charitable bequests

Food For Thought From Giving USA 2015

Wealthier Americans Leave Charitable BequestsAnyone who has been in or around planned giving for some time knows that most charitable bequests come from typical direct mail-type donors – $50 a year for many years – maybe your secret millionaires next door but certainly not your “leadership” donors.

But, take a look at Giving USA 2015.  The general rate of charitable estates in America is still about 5% of all decedents. Now, take a look again at our chart above.  Notice that the actual rate of inclusion of charitable bequests climbs from 15.7% for estates under $5 million all the way up to over 50% for mega wealthy Americans (over $50 million estates).

In other words, take a look around at your next board meeting. Ask yourself: How many individuals around the table fall into these potential estate levels?  Then, ask yourself: How many of these board members have we had any discussion about their legacy with our institution?

If your board has individuals with these wealth levels, easily 1/3 or more of them will include some charitable gift in their estates.  Will it be yours?

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:

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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):

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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!

New Planned Giving Insights

If you have a free hour, check out this link to a fascinating web presentation from Dr. Russell James (sponsored by about some really cool, new Planned Giving data: WHAT THE DECINE OF WILLS AND ESTATE PLANS MEANS FOR PLANNED GIFT MARKETING Presented by Dr. Russell James J.D., Ph. D, CFP

Presented by Dr. Russell James J.D., Ph. D, CFP

I actually plan on watching the webinar over again, taking better notes and reporting back on each of the major findings.

Here is a teaser of some of the points I gleaned from my not-so-clear notes:

  • The top trigger for people to add a nonprofit to their estate plans (will, trust or account beneficiary designation) was experiencing any apprehension of death (i.e. facing one’s own mortality).  Cancer and other major health declines also made the top 10.  Family structure change (death of spouse, divorce, etc…) was next.  Not that surprising but read the next point…
  • The top triggers for people to remove a nonprofit from their estate plans were essentially the same as the triggers to add a nonprofit!  In other words, anything that motivates a change of one’s estate plans could be good or not good for a nonprofit (now you understand why we emphasize stewardship!).
  • Most charitable plans are added within 5 years of death!  Wow.  If that is true, not only is it a case for stewardship but it’s a huge case for traditional PG marketing (i.e. newsletters!).
  • Planned giving is currently experiencing the Baby Bust!  As Robert Sharpe has warned for the last 20 years or more, there was a serious drop in births in the late 1920s and 1930s.  And, any positive impact by the Baby Boomers on planned giving is 5 years away!  Meaning, planned giving programs need to gear up for the impact of the Baby Boomers.

That webinar was so full of cool stuff, I plan on releasing and analysing the data points over the next few months!

If you have enjoyed reading this blog and would like to add a positive testimonial (sorry, negative stuff won’t go up), check out my new tab for testimonials under the Clients tab and please comment away!

Results in from bequest counting poll!

Thank you to the 30 or so people who took our informal poll on the counting of bequests!!

Now, you might say that 30 people is not much of a poll statistically.  True.  But, the results are useful in that they reflect the ranges of practices out there and options to consider.  And, I believe the results are actually a nice representation of the whole picture.

Here are the results, with my comments to follow each slide:

blog question 1

I am actually surprised at this result. I just assumed everyone, or almost everyone, includes realized  bequests in their annual fundraising totals.  Maybe the question was confusing as I should have asked “whether your org includes realized bequests in  your annual fundraising totals?”

Blog question 2

I would like to see this at 100% YES but at least this tells us that not every organization will use the so-called “irrevocable bequest” to pad their campaign numbers.  Bottom line: campaigns need the flexibility to include irrevocable bequest intents as long as reasonable age guidelines are used (i.e. over age 65 or 70 or older!) and this is not overly relied upon (will land your org into not welcomed litigation).

Blog question 3

OK, nobody went over 50% of their campaign with irrevocable bequests – not surprising.  But, most being less than 5% of their campaigns shows that irrevocable bequests are not overly popular.

Blog question 4

Who counts “revocable” bequests intents in their campaigns?!  Well, some do but it is certainly not the norm.  I am surprised that so many of the voters said they did – 8 out of 25 voters on this particular question.  That is 8 more than I expected but I am guessing that institutions are using their campaigns as springboards for their planned giving programs. In that case, I think it is a great idea to give some recognition in your campaigns for these revocable “gifts”.

Blog question 5

I had assumed that most charitable bequests are overwhelmingly unrestricted.  Either I am wrong or the respondents are not so representative of experiences I’ve seen.

Blog question 6

Lastly, I like the answers to this question – meaning the policies run the gamut.  And, that is fine because this is purely a policy question!  Your organization’s choice and even when your board decides to put unrestricted bequests into endowment, the funds are not permanently restricted and can be realized by board at any time!

Thank you to all who participated in this informal poll!  Please share this post with others – we are on a membership drive to push our subscribers over a 1,000 and reach 100,000 visitors to the blog.