Planned Giving Basics

Diane Thornton, CFP®Senior Director of Gift PlanningUniversity of St. Thomas

PGCH 25th Anniversary ConferenceApril 25, 2013

The Family….

Starting the Ascent

What is Planned Giving? Gift Planning?

• Definition: a planned gift is any major gift, made in a lifetime or at death as part of a donor’s overall financial and/or estate planning.

• By contrast, gifts to the annual fund or for membership dues are made from a donor’s discretionary income, and while they may be budgeted for, they are not planned.

Overview and Impact

• Who—are Target benefactors?• What—Impact do Planned Gifts have?• Where—Does it fit in a capital campaign or

fundraising goals?• When—Do I have time to do it?• Why—Are benefactors interested?• How—Can I be successful if I am not well versed

in financial and legal expertise?

Steady Climb—The Legacy Society

WHO to Target?Individuals with10+ years of giving to your organization.Benefactors who want to maximize their gift plan.Individuals between age 40-49; highest % of new wills (28%). 50% of individuals with no offspring have charitable plans.9% of individuals with grandchildren have charitable estate provisions.

Donors of all ages.

What is the Impact?

Capital Campaign Gifts generally 10 - 20 times the largest gift a donor has ever given.Planned Gifts can be 200 times the largest gift ever given by an individual.The national average for bequests is $78,000.Known bequests are about 20% of what is committed to a charity. 4 out of 5 are unknown.Blended Gifts can help stretch the Ask.

Where is The Mountain of Giving ?

When to Start…..Now

Center for Philanthropy “Million Dollar List” study

Million Dollar List Data

Center for Philanthropy “Million Dollar List” study

Capital Campaign Success and the Planned Gift

Rule of Thumb:Approximately 20% of Capital Campaign fundraising comes from Planned Giving.

The 10/40/40/10 Rule:10% of expectancies—within 5 yrs.40% of expectancies: 5-10 yrs.40% of expectancies: 10-15 yrs.10% of expectancies: more than 15 yrs.

The Daily Grind:Disciplined Development

What gets measured, gets done.

• Start with a Legacy Society• Goal: Count the number of

commitments; new legacy members• Count Donor Visits and Donor Calls• 20 minute Mondays• Planned Giving will never be urgent.

Warning!

Insure Program Success

Don’t give Planned Giving an annual Financial $ Goal for Fundraising.Don’t look for instant results. PG programs take about 7 years to show impact.Don’t forget that Bequests are 80% of Planned Gifts. Keep it simple.

WHY?Discovering the Joy in Planned Giving• Helping People Crystalize Plans• Lack of Cash Fact: 5%/95%• Privilege of knowing their story• Recognition and Stewardship• Directing the Gift—Important

conversations and documentation• Planned Giving is a valued career

skillset few take time to learn.• Report Results—Track and measure.

How? Focus on Bequests

Learning the Language:Testamentary—given, bequeathed, done, or appointed by will. Beneficiary—the person named to receive

proceeds or benefits (occurring at death)

Death is not an “If you die…” it’s “WHEN you die”97% of Bequest provisions will remain. Most individuals do not remove charities after they put them in their will.

Average Value of a MDL Gift

Gifts Made by the Million Dollar List

Giving USA 2012

Individuals and families account for 88% of total giving when gifts and bequests combined.Religion 32%; Education 13%; International 8%Environmental and Animal orgs giving is upArts giving is up81 ultra wealthy individuals signed the Giving Pledge--$200 billion expected to transfer in the future.

Philanthropy in the Future

Greatest Generation• Born 1910-1925 (Age 88+)• Wealthiest batch of seniors in

U.S. history; control > 60% of invested assets in America.

• Post depression influence and frugality.

• Those over age 65 today have 40% likelihood in a nursing home and 75% likelihood of home health care expenses.

• Bequests to charity with few strings attached

Baby Boomers• Born 1945-1964 (Age 49-68)• Big spenders• Longer life expectancies.• Unlikely to see significant

inheritance from their parents.• Concerned about outliving their

retirement assets.• Interested in gifts that provide

income, or gifts at death.• Strong interest in greater

control of the gift once they are gone.

Planned Giving Basics

Incorporate your new ideas into your plan

• Who, What, Where, When, Why & How• Build Relationships and Listen to their

Story• Visits: 25% Talk; 75% Listen• Success Statistics: 75% Effectiveness in

Person; 25% Effectiveness in Marketing• Asking is Essential

Don’t Reinvent the Wheel

The Complete Guide to Planned Giving by Debra Ashton

Planned Giving Today publicationRobert F. Sharpe’s free newsletter “Give & Take”www.KathrynMireeandassociates.com “The Resource Library” tab (Gift Acceptance)www.plannedgiving.com website has the Planned Giving Cheat SheetUST Interactive web page using Crescendo http://stthom.giftlegacy.com

Watch

http://www.youtube.com/watch?v=fYTJ9v2vsaESlide 10

Resources for this Presentation

The Indiana University, Center for Philanthropy “Million Dollar List” study on $1,000,000 plus donors. PPP website www.pppnet.org Resource Centerwww.plannedgiving.comGiving USA 2012 studywww.demographics.com

Get Started…You can’t reach the summit until you’ve left the camp.Mountain climbing is hard. It’s supposed to be hard, and it will take time.Others have climbed this same mountain.If possible, climb with a friend.Embrace the Mountain. Enjoy.The summit is worth the climb.

Age Old Advice from Ben

In the first place, I advise you to apply to all those who you know will give something; next to those of whom you are uncertain whether they will give anything or not, and show them the list of those who have given; and lastly, do not neglect those who you are sure will give nothing; for in some of them you may be mistaken.

- Benjamin Franklin