To Ask or Not? (for documentation)…

donr-is-kingOne of the most basic questions for any fledgling planned giving program is whether you should ask legacy donors for documentation of their commitments.  Not so simple.

Most of these commitments are revocable bequests in wills or account beneficiary designations.  Why do we (the nonprofits) want the documentation especially if they doesn’t bind our supporters to follow through with their commitments?  Easy – we want to make sure the commitment is more than just a promise to act, that our donor has acted already!  That’s part of our job in planned giving – to do as much as we can to see gifts to fruition, which includes documentation and stewardship.

Sounds easy enough. But, I just sat today with a “model” planned giving donor – someone who has shared his legacy plans with several nonprofits – and he gave me more reservations on this question.  In a moment of total honesty, he said it “irked” him that some of the charities he was leaving significant gifts to aggressively asked for copies of the relevant portions of the instrument he used for the gift. From his perspective, the charities should take his word for it.

And, you know what, I agree with him!  My approach on this issue has always been to get the commitment to the idea upfront verbally or in a non-binding letter of intent and see if you can get documentation in later years (not demand but see if the donor is ok with the request).  People’s estate plans are private matters and the fact that someone is willing to share that a bequest is coming to your charity is plenty. Don’t push your luck.

If  you ask for documentation, make it optional – “just for our files” – and leave it at that if your supporter demurs.

And guess what – those charities are still waiting for documentation from this donor. The offending charities are lucky they weren’t dropped!



Do you have a legacy opener?

When going into a meeting with someone who you want to introduce legacy giving to, do you have a “legacy opener”?

By that, I mean a question that challenges your prospect to discuss their feelings about their legacy with your organization.

In a mere few words, you can set in motion all of the thoughts and feelings that lead to a planned gift.

Sounds easy?

Hey readers – if you have an approach to getting your prospects to open up about how they envision their legacy gifts with your organization, please share!

What ever happened to the Boston College/Havens-Schervish Wealth Transfer predictions?

I probably owe some part of my career in planned giving to the so-called “Wealth Transfer” predictions by John Havens and Paul Schervish in the late 90’s.  They created an incredible amount of publicity with bold predictions of “Trillions” of dollars heading to nonprofits via planned giving/bequests.  Every few years, I like to revisit their predictions and see how close we are 🙂

Here is my updated slide looking at Schervish and Havens’ minimum (I mean minimum!) wealth transfer to nonprofits:

Wealth Transfer Prophecy

Oops.  So they were off target by more than a $Trillion on their first prediction.

All kidding aside, and putting aside their ridiculous predictions (you make big predictions like theirs, you better at least be close), something is still coming.  But, the impact on planned giving (as a result of the aging of the baby boomers) won’t be felt for another 5 years – according to Dr. Russell James in his recent webinar (click here for a free viewing).

Dr. James’ reason for the 5-year period is simple:  that is when the oldest boomers will start reaching age 72 and  up.  In other words, planned giving won’t feel any Wealth Transfer uptic until boomers start passing away in noticeable numbers.

Maybe I need to  come up with realistic predictions for 2018 and beyond! It won’t be the tidal wave that my slide is showing but it will surely be a big jump from these relatively flat bequests years that we are currently in.

What is our takeaway from this dose of reality?  Nonprofits need to put aside the fantasy predictions (and their failure to materialize) and focus on the facts that we need to invest over the next five years in our planned giving programs to be ready for the real wave that is coming.  Not based on faulty predictions  but a reality that people get old and eventually pass away.  There are just more people in the baby boomer generation – so much more that it’s inevitable that the impact will reach nonprofits via planned giving.

Here are two other visuals from Dr. Russell James on the same issue – sorry Professors Schervish and Havens, your predictions look like duds 🙂

The prediction

The reality

Changes Ahead for Planned Giving?

As promised, we are continuing with our follow-up to Dr. Russell James‘ webinar “Wills That Won’t – What the Decline of Wills and Estate Plans Means for Planned Giving Marketing” (click here to see the webinar).  A special thanks to Dr. James, who shared his powerpoint slides with me, and to MarketSmart who hosted the free webinar.

Let’s get right to Dr. James’ headline and feature slide.  Take a close look at this slide and think about it for a few moments:

blog post version updated_104

This chart shows us a pretty steep decline in the rate of age 55+ U.S. population using Wills or Trusts.  What is going on here?  Less estate plans equals less planned giving dollars.  Correct?

Take a look at this second chart that breaks down the “Will Alone” age 55+ group by age segments (Those using Living Trusts actually saw increased usage by the 55+ population over these years but it was a much smaller group):

blog post version updated_112

I am seeing one really big issue for planned giving in the future.

To me, this chart is confirming that Baby Boomers are not as tied to Wills as their predecessors.  That is putting it mildly – easily over 60% of this cohort might not rely on standard wills to distribute their estates.

One other point that Dr. James pointed out in his webinar was the increasing use of “transfer on death” deeds for real estate and other things normally covered by wills.

Put these two facts together – decreasing use of wills and increasing use of transfers on death – and we have massive potential change for the planned giving world upon us within a few years.

When I do my training sessions, I usually reserve one or two slides for “pay on death” gifts.  After seeing Dr. James’ presentation, I am thinking that fundraisers need to be better prepared on these options.  Banks accounts, IRAs, retirement accounts, sometimes real estate, life insurance, and so on – all can be transferred outside of one’s will to heirs/charitable interests.  Planned giving is not just about getting into as many peoples’ wills as possible.

Anyway, as Dr. James mentions in the webinar, there are a bunch of reasons why even getting written into a will doesn’t guarantee an actual gift (actually, earlier research from Dr. James suggested that close to 60% of charitable bequest intending individuals never actually saw the charitable intentions come to fruition).

For me, this raises a lot of questions.  Simple bequests have always been the “bread and butter” of  planned giving.  Yet, we see a trend that counters this history and should make us wonder how to market our programs to account for this trend.

Next up for new posts:

  • The Baby Bust v. the Baby Boom
  • What ever happened to the Boston College/Havens-Schervish Wealth Transfer predictions?
  • Rates of childlessness and/or never married among Boomers – maybe Nonprofits will see an explosion in planned giving dollars after all?

Thank you as always for staying tuned into the Planned Giving Blog!