Estate Pledges Archives

Lessons from Three Legends

Holidays give me time to ponder.  I’m sure some of the Hartsook staff wish I wouldn’t think so much because I have a reputation of making more work for everyone.  But this Thanksgiving, I didn’t think of more we needed to do to grow philanthropy.  Instead, I was in a very reflective frame of mind.  I thought of three who are not merely making a difference in growing philanthropy, but who have reached “legend” status.

You know Hartsook Institutes gives the Growing Philanthropy Award to individuals and institutions that demonstrate fundraising success through innovation and creativity.  You have read their names, you have seen the announcements, and some of you have even been present when we gave the awards.

Just for a moment, I invite you to look at the back story of three of the legends who received the awards with lessons that can help us emulate them and grow philanthropy.

Most recently, Roger Lowe, retired Senior Vice President of Wichita State University, received the award.  Some of you may have thought, “CFO’s are usually pains in the neck to fundraisers, dismissing estate designations, discounting pledge values, and wanting only unrestricted money and money they can ‘book.’”  Right?

Well, Roger is different.  He does not impede the fundraiser; rather, he tries to remove obstacles so money can be raised.  Imagine!  Let’s say you have a restricted gift to do a project, but not quite enough.  Roger searches for ways to legitimately use other funds to help reach the goal.  Or what if your CEO wants you to raise money for a project that isn’t very flashy. Roger jumps in, looking at alternatives.  To him, where the money comes from isn’t as important as getting the project done. Roger is a rare breed of CFO.  He is a rare problem solver and a good fundraisers greatest ally.

Next, Harvesters, Kansas City’s Food Bank’s Karen Haren and Joanna Sebelien took an idea of creating broadly restricted targets – Initiatives – of Child Hunger, Family Feeding, Nutrition, and Senior Feeding to present their case.  Instead of whining about hunger, they demonstrated how they were going to solve a problem.  It was not a public relations stunt when they brought their CFO (another good CFO model) to the same table and worked on an Initiative Budget for the entire organization.  They presented the cost of each program from a comprehensive point of view.

As a result, they have grown annual fundraising from $2 million a year to $14 million in six years.  Their own national organization gave them an award for this, then didn’t follow their example.  While they’re having a big year in fundraising, they are laying off people because they didn’t do the budget relieving part of the strategy.   They didn’t understand that it’s not a gimmick.  It’s real, dedicated organizational change.

Finally, our own Chair in Fundraising, at Indiana University, and his colleague, Jen Shang gave us the research on bequest pledging.  Among the findings is a simple, transformative idea that everyone can make a bequest just as they can an annual fund gift.  This 2008 research is slowing catching on.  We have three bequest pledging organizations in which the numbers are fantastic all over.  In less than 10 months, Tulsa Boys Home asked each of their 44 board members to give through a bequest.  Only one turned them down and they have nearly $5 million committed in six months.

As a national organization, The Heritage Foundation has the challenge of communicating with their donors through direct response and then following up.  Asking for bequests, they have closed 221 bequests this year valued at over $20 million, almost three times the average of previous years.

Finally, the Humane Society of Greater Kansas City is in a campaign but has discovered the inclination of their membership to give has raised $5 million in bequests just from their Board of twelve.  In the Sargeant/Shang research you’ll learn that an agency is 17 times more likely to get an estate gift if they ask.

At Wichita State University, thirty million dollars was raised from 276 donors as a result of the Bequest Giving Strategy; over $75 million in fundraising growth because an organization was thinking from the donor’s point of view and established a partnership with the CFO instead of focusing on the competition.  This innovation changed the direction of a university.

Some may dismiss this as just another series of random stories and situations.  No, each of these was as a result of a strategy to grow philanthropy in America and in the world.

What is different here is that we observed, watched and recognized with the Growing Philanthropy Award, that each model of behavior can change fundraising in the world.

This past holiday, that’s what I thought about.  It was a great a Thanksgiving.

Yes, No or Maybe . . . What an Idea!

After all the “Leave a Legacy” promotion in the past 20 years—the focus on planned gifts, and research on who gives them—the needle on realized gifts has barely budged. Perhaps it’s too early to judge this, but many of you know I have long been a critic of the planned giving profession’s focus on “gizmos” rather than simple bequest solicitations.  The Hartsook Chair, Adrian Sargeant agrees and published a long and exhaustive look at bequest giving in late 2008.

Bequest giving isn’t just a side order of fries.  Think about this: if we could move the realized bequest number to 8% or 9% of total philanthropy, we would add $6-$10 billion more.  And you know I am all about growing this number.

I titled this entry “Yes, No or Maybe.”  I will get off my high horse and back to the street.  Recently a client Vice President for Development, Robin Rowland of the Humane Society of Greater Kansas City, shared with me a survey she did of her 600 most loyal donors last January.

By the way for those who are reading this and believe that Nobody is giving money away, this organization increased their annual support from $300,000 in four years ago to one million this past year.  But I digress . . .

