It’s Time to Go Beyond the Usual Suspects in Planned Giving

Experienced nonprofit managers and leaders tred a well-worn path when thinking about planned giving. First look at your existing donor list, then screen for wealth and age. Once the older, high-net-worth individuals with a history of donating to an organization have been identified, focus and build relationships with them before making an ask for a bequest or a blended gift. Hopefully one that’s six or seven figures.

This is all understandable — but it leaves a massive amount of money on the table. And many organizations have far less funding than they could as a result.

A $30 trillion missed opportunity

As baby boomers pass their assets on to the next generation over the next few decades, it will be the biggest wealth transfer in human history: $30 trillion dollars, and may be the biggest opportunity for philanthropy in the history of the world. Yet, many nonprofits risk missing this opportunity by remaining solely focused on the wealthiest in their supporter base. It is time for nonprofit leaders to cast a wider net.

The data we’ve collected at FreeWill, through the more than 22,000 people who have created estate plans and pledged more than $270m in bequests, has unearthed unexpected insights about who nonprofits are targeting and what they are missing out on.

The lion’s share of that quarter-billion has come not from the very wealthy, but from a large number of individuals who have less than $1 million in assets. (The average bequest from a middle-class person is roughly $70,000).

This points to a truth that many planned giving professionals know, that their bosses often miss: In aggregate, middle- and upper-middle-class donors have far more potential for planned giving than do a few of an organization’s top benefactors.

The math is simple, but easy to forget: Folks that aren’t very wealthy have 90% or more of their wealth tied up in illiquid assets like real estate and retirement accounts, while high-net-worth individuals have a much greater share of their wealth available to give now. As a result, bequests are often three times larger than a donor’s total lifetime giving. And if you’re ignoring planned gifts, you’re missing out on nearly 75% of what that person can give.

Nonprofits that know this also know that generating planned gifts from a large number of small donors requires a fundamentally different approach that working with just a few of their top donors. Here are three tips to help.

Tip One: Go wide, and go digital.

As Boomers overtake the Mature Generation as the majority of planned giving prospects, digital avenues are becoming increasingly needed to serve and reach them.

The good news is that this allows a wider reach for less cost, as we know that many planned giving donors may be volunteers, infrequent donors, or even non-donors who simply identify strongly with your cause but have not had the resources to give during their lifetimes.

When the Hearing Loss Association of America (HLAA) approached donors in September and October this year, they found that even those with relatively few assets were interested in making planned gifts. The organization secured an additional five bequests with a few thoughtful emails.

Tip Two: Use social proof (and social media).

Planned giving is often so private that most people have no idea if anyone else is doing it! Featuring normal folks who’ve made bequests to your organization can normalize it for everyone else. Similarly, a post on social media can become quite powerful when supporters like and share it — earlier this month, Miracle Hill Ministries saw one social share lead to six further wills and planned gifts being created. These small numbers add up!

Tip Three: Make it as easy as possible.

Years ago, I ran email fundraising for President Obama — and that team led the charge in making it as easy as possible for folks to donate $25, with great success that quickly copied by nonprofits everywhere. Yet planned giving and estate planning remain both intellectually and emotionally overwhelming for most donors — fewer than half of Baby Boomers have any estate plans at all! While the wealthiest have hordes of advisors, many middle-class families are fumbling in the dark on these topics. Do what you can to clarify and simplify the process for them.

ABOUT THE AUTHOR

Patrick Schmitt

Patrick Schmitt, co-founder of FreeWill, a company that provides a free online estate-planning tools, is a leading innovator in nonprofit fundraising and technology for social impact. He is the founder of two nonprofit organizations, and ran email fundraising for President Obama from 2009-2010, generating record amounts in online donations. He was also the Head of Innovation at Change.org, where he helped grow that organization to 100 million users in just four years.