When your nonprofit aims to maximize donor outreach, you’re likely hoping to reach new supporters or secure recurring donations. However, there’s a source of funding you may be overlooking—planned giving.
Planned giving is a strategic approach that can benefit your nonprofit both immediately and in the long term.
According to Giving USA 2024, planned giving bequests accounted for $42.6 billion in charitable contributions in 2023, representing about 8% of total giving in the U.S. Additionally, research from the Lilly Family School of Philanthropy indicates that donors who include nonprofits in their estate plans often contribute two to three times more during those lifetimes than those whole don’t. In other words, planned giving is a wise focus for savvy organizations.
If your nonprofit wants to learn how to acquire planned gifts, you’ve come to the right place. While establishing relationships that can lead to planned gifts can take time, there are ways nonprofits can effectively raise more funds through this type of fundraising. This article provides a quick overview!
Understanding Planned Gifts
Let’s begin by understanding precisely what planned gifts are and how they differ from other types of donations.
Planned gifts are contributions of assets to a nonprofit that are arranged in advance, typically as part of an estate or financial plan. They are usually larger than one-time or recurring donations as they come from accumulated assets rather than current income, so they often occur after the donor’s death.
The donor gets the tax benefits while they are alive, and the nonprofit secures long-term funding.
Here are some of the most common types of planned gifts:
- Bequests: These are gifts made through a donor’s will or living trust. Bequests are the most common type of planned gift and are typically received after the donor has passed away.
- Charitable remainder trusts (CRTs): Charitable remainder trusts are irrevocable trusts that provide income to the donor or another beneficiary for a specified period (often the donor’s lifetime), after which the remaining assets are distributed to a nonprofit organization.
- Charitable gift annuities (CGAs): CGAs are contracts between a donor and a nonprofit. The donor makes a gift of cash or property, and in exchange, they receive a fixed lifetime income stream. After the donor passes away, the nonprofit retains the remaining value.
- Life insurance: Donors can name a nonprofit as the beneficiary of a life insurance policy. This allows the donor to keep costs relatively low while leaving a substantial gift after death.
- Retirement plan assets: Similarly, donors can name nonprofits as beneficiaries of IRAs or 401(k)s. These assets are heavily taxed if left to individuals, so leaving them to a nonprofit can help reduce heirs’ hefty tax burdens.
The benefits of planned gifts abound for both nonprofits and donors. Nonprofits can achieve long-term financial sustainability, especially after receiving planned gifts in addition to diverse revenue streams, such as increased recurring donations and merchandise sales. Donors, on the other hand, may receive tax deductions as a result of their gift, as well as a sense of fulfillment from leaving a lasting legacy.
How to Encourage Planned Gifts
Build a Strong Planned Giving Program
Just as you might have a dedicated recurring giving program or structured tiers for donors based on gift size, a planned giving program can help your organization acquire these gifts in a systematic way.
Here are some key steps to build a strong planned giving program:
- Assess your internal resources. Before launching a program, walk through the support you’ll need. Can your technology and team handle the program? Do you have a strong base of long-term supporters you can tap? Is your board on board? You’ll also need a fundamental legal and financial framework to accept large and/or complex gifts.
- Identify and segment potential donors. Use your CRM to identify loyal, long-term donors, particularly those over the age of 55. Many CRMs will offer wealth screening tools that can help identify prospects. Pay attention to donors who have consistently engaged, not just those who have made large gifts.
- Develop clear messaging and collateral materials. It helps to create a branded planned giving program with a name, logo, and messaging. Provide written and digital resources that explain types of planned gifts, the benefits to donors, and even sample language for wills. Address common misconceptions, such as the notion that donors have to be extremely wealthy to leave a legacy gift.
- Train staff and board members. Provide tips on discussing planned giving. Consider hosting short workshops where team members can practice having conversations with donors or answering tough questions.
- Nurture your planned giving donors. This is a unique and priceless group of supporters, so create a recognition program for them. Offer ongoing communication, event invitations, and even public spotlights if they wish.
- Incorporate planned giving into fundraising appeals. Even asking “Have you considered leaving us in your will?” on your website or in donor communications can trigger the thought process.
- Measure and refine the program. Ask for feedback and use your CRM to track prospect growth, stewardship efforts, and marketing reach, allowing you to refine the program even as it grows.
Educate Donors on Planned Giving
Many donors are unaware of planned giving. As the expert, it’s your responsibility to communicate planned giving opportunities clearly.
You can create a series of resources that will educate your current and prospective donors. They can include:
- Website landing pages
- Brochures
- Webinars
- Informational meetings
Wherever possible, infuse your educational materials with impact data demonstrating what your nonprofit can accomplish with gifts like these. And always point out the tax and financial benefits to donors!
Personalize Your Approach
Planned giving outreach is most effective when it’s deeply personal. Align your approach with a donor’s values, interests, and giving history to make the gift seem like an extension of a donor’s lifelong generosity.
