How to Start a Planned Giving Program

Is your nonprofit looking for a way to secure its long-term financial stability? Did you know that learning how to start a planned giving program could hold the keys to a much brighter future? 

It’s a fact—and it’s one successful nonprofits have been using to their advantage for decades. If you’re ready to go beyond annual giving and unlock a more sustainable future through legacy gifts, read on. In this comprehensive guide, we’ll walk you through the entire process of starting a planned giving program.

From understanding the basics to implementing best practices that favor success (like mastering planned giving conversations), we’ve covered it all. You’ll even learn how to successfully market planned gifts.

Understanding Planned Giving

Before diving into the nitty-gritty of how to start a planned giving program, it’s crucial to understand the subject. What is planned giving? Why is planned giving so important for nonprofits?

Definition and Importance of Planned Giving

Planned giving refers to the process of making a charitable gift during a donor’s life or at death that is part of their financial or estate plan. These gifts are typically larger than regular donations and can provide significant benefits to both the donor and the receiving organization.

The importance of planned giving cannot be overstated. It offers a way for donors to leave a lasting legacy while providing nonprofits with a stable source of future funding. Planned gifts can help organizations weather economic uncertainties, fund long-term projects, and ensure their mission continues for generations to come.

Types of Planned Gifts

There are several types of planned gifts that donors can consider. Understanding these options is crucial when learning how to start a planned giving program.

Bequests

A bequest is simply a term for a gift made through a will. Bequests are the simplest planned gift, and the most common form of planned giving.

A bequest can be:

General—such as a gift of property from an estate’s general assets.

Demonstrative—a gift from a specific source, such as a certain bank account.

Specific—such as cash (e.g. “I leave $20,000 to Nonprofit A”); or a collectible, such as jewelry, art, a vehicle or other property

Residual—a gift made after all other expenses are accounted for and debts, such as taxes and bills, are paid from the estate or a specific account.

Charitable Gift Annuities

A charitable gift annuity is a contract between a donor and a charity. The donor makes a gift to the charity, and the donor or a loved one of their choosing receives fixed payments for life. After the donor’s death, the remaining funds go to the charity.

Charitable Remainder Trusts

Charitable remainder trusts allow donors to transfer assets into a trust that provides income to the donor or other beneficiaries for a specified period. After this period, the remaining assets are distributed to the designated charity.

Charitable Lead Trusts

In a charitable lead trust, a charity receives income for a set period of time. The remaining assets are passed on to the donor’s heirs. This type of gift can provide tax benefits while still allowing assets to be passed down to family members.

Laying the Groundwork for Your Planned Giving Program

We’ve covered the basics—let’s dive into how to start a planned giving program by laying a solid foundation.

Assessing Your Organization’s Readiness

Before launching a planned giving program, it’s essential to evaluate your organization’s readiness. Consider the following factors:

1. Financial stability: Does your organization have a track record of responsible financial management?
2. Donor base: Do you have a loyal donor base with long-term supporters?
3. Resources: Are you prepared to invest time and resources into developing and maintaining a planned giving program?
4. Expertise: Do you have staff members with knowledge of planned giving? If not, are you willing to invest in training or hire specialists?

Securing Leadership Support

Starting a planned giving program requires buy-in from your organization’s leadership. Educate your board of directors and executive team about the benefits of planned giving and how it aligns with your organization’s long-term goals. Their support will be crucial in allocating resources and championing the program.

Developing a Case for Support

Create a compelling case for support that clearly articulates why donors should consider making a planned gift to your organization. This should include:

1. Your organization’s mission and vision
2. The impact of planned gifts on your work
3. How planned gifts can create a lasting legacy for donors
4. Success stories and testimonials from current donors

Creating Your Planned Giving Team

A successful planned giving program requires a dedicated team with the right skills and expertise.

Identifying Key Roles and Responsibilities

When considering how to start a planned giving program, think about the following key roles:

1. Planned Giving Officer: Responsible for managing the program and working directly with donors.
2. Marketing Specialist: Develops and implements marketing strategies for the program.
3. Gift Administration Specialist: Handles the technical aspects of gift processing and documentation.
4. Database Manager: Maintains donor records and tracks planned giving prospects.

