Simple: Bequests

I ended my last blog post on a cliff-hanger, saying that I would reveal what the 99% of the nonprofits without a designated planned giving officer can do to bring in planned gifts.

My first answer is to focus on bequests. My second answer is to focus on bequests. And my third answer is – stay tuned for my next post about the more sophisticated mechanisms.

To those of you who have come to expect at least a thread of originality to my comments here, you may be disappointed. It’s a fairly standard thing to say that the most important aspect of planned giving is to focus on bequests. But it’s advice worth repeating – and I’ll explain why.

First, 80 to 85% of all planned gifts come in the form of bequests, where a person dies and leaves your organization either a certain dollar amount, or a certain percentage of the estate, or the residual of the estate after other bequests have been completed. So for all the focus in the field on more complex gift plans, here’s the bottom line: four out of five dollars left to nonprofits come from simple bequests.

Second, bequests are, well, simple, for you and for the donor alike. The donor simply includes you in the will, or adds a codicil to an existing will. Meanwhile the nonprofit can market bequests without creating much complication (more on that below).

Third, despite the income tax and cash flow advantages provided by the more complicated charitable gift instruments such as charitable gift annuities and charitable remainder trusts, most donors gravitate toward bequests. The reason for this was described by Robert L. Sharpe, Sr., in a book called Planned Giving Simplified. (I reviewed the book for Foundation News and Commentary back in 2000.)

Sharpe points out the different priorities of the nonprofit and the donor.

Nonprofit’s Preference                                          Donor’s Preference

1. Outright gift now                                              1. Bequest

2. Irrevocable gift now, benefit later            2. Irrevocable gift now, benefit later

3. Bequest                                                                3. Outright gift now

The nonprofit likes the bequest least, because the donor can cancel it, redirect it elsewhere, or, well, run out of money before the bequest is made. The donor likes the bequest best precisely because it can be changed at any point (or the money used for lifetime needs).

So from a donor’s standpoint, a bequest is easy and reassuring. The donor gives up control and access to the money at the moment when even the most cautious individuals know that they won’t need it any longer: when they’re dead. Donors can change the beneficiary or remove the bequest completely if they need the money. Moreover, it gives the donors complete anonymity if that’s what they seek. (A lot of donors don’t want to be known in their lifetime. They worry that they’ll be hounded.)

So bequests are attractive to donors. That makes it likely that a bequest is something they’ll consider. So how can a nonprofit (part of the 99% without planned giving officers) promote bequests to their organizations? Plenty of ways.

  • Put sample bequest language on your website. Prominently. Not only does that make it easy for donors to create a bequest for you (and, for the shy ones, to do so without telling you), but it positions you in the public mind as the sort of place that indeed seeks and accepts and needs bequests.
  • Put examples in your literature of people who have left you bequests – and describe what led them to do that and the impact on your mission. (Keep in mind that to a large extent you’re selling immortality. So give an example of someone remembered through their gift.)
  • If you haven’t yet received a bequest, ask a board member to write you into his or her will – and write about that person in your literature and website.
  • Create a legacy society for everyone who has made a planned gift commitment – complete with special logo pins for people to wear and annual gatherings and listings in your annual report. (You want people to feel as though they belong to a special group. And they do!)
  • Let people know that they can leave funds that can be used in a variety of ways. Donors might not be interested in either traditional endowments or outright operating gifts. (You may want to review my post on creative approaches to bequests.) But do suggest that they run the wording of their bequest by you: They may try to control from the grave and impose impractical restrictions. (And if the donors want to retain their anonymity, they can share these ideas with you through their attorneys.)
  • Ask on your gift envelopes and on-line donation pages if the donor wants information about creating a bequest. (And have something ready to send them if they say yes.)
  • Never stop talking about bequests.

And the other ways you can attract planned gifts? Stay tuned! Next post! (Or, maybe, the one after. Who knows what else might come up?)

Copyright Alan Cantor 2012. All Rights Reserved.

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6 thoughts on “Simple: Bequests”

  1. Hi Al–Very interesting! I am just thinking about the legacy society idea. Could it seem maudlin to wear a pin, and go to a party with others wearing the same pin, that is essentially saying, “This organization wants me dead”? Hey, me too! Great party! Sorry, I don’t mean to sound cynical, but I am just a little stuck on the “death” part of bequests. I bet the immortality dimension is the way to brighten this up–any thoughts?

    1. Thanks, Becky.

      Not to get too philosophical, but a lot depends on a person’s view of death and acceptance of mortality. There are some folks who simply never talk about death, who deny it. Others (a growing number, in by my unscientific observation, or perhaps I’m simply getting older) are rather matter-of-fact about it. Their major concern is not the inevitability of death, but the possibility of mental and physical impairment as they age. Death itself is a lesser concern.

      But a legacy society should, as you say, be about leaving something for a cause you care deeply about, and making a difference upon your death as you have in your lifetime. Actually, it can be comforting and rewarding, not morbid. And I think it helps if you come up with a name for the legacy society other than “legacy society.” The word legacy does resonate a bit with overtones of insurance salesmen and funeral homes. But if you name the group after a wonderful and vibrant man or woman whom everyone loved and who left some money to the organization, that works better, I think.

    2. Becky, I think if you concentrate on what impact the donor can have on your organization rather than death, you will be amazed at how many people will engage in the idea or conversation of a bequest. Often times you will find that once a planned gift is made, the donor will envolve and increase their annual gifts. Again, this is usually only possible if you center on the impact that donor can have on the future of your organization. At that point, the society is made up of people excited to be part of a group making a difference well into the future rather than “should we be on the lookout for snipers tonight”. 🙂

  2. Al – terrific advice as usual. Keep working to take the fear out of Planned Giving. Most nonprofits can implement a bequest program in a very straightforward way…..just by looking around at what the really big national nonprofits put on their websites for inspiration and langugage.

  3. Thanks! Just working on trying to get this going for Voices Against Violence, and this is such clear advice for those of us English professors who feel a little out of our elements trying to work on programs like this. Very helpful!

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