Giving USA 2012

Finally, a Definition for Planned Giving

One of the biggest challenges in being a planned giving professional is clearly defining what it is!  (especially with a name that is not descriptive to anyone not familiar with the field).

Planned giving in the past was often called “deferred giving,” implying that we are talking about gifts in which the funds reach the charity after some deferral of time.  The problem with that name/definition is that many “planned gifts” are not deferred in that sense.  And, even when the funds reach the charity after some time or the death of the donor, the donor is typically making the “commitment” right now!  For the donor, this is not a deferred gift  – it is an immediate commitment no matter how long it may take to reach the charity (if it ever does)!

What about “gift planning” as a name/definition?  Well, it is descriptive of what planned giving officers do.  We help plan gifts in different ways, yes.  But, it doesn’t hit at the heart of planned giving which usually involves one’s estate as well as possibilities of income during life or an “out of the box” tax incentive.

And, when I tell people about my firm and what I do, I might say that planned giving is any giving beyond cash, check or marketable securities.  Now, that defines what planned giving isn’t and by way of inference, you could infer what it includes.  But, does it really do it?

In fact, none of the above attempts to define this field of planned giving do justice to what it is and what it means – not just in terms of cash flow to charities but to the donors!

After almost twenty years of working in philanthropy and planned giving, I have finally come across a definition that encapsulates possibly the best definition of the field.  Buried deep in Giving USA 2012’s chapter on Giving by Bequest, I found the following idea attributed Adrian Sargent and Jen Shang (both from Indiana University).  In discussing motivations for bequest giving in their research findings, they said that “the motivation (for a charitable bequest) also includes the belief that the values of an institution align with the donor’s own values and that these values should be preserved for the future.”    

When I read this, it hit me that I finally found a definition for the planned giving field that really “hits it on the nail” (a term taken from my Talmud teacher).

So, for me, the definition of planned giving is when the values of an institution align with a donor’s own values to the extent that it becomes the donor’s belief that these values should be preserved for the future.

Think about it, fundraisers.  Fundraising is about aligning donors’ values to the values of your institution for today’s needs.   And, planned giving is about your strongest supporters aligning so much with your institution’s values that they firmly believe that those values should be preserved for the future.  Once your donor reaches this point, it is just a matter of choice between which option – bequest, life income plan, or large immediate gift or whatever.

This is why I always tell new planned giving programs to start with your consistent donors and leadership – those who have already shown through their giving or involvement (or both) that the values of the institution align with theirs.  Once you have a subset of a donors whose values are likely closely aligned to your organization’s values, the question then becomes whether the donors feel that these values should be preserved.  And, of course, how do we (the fundraisers) successfully ask donors to address the preservation of this institution’s value with their own legacies.  Another blog post on that question…

Interesting Bequest Data from Giving USA 2012

Yes, bequests were up again in 2011 according to Giving USA 2012 – reaching $24.41 billion (up 12.2% from 2010).  Nothing surprising there.

As I spend the next few weeks scouring the report/data and updating our presentations, I am sure that I will be reporting on some interesting tidbits.

Here is the first one.  Take a look at this chart – it should be self-explanatory:

Percentage of Group Leaving Charitable Bequests





Those who give $500 a year or more in philanthropy


Moderately wealthy – passing away with $3.5 million to $10 million


Pretty wealthy – passing away with $10 million to $20 million


Very wealthy – passing away with over $20 million in assets

The 5% figure is from several general sources; the 10% figure is from Professor Russell James’ research, and the other percentages are from the IRS (as reported in Giving USA 2012).

Even though common planned giving wisdom suggests that nonprofits need to focus on their entire giving database (not just those suspected of being wealthy), it is very interesting to note that the odds of receiving a charitable bequest clearly go up as your prospects scale the wealth spectrum.

Of course, did I fail to mention that Giving USA reports that half of the $24.41 billion in charitable bequests in 2011 went to Private Foundations?  That’s the challenge with the wealthier crowd.