Hiring or Training Planned Giving Specialists

Depending on your organization’s size and resources, you may need to hire specialized staff or train existing team members. Consider sending staff to planned giving seminars, workshops, or certification programs to build their expertise.

Collaborating with Legal and Financial Advisors

Planned giving often involves complex legal and financial considerations. Establish relationships with attorneys, accountants, and financial advisors who can provide expert guidance and support your program’s growth.

Designing Your Planned Giving Program

With your team in place, it’s time to design the specifics of your planned giving program.

Setting Goals and Objectives

Establish clear, measurable goals for your planned giving program. These might include:

1. Number of new planned gift commitments per year
2. Total value of planned gift expectations
3. Number of donor meetings or educational events held

Choosing Planned Giving Vehicles to Offer

Decide which types of planned gifts your organization will accept and promote. Start with simpler options like bequests and gradually expand as your program grows.

Establishing Policies and Procedures

Develop comprehensive policies and procedures for your planned giving program, including:

1. Gift acceptance policies
2. Donor recognition guidelines
3. Gift valuation and reporting procedures
4. Ethical standards for working with donors

Marketing Your Planned Giving Program

Effective marketing is crucial to the success of your planned giving program.

Identifying Potential Donors

Analyze your donor database to identify potential planned giving prospects. Look for:

1. Long-term, loyal donors
2. Donors over 55 years old
3. Major gift donors
4. Volunteers and board members

Developing Marketing Materials

Create a range of marketing materials to educate and inspire potential donors, such as:

1. Brochures explaining planned giving options
2. Donor stories and testimonials
3. Legacy society information
4. Website content dedicated to planned giving
5. Direct mail pieces, such as postcards and appeals
6. E-marketing and social media

Implementing a Multi-Channel Marketing Strategy

Use a variety of channels to reach potential planned giving donors:

1. Direct mail campaigns
2. Email newsletters
3. Social media posts
4. Personal visits and phone calls
5. Educational seminars and webinars

Cultivating and Stewarding Planned Giving Donors

Building strong relationships with planned giving donors is essential for long-term success.

Building Relationships with Prospects

Take time to understand your donors’ motivations, interests, and philanthropic goals. Personalize your approach and focus on how planned giving can help them achieve their objectives.

Educating Donors about Planned Giving Options

Provide clear, easy-to-understand information about various planned giving options. Offer individual consultations to help donors explore which options might be best for their situation.

Recognizing and Appreciating Planned Giving Donors

Create a legacy society or other recognition program to honor planned giving donors. Consider:

1. Special events for legacy society members
2. Recognition in annual reports and other publications
3. Personalized thank-you notes and updates on the impact of their future gift

Managing and Administering Planned Gifts

Proper management and administration of planned gifts are crucial for maintaining donor trust and ensuring compliance with legal and ethical standards.

Gift Acceptance Policies

Develop clear gift acceptance policies that outline:

1. Types of gifts your organization will accept
2. Minimum gift amounts for various planned giving vehicles
3. Procedures for reviewing and accepting complex gifts

Record Keeping and Documentation

Maintain accurate and detailed records of all planned gifts, including:

1. Donor information and contact details
2. Gift agreements and supporting documentation
3. Correspondence and meeting notes

Gift Valuation and Reporting

Establish procedures for valuing and reporting planned gifts in accordance with accounting standards and legal requirements. Consider working with a qualified accountant or financial advisor to ensure accuracy.

Measuring and Evaluating Your Planned Giving Program

Regular evaluation is key to the ongoing success of your planned giving program.

Key Performance Indicators (KPIs) for Planned Giving

Track relevant KPIs to measure your program’s success, such as:

1. Number of new planned gift commitments
2. Total value of planned gift expectations
3. Number of donor meetings and educational events held
4. Conversion rate of prospects to donors

Tracking and Reporting Results

Regularly analyze and report on your planned giving program’s performance to stakeholders, including:

1. Board of directors
2. Executive leadership
3. Development committee
4. Donors and supporters

Continuous Improvement Strategies

Use the insights gained from your evaluations to continuously improve your planned giving program. Consider:

1. Adjusting marketing strategies based on response rates
2. Enhancing donor stewardship practices
3. Expanding or refining the types of planned gifts offered

Overcoming Common Challenges in Planned Giving

As you learn how to start a planned giving program, be prepared to address common challenges that may arise.

