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.
Great post!
The secrecy of planned giving is one that isn’t discussed much. Really great info!
Great tips!
Great tips. Thank you!
As a 30-something, I really had no idea about the potential for even middle-income earners to have contributions for planned giving. Good to know!
Good article, thanks!
Wow! Lots of good info. Thank you!
Great article – thanks!
Excellent stats, thank you!
Really interesting – I know when I think planned giving I think uber-wealthy. Looks like it’s time to shift my thinking!
Thanks for posting! I don’t know if my organization does this at all, something to ask about…
Good stuff!
Wow! This is fantastic. Thank you for sharing. This is definitely an approach that we wouldn’t have considered before reading this.
Great tips! thanks for posting.
Great tips. We have just begun to build our Planned Giving program and as the data analyst, I have noticed many trends in the different age groups and how they respond to our emails on this topic. The baby boomers are interested and looking for information on the topic and how to participate.
Great tips, thanks!
Great tips to pass on to my team – thanks!
Some good advice.
Secrecy is a thing. We decided to publish our list of bequests and planned gifts in our Annual Report.
Absolutely great article. You never know where that kind of gift will come from. I once worked for a organization that had a $20 a year donor leave $7million in a bequest. She had never been asked because she was just a $20 a year donor.
Great tips! Yes, it is important not to prioritize affluence over affinity!
Thanks for the post. I wish our organization could return to the time we actually had a full-time planned giving officer.
An area to expand into.
thanks so much! this is an area I think many are challenged and befuddled with
Really good information – thanks!
Great insights
Love this! Thanks!
Wealth transfers will occur with or without us. Thanks for the motivation to connect with our donors in this regard.
Good Info!
Very helpful information. Finding the right story to share on social media would be important and having staff that is trained in estate planning basics would be beneficial when discussing estate options with potential donors.
Very helpful tips, thank you!
Thank you for sharing this!
Thank you for the tips. A couple of years ago, we engaged in a purposeful campaign to increase our number of planned givers; we now have almost 100 donors that have added us to their estate plans.
Good read!
Thanks for sharing
Thanks for sharing these tips. I enjoyed the article.
Great tips!
We’re definitely working on improving our Planned Giving, and using some of these tactics.
Oh wow! That was timely & helpful for us!
Interesting to see an approach to the middle income.
Make it easy. Yes!
Great steps!
Great article both for how to approach my philanthropy asks, but also my own giving. Off to go review my own will!
Interesting
Great tips. Thank you.
Helpful information as we are ramping up our planned giving program!
Excellent post – this is fantastic information to take to our Planned Giving Director! Thank you!
Yes to all of these tips. Now to get staff to overcome their fear of discussing PGs!
I appreciated hearing the fact that bequests are often three times larger than a donor’s total lifetime giving.
Perfectly timed for my office. Thanks for all the good tips!
Thanks! Good tip!
Thanks for sharing!
All great tips. Social media is big in every aspect of fundraising.
Great tips!
Time to expand our thinking, thanks for the words of wisdom