The planned giving program landscape is made up of an extraordinary variety of missions, sizes and philosophies. While there are no cookie-cutter answers to success, well-run programs do share numerous common elements.

By reviewing these elements in three key areas, planned giving professionals can learn ways to better cultivate success for existing or newly established programs.

As nonprofits, charities, public foundations, and other 501(c)(3) organizations seek to raise funds from private donors, they may be offering Charitable Gift Annuities (CGA) and Charitable Remainder Trusts (CRT).

PNC has a group dedicated to the specialized services required to effectively administer and invest CGA and CRT programs. Our goal is to help nonprofits reallocate the time spent on administration to focus on their overall mission.

Lay the Foundation, Build the Infrastructure, Execute the Program

Lay the Foundation 

Strong and enduring monuments are built on solid foundations. Similarly, building a lasting and effective planned giving program requires laying down a durable foundation for your organization that is in sync with your mission.

Before embarking on any fundraising program- especially a planned giving program designed to help your organization long term- it is important to have clear vision and mission statements. These guiding principles are key for your employees, volunteers and donors to help understand your core beliefs and establish the long-term direction that ultimately should guide daily operations.

Once it is clear what drives your organization’s mission, you can now develop a fundraising plan. This written plan outlines the goals and tactics needed to fund your mission and is important regardless of your organization’s size or level of sophistication.

Without a written plan, it is far too easy to function constantly in panic mode as new needs arise.

When crafting your plan, think about the commitments you have made (and would like to make) to further your cause—and, just as importantly, the monetary amounts you foresee to need. For the success of your organization, you will need to consider your short- and long-term goals and possible ways of funding them.

Organizations draw upon many funding tactics, including events, annual drives, corporate and foundation grants, major donor solicitation, and bequests and life income planned giving programs. There is no shortage of ways to raise funds, but what types of gifts best further your mission?

Build the Infrastructure

Many of the tactics above target funds raised in the short-term, but a planned giving program targets funds that will benefit your organization for years to come. They can be used as broadly as endowment building to those more targeted to future projects. Once you’ve determined that a planned giving program makes sense for your organization, it is important to move forward in a thoughtful, deliberate way.

For many organizations, maintaining a planned giving program in a more passive manner may be the best way forward.

Bequests can be a natural starting point for organizations to kick off a planned giving program. Not only do they represent a vast majority of dollars raised, but they can be the simplest to implement.

For a bequest program, your organization does not need to worry about ongoing management of life income gifts, but can enjoy the end result. That being said, even with a passive program, your organization will need to have some level of commitment. This can be as basic as a communication plan which lets your constituents know that you can receive bequests and someone at the organization who can answer questions. For example, if you run an article in your newsletter stating how a bequest gift would benefit your organization (along with standard language a donor could use in their will), you should have a knowledgeable person in place to answer any questions and work through the bequest administrations as needed.

For those organizations with a higher level of sophistication in their fundraising plans and donor and prospect pools, a life-income gift program may make sense. The first step to determine this is an honest look at your leadership and donor and prospect pool. Several questions to ask include:

  • How supportive is your senior management and board?
  • How long has your organization been in place?
  • What are the demographics of your donor base?
    • What is the average age?
    • Are you getting new donors or are you relying on established donors?
    • What proportion is male vs. female?
    • In what states do the majority of your donors reside?
  • What are the characteristics of your gifts?
    • Annual vs. major?
    • Repeat (loyal) donors?
    • Size of gifts?

While it is important with any type of gift received,  the complexities of a life income gift program highlight the need for a strong gift acceptance policy. As the written fundraising plan helps avoid panic mode on the front end, a well-crafted gift acceptance policy can help avoid regret after accepting a particular gift. Creating a gift acceptance policy should be a collaborative process incorporating feedback from all stakeholders- development staff, finance staff, senior leadership, and the board.

And, as every other step in the process is unique for each organization, it is important to create a gift acceptance policy that makes sense for your particular needs.

Components of a gift acceptance policy to consider:

  • Types of assets to receive, such as cash and marketable securities, real estate, collections, or art
  • Minimum and maximum size of gift
  • Types of gifts to receive can include outright only, pledges, bequests and other estate designations, charitable gift annuities, charitable remainder trusts and charitable lead trusts
  • Specific to life income gifts:
    • Types of life income gifts to offer
    • Minimum and maximum ages for gift and payouts to begin
    • Maximum rates to be paid
    • Minimum and maximum time periods for term gifts
  • Sub-committee staff needed to review gift if out of normal compliance

A written gift acceptance policy will help your organization create a consistent experience for donors while confirming that gifts are only accepted that further your mission. Additionally, it can serve as a guideline for well-meaning but unsophisticated donors.

