Legacy Giving: Getting Started
Legacy giving is an investment
It is useful right off the start to realize that a legacy gift is an investment, not a donation and investments are driven by trust and confidence. So, understand you need to take the time to gain a person’s trust and confidence in your organization as a good investment before they are going to feel comfortable making that sort of gift to your organization.
Some people think that offering a legacy giving program is too complicated. It’s not really, but you have to have a certain level of support before it really makes sense to invest too much into the program. A fairly robust donor base, with an established annual fund program is a good start.
The board and staff must be committed to invest the time and resources to develop gift acceptance and investment management policies, as well as systems to market and administer planned gifts. It doesn’t have to be complicated, but there are some process and administration issues that need to be addressed before you embark on this path of what is often described as transformational giving.
How to decide which legacy giving strategies to include
In Canada, we basically have 6 legacy giving vehicles: bequests, insurance, Stocks & Securities, RRSP’s & RIFF’s, gift annuities, and charitable remainder trusts. Deciding which legacy gifts you will accept is imperative and you do not have to offer all of the available options. In my opinion, all organizations should accept and promote bequests. Simply because it is the most recognized and used vehicle available.
Promoting this doesn’t have to be in your face or distasteful either. It can be well placed social media posts simply asking/reminding your constituency to think about your when they are doing or editing a will. For example, “Have you considered a gift in your will to your organization?” which can be paired with a few pictures representing your organizations mission. You might be surprised how effective this can be.
Additionally, you can promote insurance and stocks the same way. Many people get insurance policies in their younger years to safeguard against any tragedies that might occur. When they reach the later stages of their lives, they often don’t need that policy anymore for their family.
With stocks, some of them have matured significantly and the capital gains taxes to cash them out can be very high. Gifting some of them can significantly offset some of the tax burden while helping a favourite charity at the same time.
Feeling overwhelmed already? Don’t be. Industry professionals can be your best friends when it comes to setting up planned gifts.
Align with some industry professionals
In all instances of legacy giving, you and/or your donor will have to work with an allied industry professional at some point. It is just the nature of the vehicles you are dealing with as they involve some binding legal terms and consequences. So, it is in every organization’s best interest to align yourself with a few of these people. Financial planners, estate lawyers, and accountants are the three go-to professionals in this area.
In addition, it will avoid any perceived or real conflicts of interest. Even if you have industry professionals on your executive and in leadership positions, they cannot represent both the institution and act on behalf of one of its donors in dispensing legal or other types of professional services.
Due to the high degree of specialization in the various professions (law, accounting, financial planning) most organizations – big and small – cannot maintain these skills in-house.
I did my master’s thesis on baby boomers and planned giving. One of the most interesting experiences I had during my research was when I completed the industry professional interviews. I interviewed 8 altogether, with a mix of lawyers, financial planners and accountants. They were all very good interviews, but two stood out, and one in particular I’ll never forget.
I met with a lawyer who was well known in the field and the region. When I asked her if she discussed charitable giving in the will with her clients, she said yes, she does, if they bring it up. I continued with the interview and dug a little deeper to find out how she brought the subject of legacy gifts up and which charities she recommended if any to her clients. Then she blatantly stated, “Do you think I’m going to promote your charity’s planned giving program for you?” I was taken back by her candor, but at the same time, I sheepishly answered, “no, I guess not.” But, in fact in industry, that’s exactly what we expect.
There is definitive value in a partnership with an industry professional, but do not to make the assumption they are going to promote your church or charity over another, if at all. It is still the role of the organization to get your donors thinking about leaving your organization a legacy gift.
It is always good practice however, to involve industry professionals in your organization as a volunteer through committee and board memberships, which include a responsibility to help develop the framework for gift planning in terms of policy-making, which also provides you an opportunity to share information about your charity.
Conclusion
Finally, no matter how you approach this and who you involve, it is important to always include a disclaimer on any printed materials and correspondence which you produce in connection with legacy giving that the information being provided is for informational purposes only and encourage the donor to seek independent representation.
The truth is many fundraisers do not feel comfortable talking about legacy gifts, most often because they do not have the confidence in their knowledge on the subject or they feel uncomfortable talking about death with their donors. Either way, there are still opportunities throughout the year that you can make a soft ask to your donors to consider you in their legacy giving. Knowing what to listen for will help you discern when your donor is ready for a legacy gift conversation. The next article in the series will show you how you can identify your best legacy prospects.
Michelle Harder has over 20 years of experience in fundraising and non-profit development both as a consultant and as part of an executive team. With a Master of Arts degree in Philanthropy & Development from Saint Mary’s University in Minnesota, Michelle has both theoretical and practical experience in fundraising. As an author, consultant and public speaker, with a specialty in faith-based fundraising, Michelle is driven by a passion to help organizations large and small like yours achieve their fundraising and strategic goals.
