How to Build a Planned Giving Program: A Guide for Fundraisers

Planned giving is an essential aspect of nonprofit fundraising, allowing donors to leave a lasting legacy through bequests and other planned gifts. Developing a planned giving program can provide a stable source of funding for your organization and help deepen relationships with your supporters. This guide will walk you through the key steps to build a successful planned giving program.

What is Planned Giving?

Planned giving involves donors making significant contributions as part of their financial or estate planning. These gifts can include bequests, charitable trusts, life insurance policies, and more. Planned giving allows donors to make larger gifts than they might be able to give during their lifetime, providing them with an opportunity to make a lasting impact on causes they care about.

This form of fundraising is called “planned giving” because it requires much more planning than your typical donation, often taking 7-10 years to come to fruition. Planned gifts are more complex than cash donations, requiring tax advisors and legal counsel to be involved in the donation. 

Benefits of a Planned Giving Program

Keep these benefits in mind when building out a planned giving program to help you stay motivated.

• Top of the donor pyramid: Planned gifts are some of the largest donations. While there isn’t a ton of data on the size of planned gifts. The Survey of Wills by Everyday Donors shows that “everyday donors” included an average bequest in their estate plans of $78,630. Meanwhile, Prisma Health’s Upstate’s average planned gift is $928,000. 
• Long-term Financial Stability: Planned gifts often come from the estates of donors, providing a significant source of funding that can help ensure your nonprofit’s financial stability for years to come. 
• Enhanced Donor Relationships: Engaging with donors about planned giving can deepen their commitment to your organization, as they become more involved in its long-term success.
• Increased Fundraising Capacity: A well-established planned giving program can complement your other fundraising efforts, helping to diversify your revenue streams and reduce reliance on annual campaigns.

Planned Giving Myths Debunked

There are a few common misconceptions around planned gifts, so let’s get these out of the way before we get too much farther. 

• ‍It's not just for the wealthy: Anyone can participate in planned giving, not just high-income earners. Planned giving allows people to donate assets other than cash, such as stocks or property, and often comes with tax benefits.
• ‍Focus on relationships, not death: Fear of discussing death can be a barrier to planned giving. Successful programs focus on a donor's desire to leave a legacy and make a difference, rather than focusing on death itself.
• ‍Planned giving doesn’t hinder annual giving: In fact, the opposite is true. Russell James, Texas Tech professor conducted an analysis of charitable bequests and found that donors who added a charitable beneficiary to an estate plan increased their average annual giving by more than $3,000 after making the planned gift. Planned giving makes the donor even more invested in the cause. 

Types of Planned Gifts

Planned gifts, also referred to as legacy gifts or deferred gifts, offer a way for individuals to support causes they care about while potentially receiving tax benefits. There are several different types of planned gifts, each with its own advantages and considerations:

1. Bequests

This is the most common type of planned gift. A bequest involves leaving a specific amount of money, property, or even a percentage of your estate to a charitable organization through your will or living trust. Bequests are a flexible option and can be arranged with minimal cost during your lifetime.

2. Retirement plan assets

Donating unused assets from retirement accounts like IRAs or 401(k)s can be a tax-smart way to give. Retirement accounts are typically subject to income and estate taxes when withdrawn by beneficiaries. Donating these assets directly to a charity allows you to avoid these taxes and make a significant contribution.

3. Life insurance

You can designate a charity as the beneficiary of your life insurance policy. This allows you to leverage a relatively small ongoing cost into a potentially large future gift.

4. Gifts of stock

Donating appreciated stock to a charity can offer double tax benefits. You avoid capital gains taxes on the appreciation and receive a charitable deduction for the fair market value of the stock.

5. Charitable gift annuities

This option allows you to donate a large asset, such as cash or securities, to a charity in exchange for a fixed stream of income payments for yourself or another beneficiary. A portion of each payment you receive may be tax-free.

6. Charitable remainder trusts

Similar to a charitable gift annuity, a charitable remainder trust allows you to transfer assets into a trust. The trust provides income payments to you or a beneficiary for a set period, and then the remaining assets pass to the charity.

7. Charitable lead trusts

This is a more complex planned gift option. A charitable lead trust provides income payments to a charity for a set period, and then the remaining assets pass to your beneficiaries. This can be a tax-efficient way to transfer wealth to future generations while benefiting a charity.