It should go without saying that senior leadership and board support are paramount for any fundraising plan, but this is especially true for a life income gift program. A life income program involves greater and longer term involvement from an organization than from just about any other type of gift.

Organizations with successful planned giving programs have a variety of staff solutions in place. However, the constant is that there is a staff member who has some level of dedication to this gift type.

Traditionally, planned giving staff were well versed  in the technical aspects of gifts. They were often attorneys or accountants who were comfortable in the complexities of the legal and tax code for these individual gifts. The tide has turned now towards staff who understand not only the basics of these gifts, but more importantly can build relationships with donors to truly understand not only what makes them passionate about your organization, but can also merge your needs along with the donor’s needs. For more complex technical details, these relationship managers/gift officers can turn to others professionals, either internally or externally.

Along the staffing spectrum, organizations can consider a variety of structures which make sense to them. For some, this means a dedicated planned giving person or team. For others, it may make sense to combine job functions, such as one that incorporates both major and planned giving responsibilities. However, a recent combination we have seen is to combine annual and planned giving responsibilities. In many ways this can make more sense than the combination with major gifts. Studies have shown that great planned giving prospects are those who have been loyal annual givers, even if those gifts have been nominal on an annual basis. These donors truly love your organization.

Lastly, it is important to note that consistent resources are a key to a strong program. Cultivating a successful planned giving program is not a short term endeavor—it can take years of marketing and communication before the first gift is realized.

Consistency in budgets helps maintain an environment of sustained efforts in educating donors that you are available for them when it makes sense for them. Anecdotally, many planned giving officers meet with donors who have collected materials for years before agreeing to a visit and gift.

Execute the Program

As you begin to execute your plan to build a planned giving program, you should go back to your mission goals and organizational resources (current and planned) to guide the phase of program that best suits your organization.

Phase 1:

Bequest and Beneficiary Designation: A wills and bequest program can be implemented through educational efforts, marketing and public relations. You may want to include outright gifts of appreciated securities and real estate as part of this phase. For some organizations, this may be appropriate and the most prudent phase in which to stay.

Phase 2:

Life Income Gift Program: This phase requires an advanced understanding of gift planning options and a long-term commitment of resources to develop. Its implementation may follow in the wake of achieving success in Phase 1. With this phase your organization takes on additional considerations, including financial liability and state registrations.

Phase 3:

Charitable Gift and Estate Planning: This is the most proactive phase as it builds upon Phase 2 while enlisting the help of external donor advisors. It requires sophisticated conversations with the donor and his or her advisors to benefit the organization while fitting in with the donor’s estate planning.

These phases of a planned giving program are not mutually exclusive, nor are they written in stone. Many organizations see their planned giving programs ebb and flow due to financial or personnel resources.

In fact, many organizations see that their bequest program even strengthens with the addition of a life income gift program. Donors receiving regular checks or direct deposits with your organization’s name and logo keeps you top of mind and is great stewardship.

The In-House vs. Outsourcing Question

In choosing how to execute your life income planned giving program strategy there are a plethora of choices for moving forward.

Doing Everything In-House, Most Organizations, Outsourcing Everything

This decision, like all others regarding a life income gift program, hinges on what makes sense for your organization, mission and resources.

To bring in a gift, there are many companies and consultancies available to assist with the full gift process. These groups can assess your mission and donor database to see if a life income program makes sense and then help you identify best prospects for the variety of instruments. There are also groups who can develop (and execute) your entire marketing plan from timing to materials to even building an interactive website. Finally, if it is determined that resources are better served elsewhere, consultants exist to act in effect as “Planned Giving Officer for hire,” serving as the face for your donors in these discussions.

Additionally, once the gift has been secured there are several companies that can serve as a “silent back office” administering or offering a full service administrative and investment solution. On the administrative front, these companies should serve as an important partner for your stewardship efforts. They will be charged with keeping the promises you have made to your donors in terms of payments and tax reporting. For the investment management, look for companies who offer professional solutions that are mindfully prepared with your specific program and organizational characteristics in mind.

While programs can be successful anywhere on the continuum, we find that typically:

  • Mid to large-size programs are the ones to most take advantage of outsourced solutions
  • Smaller programs may benefit more from the upfront help of preparing for a gift
  • Larger programs may desire additional help on the marketing front but really see a benefit from hiring for the administration and investment management as their program grows in assets and complexity.

Whatever the program size, a variety of solutions exist to help organizations truly focus internal efforts on fundraising objectives and mission.

Whether your organization is just beginning a planned giving program or you have had an effort in place for years, one thing is certain – for your program to be successful, you have to plan. Reviewing these guidelines may help you cultivate a successful planned giving program.

For more information, contact Chris McGurn, Planned Giving Group Manager, at christopher.mcgurn@pnc.com.