The 5 Myths for Starting a Gift Planning Program

Many nonprofit organizations – both large and small – are often hesitant to begin or expand their charitable gift planning operations.  In working with a number of these organizations, many of their concerns are unfounded.  So I decided to rebuke some of the more common concerns that many nonprofit leaders have when considering their own planned giving programs.  Enjoy, and let me know what you think!

MYTH #1:  I first need to become a technical expert in legal and tax issues

Contrary to conventional planned giving wisdom, people don’t give to charity based on taxes.  While taxes can drive how a gift is structured, the timing of a gift, or the eventual amount of a gift, there is nothing in the tax code that directs individuals to donate to your organization!  Unfortunately, the image of a planned giving program is one of sophisticated trusts, complicated tax laws, and legal issues.  In reality, it’s about attracting gifts of accumulated wealth to support your organization’s mission.  Since most planned gifts are made through simple beneficiary arrangements in wills or trusts, you don’t have to be an expert estate planner to become effective. 

MYTH #2:  I have to concentrate all my energies on raising current resources.

There is never a good time to save for retirement, either!  In a tight economy the need for current dollars is greater than in the past.  However, donors rarely want to hear your every day problems.  They are attracted to your plans, your vision, and what your organization will be like twenty years from now.  More important, they want to be assured that their gift today is helping to build an organization that is financially sustainable over the long term.  More than ever before this means creating the structures and policies around an endowment fund, and then strategically communicating with your donors about how their current giving supports the work of the present, and their future or estate giving through your endowment can support your work in the future.

MYTH #3:  My organization isn’t ready to start a planned giving program

It is irrelevant whether your organization is ready or not.  The only thing that matters is whether your donors are ready.  And the answer to that is a resounding “Yes”!  The population continues to age, and wealth continues to accumulate.  In the next 50 years, estimates show that 40% to 50% of all charitable gifts will come from individuals’ bequests.  If you don’t think your organization is ready, well, you might want to get ready.

MYTH #4:  If people want to remember my organization through their estate plan, they’ll just  do it on their own.

That’s technically correct, although I suspect that hoping for planned gifts likely will not be as an effective strategy as actually doing something about it.  That is why building relationships with financial professionals in your area is vitally important.  Accountants, estate planning attorneys, financial advisors, bankers, life insurance professionals, and your local community foundation work with individuals every day to help design and implement their estate planning strategies.  Building a network of these key people to understand how your organization can help their clients accomplish their philanthropic goals is one of the most strategic moves you can make to start your planned giving efforts.

MYTH #5:  We don’t have any money to invest in long range plans.

Sometimes the simplest strategies can be the best.  Ineffective planned giving strategies operate separately from existing marketing and fund development activities.  Rather than starting something new, consider marketing your endowment fund and other planned giving strategies through existing avenues.  This way, you’re not adding additional costs to your marketing budget through fancy brochures and newsletters.  You’re simply incorporating new techniques for your donors to consider as they give to your organization.

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