Addressing Donor Concerns and Objections

Be prepared to address common donor concerns, such as:

1. Fear of running out of money during retirement
2. Concerns about disinheriting family members
3. Uncertainty about the organization’s long-term stability

Provide clear, honest information and be willing to involve

the donor’s family or advisors in the conversation when appropriate.

Navigating Complex Legal and Tax Issues

Planned giving often involves complex legal and tax considerations. Stay informed about relevant laws and regulations, and don’t hesitate to seek expert advice when needed. Encourage donors to consult with their own legal and financial advisors as well.

Balancing Short-Term and Long-Term Fundraising Goals

Planned giving programs require patience, as the financial benefits may not be realized for many years. Balance your planned giving focus with other fundraising efforts to meet immediate needs while building for the future. And don’t pull support from a slow-performing planned giving program in favor of more annual giving. Planned gifts are not only bigger than annual gifts, they inspire more annual gifts.

How to Start a Planned Giving Program: Best Practices and Tips

As you embark on your planned giving journey, keep these best practices in mind:

Start Small and Scale Up

Begin with simpler planned giving options like bequests and gradually expand your program as you gain experience and resources. This approach allows you to build a strong foundation while minimizing risk.

Leverage Technology in Planned Giving

Utilize technology to streamline your planned giving efforts:

1. Implement a robust donor database system
2. Use planned giving calculation software to illustrate gift options
3. Leverage digital marketing tools to reach and engage potential donors

Stay Current with Industry Trends and Regulations

The planned giving landscape is constantly evolving. Stay informed by:

1. Joining professional associations like the National Association of Charitable Gift Planners
2. Attending conferences and webinars
3. Subscribing to industry publications and newsletters

Frequently Asked Questions About Starting a Planned Giving Program

How long does it take to see results from a planned giving program?

Planned giving is a long-term strategy, and it may take several years to see significant financial results. However, you can measure early success through metrics like the number of new commitments and the growth of your legacy society.

What size organization is suitable for starting a planned giving program?

Organizations of all sizes can benefit from planned giving. Even small nonprofits can start with a basic bequest program and expand as they grow.

How much should we budget for starting a planned giving program?

Initial costs can vary widely depending on your organization’s size and approach. Start by allocating resources for staff training, marketing materials, and possibly legal or financial consulting. As your program grows, you may need to invest in dedicated staff and more sophisticated marketing efforts.

Can we start a planned giving program without hiring new staff?

Yes, it’s possible to start a planned giving program with existing staff. Begin by training a current development team member in planned giving basics and gradually expand the program as resources allow.

How do we handle the legal aspects of planned giving?

While it’s important to have a basic understanding of the legal aspects of planned giving, always encourage donors to consult with their own legal and financial advisors. Consider partnering with local attorneys who specialize in estate planning to provide guidance and support for your program.

What’s the best way to approach donors about planned giving?

Start by cultivating strong relationships with your donors. Educate them about planned giving options through various channels, and when appropriate, have personal conversations about their philanthropic goals and how planned giving might help achieve them.

Starting a planned giving program can be a significant undertaking, or you can focus on a simple, bequest-only program and grow from there. Either way, with careful planning and dedication, a planned giving program can provide tremendous benefits to your organization and your donors. By following the steps and best practices outlined in this comprehensive guide to planned giving, you’ll be well on your way to creating a successful legacy giving program that secures your organization’s future — and helps donors leave a lasting legacy, too.

Remember, the key to success in planned giving is patience, persistence, and a genuine commitment to helping donors achieve their philanthropic goals. As you embark on this journey, stay focused on building strong relationships, providing value to your donors, and always keeping your organization’s mission at the forefront of your efforts.