In the survey Robin developed that asked about opinions on animal welfare, their relationship to the agency, some demographics about marriage and child status, was a question that asked “Have you included the HSGKC in your estate plan or would you be interested? “  Respondents had three choices: “Yes,” “No,” or “Maybe.”  The returned surveys revealed that some already had designated an estate gift.

But interestingly enough out of the 200 who responded, 60 said “Maybe.”

Maybe?

Yes, “maybe” they would.  Let me tell you that again, out of 200 responses, 60 said that maybe they would include HSGKC in their estate plan.  We aren’t talking about an organization with a million donors or even 20,000.  We aren’t talking about an organization that has had an effective fundraising program for decades.

So the answer is, “perhaps.”  “I would consider it.”  “Maybe.”  Now the Humane Society just needs enough time to follow up.

Of course, you know every story always has to come back to me.  You knew I would manage to make that happen.

In the late 70’s with no data base other than punch cards, I sent out a survey similar to Robin’s to Washburn University’s 300 oldest alumni.  I asked similar questions relevant to a University.  Of the 300, one hundred replied and 30 or so of those said they had included Washburn in an estate plan.  I was a one man fundraising shop, so for an hour a day, I would pick up those 30 cards from the corner of my desk and call each of them to thank them and ask if they would value it.  Before the year was over, we had virtually all the 30 thanked, valued and verified.  Millions of dollars have flowed in as a result of that exercise.  One Vice President of Washburn even called me once to thank me for doing this.

I wonder what would have happened if I had left an option for them to say, “Maybe.”  How much money did I leave on the table for Washburn?  Sorry, Washburn, I was young and inexperienced.

Hartsook is applying Sargeant’s bequest research with five institutions that have agreed to serve as beta sites for testing his assertions.  In his new text, Fundraising Principles and Practices, you will find there are two separate chapters for what has traditionally been lumped together: one for Planned Giving; another for Bequest Giving.

The tide is changing.  “Maybe” you should think about all the money that’s being left on the table.

For the past several weeks I have been taking in Adrian Sargeant and Jen Shang’s Associated Fundraising Professionals’ research on bequest giving.  If you have not seen this research, you must read it (you can find this study at www.legacyleaders.com).  I think it is a road map to many changes in how we handle what we have traditionally called planned giving. 

Consider that 95% of all estate gifts come from simple bequests.  Over the years it has been my experience that major gift fundraisers and others in the fundraising profession have been intimidated out of asking for “planned gifts” because they didn’t know how to do it.  Yet the reality is, despite all our efforts over the decades to train and educate fundraisers about all the vehicles related to planned giving—we have scared them away from inquiring about estate plans and the impact the gift can have.  While Sargeant and Shang don’t come right out and say it, it appears that “planned giving” needs to be identified as the instruments of giving beyond the bequest.   Given this information, what we need to do is train our staffs on the simple means by which one asks for bequest gifts.  Given what we know now, we must resist the urge to believe this is too simple to be true and acknowledge the facts.

Adrian and Jen have coined the phrase “bequest pledger” rather than “planned giver.”  It is closer to reality, though I would change that to “estate pledger.”  Financial planners, while providing a valued service to their client, don’t understand the philanthropic aspect of the plan.  So they approach the gift as a tax-only transaction.  And we all know this is not the top reason—or even one of the top five reasons—a person makes a major gift.

Here is what we are suggesting our clients consider based on this research.

1. Train all fundraisers in the asking and closing of an estate gift (most frequently a bequest).  Use your planned gift staff, if you have any, for the more complicated estate planning vehicles.

2. Remember that the fundraiser and/or the staff is among the most influential in asking for and closing a major gift—including estate gifts.

3. Start using the term “Estate Pledger” rather than “Planned Gift Donor” when the gift occurs in the bequest.  I have heard Fundraisers of the Year not understand the difference between a planned gift and endowment, let alone an estate commitment.  Keep it simple, in language a fifth grader can understand, so we don’t muddy the issue further.

4. Know that as prospects leave their employment and move into retirement, it is more difficult to get an estate pledge.  The average age of estate pledging is 49 years of age and once a nonprofit is in the estate plans, it is seldom removed.

5. Ask directly for an estate pledge.  This can result in an increased number of estate pledges by 17 times.  Thanking estate pledgers regularly and often can result in the donor not thinking that the pledge can be removed.

6. Look at your materials and see if there is a bias against simple bequests and a focus on strategies that result in less than 3% of all estate gifts.  Also look to see if there is a bias toward a particular socioeconomic group.  Anyone can make a bequest.

7. By a large margin, bequest pledgers want to know what their money is going to do after they die. By almost three times, the donor is more interested in its use than it its tax opportunities, estate planning or memorials.

8. Finally, listen.  Donors want to discuss their relationship to the agency.  This is critical.  Too many fundraisiers do all the talking and don’t listen. 

Again, I encourage you to look into this research.  Only 5% of donors give money to a charity at death.  Are you getting your 5%?

  
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