti • Donor’s non-binding indication of an intent to leave a future gift Katherine Swank, J.D. | Page #42 © 2010 Blackbaud How to Talk with Donors about Planned Gifts A SIMPLE Glossary of Planned Giving Terms Bequest q Notification/Planned Gift Notification • Estate representative’s official notice that a bequest or other estate gift has come to realization Bequest Expectancy/Planned Gift Expectancy • Used within a planned giving program to unofficially report the potential value of a gift to be received in the future Charitable Remainder Trust (CRT) • Irrevocable trust that pays a specific annual amount to one/more person(s) for a fixed period (often the life of the donor(s)) • Annuity Trust (CRAT)provides a fixed payment as determined by the trust document • Unitrust (CRUT) provides a variable payment usually recalculate annually based on the value of the trust Charitable Lead Trust (CLT) • Similar to a CRT except current payments are made to the charity and the principle reverts to the donor/designee Katherine Swank, J.D. | Page #43 © 2010 Blackbaud How to Talk with Donors about Planned Gifts A SIMPLE Glossary of Planned Giving Terms Capital p Gains • Investments held for longer than a year then sold or gifted are subject to taxation on the gain of value • Investments that have lost value have a capital loss Split Interest Gift • Usually property or business interest; idea is to gift a portion/keep a portion Life-Income Life Income Gift • Generic term for a variety of gifts that provide an income, usually for life, to a donor/ designee. CGAs, s, CRTs C s and a dC CLTs sa are ea all life-income e co e g gifts ts • CG Katherine Swank, J.D. | Page #44 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Getting Help From Others Look to y your Board for expertise p • Development committee Network at this meeting ☺ A k for Ask f referrals f l off local l l advisors d i Find a mentor Read articles and books on planned giving vehicles • Marketing and Qualifying Leads • Getting face-to-face with prospects • Simple planned gift topics Katherine Swank, J.D. | Page #45 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Summary Decide which p planned g gift vehicle(s) ( ) are right g for yyou Focus your efforts Make marketing simple M k your own planned Make l d gift ift commitment it t Plan success by making outreach your #1 responsibility Get out and date! Open-ended questions – enjoy your time with people Ask for the commitment Katherine Swank, J.D. | Page #46 © 2010 Blackbaud How to Talk with Donors about Planned Gifts A Few References Starting g and Enhancing g a Planned Giving g Program g • Example Blackbaud White Papers: • • • • • • Are Your Ready to Start a Planned Giving Program? How to Talk with Donors about Planned Gifts 23 Planned Giving Terms you Should Know How the Right Marketing Strategies Can Enhance Your Planned Giving Program Why You Need Gift Acceptance Policies http://www.blackbaud.com/resources/white-papers.aspx • Written resources: Partnership for Philanthropic Planning • http://www.pppnet.org/ htt // t / • Courses: The Fundraising School at The Center on Philanthropy at Indiana University • http://www.philanthropy.iupui.edu/TheFundRaisingSchool/CourseDescriptions/pla nnedgiving.aspx Katherine Swank, J.D. | Page #47 © 2010 Blackbaud How to Talk with Donors about Planned Gifts Questions Contact me: Katherine Swank, J.D., Consultant Based in Denver Denver, Colorado _______________________________________________________ Target Analytics, a Blackbaud Company 2000 Daniel Island Drive Charleston, SC 29492 Phone 843.216.6200, ext. 3926 | Fax 843.216.6100 katherine.swank@blackbaud.com katherine swank@blackbaud com www.blackbaud.com/targetanalytics www.twitter.com/katherineswank Katherine Swank, J.D. | Page #48 © 2010 Blackbaud
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