Here are a few ways to tailor planned giving opportunities:
- Offer legacy naming opportunities. Naming something provides the knowledge that the donor’s impact will be felt for generations. This can be a building, a bench, a garden, or even something intangible like a fellowship or mentoring program.
- Reflect their passion. If a donor has always supported a program, offer the opportunity to designate their planned gift to that area. Reinforce that their legacy will continue to support what mattered most during their lifetime.
- Discern their wishes. If someone is agreeing to have a building named after them, they might be interested in public recognition through newsletters, your website, or even a plaque on the wall in your offices. Someone else might appreciate a heartfelt, handwritten thank-you letter and invitations to events. Take the time to understand how they want to be thanked.
How to Engage Current Donors In Planned Giving
Identify Potential Planned Giving Donors
Don’t underestimate how much donor data can help you find potential donors! There are key indicators you can track. If a donor has a few of them, they might be a great prospect. Indicators include:
- Age (55 and older)
- Loyalty and longevity (given consistently over many years)
- Major gift history
- Wealth indicators (often available through your CRM)
- High engagement
As CharityEngine explains, fundraising software allows you to manage donor information efficiently with a centralized database, but it also hosts numerous features that can help your nonprofit reach donors effectively. Utilize this tool to identify prospects and craft direct appeals that will resonate with them.
Start Conversations Early
Planned gifts don’t usually happen after one conversation. They are the result of years of trust and meaningful engagement. It’s up to nonprofits to build authentic, long-term relationships that plant the seeds that will inspire donors.
Common donor stewardship strategies include:
- Prioritize personal outreach
- Invite donors behind the scenes, even through virtual calls
- Recognize milestones like giving anniversaries
- Share impact stories of how donor support makes a difference
- Ask for feedback through surveys and focus groups, not just donations
- Introduce legacy giving conversations gently
Consistent, authentic stewardship over time creates a strong foundation that will make planned giving conversations easier.
Recognize Planned Giving Donors
Depending on how they want to be recognized, highlight donors through a “legacy society” or donor recognition program. If they don’t mind public recognition, this type of promotion can also inspire other donors.
Measure the Success of Your Planned Giving Program
Finally, reflect on your planned giving results to identify successes and opportunities for improvement. Freewill’s planned giving guide recommends creating an intentional process for recording and analyzing your program’s performance in your CRM.
While planned giving programs can take years to yield actual gifts, it doesn’t mean you shouldn’t be tracking every metric from the program’s inception! There are some key metrics you can track to measure the success of your planned giving program:
- Number of confirmed legacy commitments. Track how many donors have formally offered a planned gift, usually through a signed letter of intent or a copy of a will. This is a direct measure of future revenue.
- Number of identified prospects. Monitoring how many prospects you’ve flagged in your CRM as potential candidates can show you how well you’re building your pipeline.
- Engagement touchpoints per prospect. Count the number of calls, visits, emails, and event invites per prospect. The more frequently you’re interacting, the higher the likelihood of a gift.
- Marketing Reach and Response Rates: This gets into the nitty-gritty marketing details. Measure email opens and clicks, content downloads, webpage visits, and even RSVPs to planned-giving events.
- Donor Conversations Logged: Track how many donors have expressed an interest to a staff member. This is an excellent gauge of interest in a commitment.
- Realized Planned Gifts: Tracking when a gift “comes due” gives insight into the long-term financial impact of your program
- Program Growth: Use your CRM to track the annual growth of your program. A thriving program indicates strong donor stewardship and increased visibility for your program.
Using this data, your nonprofit can learn from its mistakes and adjust its approach to raise more planned gifts in the future.
Planned giving may require long-term thinking and planning, but the potential impact makes it worth the wait. These gifts often represent the most considerable and most meaningful contributions a donor can make, helping nonprofits build sustainable futures and honor the values of their supporters.
Whether your organization is just beginning to explore planned giving or hoping to strengthen an existing program, now is the perfect time to act. Start by assessing your internal readiness, identifying prospects using your CRM, and crafting personalized outreach strategies that align with your donors’ values. Educate your team and your supporters, and remember that the smallest steps can begin to shift the culture.
With thoughtful planning and consistent stewardship, your nonprofit can build a program that will unlock transformational gifts and fuel your mission for generations.
About the Author
Philip Schmitz
Phil Schmitz is the founder and CEO of CharityEngine, a complete fundraising platform powering some of the nation’s largest nonprofits and associations. Phil has developed patent-pending anti-fraud tools and industry-leading recurring payment technology that allows nonprofits to retain more sustainer revenue than the industry average; clients have raised nearly $5 billion using these tools. Phil’s passion for leveraging technology to empower nonprofits is supported by more than 20 years of experience in building successful technology and e-commerce companies.