It's important for a donor to consult with a financial advisor and estate planning attorney to determine the best type of planned gift for their circumstances. These professionals can help donors weigh the tax implications, impact on their beneficiaries, and ensure their charitable giving aligns with their overall financial goals.

Steps to Build a Planned Giving Program

1. Lay the Foundation

Identify potential planned givers

Start by assessing the potential for a planned giving program within your donor base. Review wealth screening and giving history data to understand if any of your donors have the ability to participate in planned giving. 

The upcoming transfer of wealth from the Baby Boomer generation is estimated to be the largest in history (estimates are around $84 trillion!), with planned gifts playing a major role. This generation could be a good one to strategically target.

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Set Clear Goals

Define what success looks like for your planned giving program. Set measurable goals such as the number of new planned gifts, the total value of planned gifts, or the number of new planned giving donors.

2. Educate and Engage Your Donors

Provide Information

Educate your donors about planned giving options through newsletters, your website, and informational seminars. Help them understand the different types of planned gifts and the benefits for both them and your organization.

Highlight Donor Stories

Share testimonials and stories from donors who have made planned gifts. This can inspire others to consider making similar contributions.

3. Develop Marketing and Communication Strategies

Create a Planned Giving Guide

Whether it’s a comprehensive brochure or an online guide, provide a resource for donors that outlines the various planned giving options, benefits, and the impact of these gifts on your organization’s mission. 

Use Digital Marketing

Utilize your website, email campaigns, and social media to promote planned giving. Create dedicated web pages that provide detailed information and easy-to-access resources for potential donors.

4. Train Your Team

Staff Training

Ensure your fundraising team understands the nuances of planned giving and can effectively communicate the benefits to donors. Provide ongoing training and resources to keep them updated on the latest tax and legal requirements.

Board Involvement

Engage your board members in the planned giving program. They can serve as advocates, introducing you to potential planned givers, and may even consider making their own planned gifts.

5. Cultivate Relationships

Personalize Communication

Personalize your outreach to potential planned giving donors. Establishing a relationship is key to building trust with planned donors. Tailor your communication to their interests and values, and make them feel valued and appreciated. 

Regular Follow-up

Maintain regular contact with your planned giving donors. Provide updates on your organization’s progress and how their future gifts will make a difference. 

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Develop dynamic donor plans

Regular communication is key to cultivating a long-lasting relationship. However, it can be challenging to prioritize ongoing outreach. Leverage Momentum’s dynamic Donor Plans to help you prioritize outreach, craft communications, and build relationships

Explore Donor Plans

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6. Recognize and Steward Donors

Acknowledge Contributions

Publicly recognize planned giving donors through your annual report, donor wall, or special events. This not only honors their generosity but also encourages others to consider planned giving.

Create a Legacy Society

Establish a legacy society to honor donors who have included your organization in their estate plans. Offer exclusive benefits and recognition to members, fostering a sense of community and commitment.

Best Practices for Planned Giving Programs

1. Keep Donor Interests at the Forefront: Always prioritize the interests and motivations of your donors. Understand their personal and financial goals and work with them to find planned giving options that align with their needs.

2. Collaborate with Financial Advisors: Work closely with donors’ financial advisors to ensure that planned gifts are structured in a way that benefits both the donor and your organization.

3. Stay Informed on Legal and Tax Implications: Ensure your team is knowledgeable about the legal and tax implications of planned gifts. This will help you provide accurate information to donors and avoid potential pitfalls.

4. Regularly Review and Update Your Program: Continually assess and refine your planned giving program. Track your progress against your goals and adjust your strategies as needed to improve effectiveness.

Every Planned Giving Program Needs the Right Workflow

Building a successful planned giving program takes time, effort, and strategic planning. By educating and engaging your donors, developing effective marketing strategies, and fostering strong relationships, you can create a program that provides long-term financial stability and deepens donor engagement. Start laying the groundwork today, and watch as your planned giving program grows, leaving a lasting legacy for your organization and its mission.

For more insights and tools to help you build and manage your planned giving program, explore Momentum’s AI Donor Engagement Platform. We've partnered with Giving Docs to develop cutting edge tools for planned giving fundraisers. From personalized donor plans to predictive insights, Momentum and Giving Docs can help you streamline your efforts and maximize your impact.

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