Nonprofit Planned Giving: 4 Commonly Asked Questions

This guide answers four common questions about planned giving for nonprofits.

For most nonprofits, donations from individuals make up the largest portion of the funding you bring in every year.

Within that category, only a small amount of income comes from a large number of small and mid-sized donors, and the rest comes from a few major donors.

While major donors could give to your organization in a number of ways, one of the most useful but most overlooked is planned giving. In planned giving, a major donor arranges to give now, but the nonprofit receives the gift after death, usually after the donor’s passing.

In this guide, we’ll answer four common questions about planned giving, including:

1. Why Is Planned Giving Important to Nonprofits?
2. How Do You Find Donors to Give Planned Gifts?
3. How Do You Build Relationships With Planned Giving Prospects?
4. What Are Some Ways to Acknowledge Planned Gifts?

Many organizations tend to look at planned gifts as just nice surprises, but actively pursuing them will allow your nonprofit to reap their benefits more effectively. Just like cultivating other major donors, outreach and relationship-building strategies grounded in prospect research are essential for your organization to make the most of planned giving. Let’s get started!

1. Why Is Planned Giving Important to Nonprofits?

The main reason why nonprofits don’t actively seek planned gifts is because they’re hard to predict. Donors aren’t obligated to reveal their intentions to give in advance, and even when a planned gift to your organization is confirmed, it can take time to figure out its exact amount.

However, planned giving is still worth pursuing because of the many opportunities these donations provide for your organization. According to DonorSearch’s guide to planned gifts,
here are a few of their main benefits:

  • They’re at the top of the donor pyramid. Along with other major gifts, planned gifts are some of the largest contributions your organization receives.
  • They allow your organization to capitalize on donor loyalty. Some donors may be passionate about your nonprofit’s mission but don’t have the financial flexibility to give a major gift during their lifetime. Arranging a planned gift allows them to make a large contribution after they’ve passed away instead.
  • They provide financial support for the future. It can be difficult to predict your nonprofit’s financial position in 10 or 20 years. But if you know that donors have arranged planned gifts to your organization, you can be more confident in your ability to continue funding your major initiatives for years to come.

Planned giving benefits donors as well. Besides providing the opportunity for a substantial tax break, arranging a planned gift allows donors to control where their money will be spent at your nonprofit and solidifies their legacy of charitable giving.

2. How Do You Find Donors to Give Planned Gifts?

Finding donors to give planned gifts is slightly different from identifying other major donors, but there’s some overlap in the process. Mainly, in both cases, your organization will need to
conduct prospect research.

If your organization has a major gift officer, they’ll take the lead on researching planned giving prospects. Many nonprofits also find it helpful to hire a fundraising consultant to guide them through the prospect research process. As outlined in Donorly’s guide to prospect research, your organization or fundraising consultant will identify planned giving prospects based on the

  • Capacity to give. Some indicators that a donor could make a large contribution include their net income, real estate ownership, stock holdings, and business affiliations.
  • Affinity for your nonprofit’s mission. A long history of involvement with your nonprofit or similar organizations and personal connections to other donors in your database may show that a donor would be interested in making a planned gift to your organization.
  • Additional demographic markers. The best planned giving prospects tend to be older in age because they’re more likely to have a will and a long philanthropic history.

There are a number of prospecting tools available that can help you identify candidates for planned giving, from your nonprofit’s CRM software to dedicated prospect research databases to social media. Use these resources to narrow down your potential donors to a smaller list of prospects before you begin outreach.

3. How Do You Build Relationships With Planned Giving Prospects?

Once you’ve identified some planned giving prospects, you’ll want to segment your potential donor list to help you prioritize communications with your top candidates. Then, you’ll need to start marketing your planned giving program.

Promoting planned gifts is often one of the more challenging areas of nonprofit marketing. To make your marketing efforts more effective, try these strategies:

  • Brand your initiative as a legacy giving program. Instead of emphasizing the required commitment, using this term promotes the benefits of planned giving for donors and the impact they can make.
  • Use multiple marketing channels. Create a dedicated page on your website for planned gifts, send out emails and direct mail messages about the program, and include a legacy giving section in your organization’s newsletter.
  • Incorporate testimonials. Ask your current planned donors if they’d be willing to share the story of why they decided to arrange a planned gift and why your nonprofit’s mission is important to them. Include these stories in your marketing materials to show prospects the benefits of planned giving.

In addition to large-scale outreach, you’ll also want to contact your top prospects individually. Send them personalized messages about the program and arrange to meet with them in-person or via video conference. If you take the time to build relationships with prospects and show that your organization values them, they’ll likely be more receptive when you bring up the idea of planned giving.

4. What Are Some Ways to Acknowledge Planned Gifts?

When a donor announces their intention to make a planned gift, it’s essential for your nonprofit to focus on donor stewardship. These notices of intent aren’t legally binding, so you’ll need to make sure the donor continues to want to support your organization long-term.

As with other major donors, start showing your appreciation by sending a personalized thank-you note and possibly a small gift from your organization. Including the donor’s name on a supporter recognition wall is a great way to thank them publicly for their gift.

When it comes to planned giving, donor stewardship is a lifelong process. Once you’ve initially thanked the donor, send them regular updates about your organization’s progress to show that
their commitment to give was a decision well made.

Although many nonprofits overlook planned giving, it’s a highly valuable source of funding for your organization. Do your research, build relationships with donors, and don’t hesitate to reach out to a fundraising consultant to help guide you through the process and answer any questions you may have. Good luck!

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