The planned giving program landscape is characterized by an extraordinary variety of missions, program sizes and philosophies. While there are no “cookie-cutter” paths to program success, well-run programs do share several key elements, in our experience. By reviewing three key areas, planned giving professionals can learn ways to cultivate success for existing or newly established programs.

As charities, public foundations and other 501(c) (3) organizations seek to raise funds from private donors, they may offer charitable gift annuities (CGAs) and/or charitable remainder trusts (CRTs). PNC Institutional Asset Management® has a team dedicated to providing the specialized services required to effectively administer and invest CGA and CRT programs, the PNC Planned Giving Solutions Group. This team’s goal is to help nonprofit organizations reallocate the time spent on program administration and investment, to focus on their overall mission.

1. Lay the foundation

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

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

Once it is clear what drives your organization’s mission, you can begin to develop a fundraising plan. This written plan outlines the goals and strategies 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 be reactive or make missteps 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 needing to accomplish your objectives. For the success of your organization, you will need to consider both your short- and long-term goals, and various funding sources.

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

2. Build the infrastructure 

Many of the strategies referenced above tend to target funds raised for the short term, but a planned giving program targets funds that can benefit your organization for years to come. They can be used for broad purposes such as to help bolster an endowment to those more targeted, such as future projects.

Once you have 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 many organizations to help begin a planned giving program. Not only do bequests represent the majority of planned gifts, but they can also 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 to fulfill your donor’s dreams and your organization’s mission. That said, even with a passive program, your organization will need to have a certain level of commitment. This can be as basic as a communication plan that lets your constituents know you can receive bequests and who at your organization can answer questions. For example, you might consider including an article in your newsletter or on your website stating how a bequest gift would benefit your organization, along with standard language a donor could use in their Will. Additionally, you should have a knowledgeable person on staff 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, such as CGAs and CRTs, program may make sense. The first step to determine if this may be appropriate for you is to take an honest look at your leadership, donor and prospect pool. Several questions to ask include:

  • How supportive is your senior management and board of the idea?
  • 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 mostly relying on established donors?
    • What proportion of your donor base is comprised of men versus women?
    • In what states do the majority of your donors reside?
  • What are the characteristics of your gifts?
    • Annual versus major?
    • Repeat (loyal) donors?
    • Size of gifts?

While important for any type of gift received, the complexities of a life income gift program highlight the need for a strong gift acceptance policy. A well-crafted gift acceptance policy can help organizations avoid regret after accepting a particular gift. Creating a gift acceptance policy should be a collaborative process that incorporates feedback from all stakeholders—development staff, finance staff, senior leadership and the board.

We believe it is important to create a gift acceptance policy that makes sense for your organization’s specific 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, CGAs, CRTs and charitable lead trusts
  • Specific to life income gifts:
    • Types of life income gifts to offer
    • Minimum and maximum ages for gift and when payouts should begin
    • Maximum rates to be paid
    • Minimum and maximum time periods for term gifts
  • Committee/staff needed to review the gift if it is not within policy

A written gift acceptance policy will help your organization create a more consistent experience for donors while confirming that gifts are only accepted if they further your mission. Additionally, it can serve as a guideline for interested donors.

Senior leadership and board support are paramount for any fundraising plan, in our view, but this is especially true for a life income gift program. A life income program involves greater and longer-term involvement from an organization relative to 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, sophisticated shops have professionals that come from the legal and accounting backgrounds. However, we have seen more relationship building with development staff who not only understand the basics of these gifts but, more importantly, can build relationships with donors to not only truly understand what makes them passionate about the organization, but also to merge your needs with the donor’s objectives. For more complex technical details, these relationship managers/gift officers can turn to other professionals, either internally or externally.

Along the staffing spectrum, organizations can consider a variety of structures. 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, another popular option we have seen is to combine annual and planned giving responsibilities. In many ways, this can make more sense than combining planned giving with major gifts. Studies have shown that great planned giving prospects have tended to be those who have been loyal annual donors, even if those gifts have been modest on an annual basis.

Lastly, it is important to note that consistent resources are 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 are available for this type of giving. In our experience, many planned giving officers meet with donors who have collected materials for years before they agree to a planned gift.

3. Execute the program

As you begin to execute your plan to build a planned giving program, we recommend revisiting 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 donor 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 assumes additional considerations, including financial liability and state regulations for CGAs; and for CRTs, trust intricacies and oversight, including tax.

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 donors and their advisors to benefit the organization, while fitting in with the donor’s estate planning.

These three 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, helps in stewardship efforts and keeps you top of mind.

Should you outsource or run in-house?

In choosing how to execute your life income planned giving program strategy, there are multiple choices. This decision, like all others regarding a life income gift program, hinges on what makes most sense for your organization, mission and resources. To bring in a gift, there are many companies and consultancies available to assist with the process. These organizations can assess your mission and donor database to help determine if a life income program makes sense, and then they can help identify best prospects for the variety of instruments.

There are also professionals who can develop and execute your entire marketing plan from timing and materials, to building an interactive website. Finally, if it is determined that resources are better served elsewhere, consultants exist to act in effect as “planned giving officers for hire,” serving as the face of your organization to your donors in these discussions. 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 planned giving 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 investment management, there are firms that offer professional solutions prepared with your specific program and organizational characteristics in mind.

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

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

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