Legacy Giving is an investment.
It is useful right off the start to realize that a legacy gift is an investment, not a donation and investments are driven by trust and confidence. You need to take the time to gain a person’s trust and confidence in your organization, as a good investment, before they are going to feel comfortable making this kind of gift to your organization.
Some people think that offering a legacy giving program is too complicated. It’s not really, but you must have a certain level of support before it makes sense to invest in the program. A fairly robust donor base, with an established annual fund program is a good start.
The board and staff must be committed to investing time and resources to develop gift acceptance and investment management policies, as well as systems to market and administer planned gifts. It doesn’t have to be complicated, but there are some process and administration issues that need to be addressed before you embark on this path of—what is often described as—transformational giving.
Legacy giving strategies
In Canada, we basically have six legacy giving vehicles: bequests, insurance, stocks and securities, RRSP’s and RIFF’s, gift annuities, and charitable remainder trusts. Deciding which legacy gifts you will accept is imperative. You do not have to offer all of the available options. In my opinion, all organizations should accept and promote bequests, simply because it is the most recognized and used vehicle available.
Promoting bequests doesn’t have to be in your face or distasteful. It can be a well-placed social media post asking/reminding your constituency to think about your charity when they are doing or editing a Will, which can be paired with a few pictures representing your organizations mission. You might be surprised at how effective this can be.
You can promote insurance and stocks the same way. Many people get insurance policies in their younger years to safeguard against any tragedies that might occur. When they reach the later stages of their lives, they often don’t need that policy for their family.
With matured stocks, the capital gains taxes to cash them out can be very high. Gifting them can significantly offset the tax burden while helping a favourite charity at the same time.
Feeling overwhelmed already? Don’t be. Allied industry professionals can be your best friends when it comes to setting up planned gifts.
Align with industry professionals
In all instances of legacy giving, you and/or your donor will have to work with an allied professional at some point. It is just the nature of the vehicles you are dealing with as they involve some binding legal terms and consequences. So, it is in every organization’s best interest to align yourself with some financial planners, estate lawyers, and accountants—the three go-to professionals in this area.
These alliances will avoid any perceived, or real conflicts of interest. Even if you have allied professionals on your executive and in leadership positions, they cannot represent both the institution and act on behalf of one of its donors in dispensing legal or other types of professional services.
Due to the high degree of specialization in the various professions (law, accounting, financial planning) most organizations—big and small—cannot maintain these skills in-house.
I did my master’s thesis on baby boomers and planned giving. One of the most interesting experiences I had during my research was when I completed the allied professional interviews. I conducted eight interviews, with a mix of lawyers, financial planners and accountants. They were all very good interviews, but two stood out, and one in particular I’ll never forget.
I met with a female lawyer who was well-known in the field and the region. When I asked if she discussed charitable giving in the Will with her clients, she said yes, if they bring it up. I dug a little deeper to find out how she approached the subject of legacy gifts and which charities she recommended (if any) to her clients. Then she blatantly stated, “Do you think I’m going to promote your charity’s planned giving program for you?” I was surprised by her candor, but at the same time, I sheepishly answered, “No, I guess not.” But, in fact in industry, that’s exactly what we expect.
There is definitive value in a partnership with an industry professional, but do not make the assumption that they are going to promote your church or charity over another, if at all. It is still the role of the charity to get donors thinking about leaving your organization a legacy gift.
It is always good practice to involve industry professionals in your organization as a volunteer through committee and board memberships. These roles include a responsibility to help develop the framework for gift planning in terms of policy-making, which also provides you an opportunity to share information about your charity.
Finally, it is important to always include a disclaimer on any printed legacy giving materials and correspondence that the information being provided is for informational purposes only. Encourage the donor to seek independent representation.
The truth is many fundraisers do not feel comfortable talking about legacy gifts, most often because they do not have the confidence in their knowledge on the subject or they feel uncomfortable talking about death with their donors. Either way, there are still opportunities that you can make a soft ask to your donors to consider you in their legacy giving. Knowing what to listen for, will help you discern when your donor is ready for a legacy gift conversation.
The next article in this series will discuss how you can identify your best legacy prospects.
Michelle Harder has over 25 years of experience in fundraising and non-profit development as a consultant and as part of an executive team. With a Master of Arts degree in Philanthropy & Development from Saint Mary’s University in Minnesota, Michelle has both theoretical and practical experience in fundraising. With a focus on small shop and faith-based fundraising, Michelle is driven by a passion to help organizations achieve their fundraising and strategic goals. As a consultant, public speaker and author of "The Definitive Guide to Faith-based Fund Development," Michelle has the expertise to help you raise the funds you need.
