Professional Information A-Z
FAQ Series: Planned Giving

FAQ Series: Planned Giving

For more information on capital campaigns, see Funding Development in the Joint SOLS/OLS-N Professional A-Z pages, as well as the BookList: Fundraising, Board Development in Nonprofits, and Volunteer Program Management (.pdf).

What is planned giving?

Planned giving is the fundraising term used to describe donations that are usually incorporated into the long-term financial and estate planning of the donor. These gifts are often the largest donations a donor will make in their lifetime. Planned gifts are made after careful consideration of the donors giving priorities and typically used to benefit organizations theyve had a long-standing relationship with. When the concept was first developed it referred to gifts that would be realized after the donor has died with the primary vehicle being testamentary gifts or bequests. This has changed slightly in recent years as fundraising has become more professionalized. Planned giving can now incorporate more structured gifts like annuities or the transfer of large gifts while the donor is still alive, such as insurance policies or significant assets. However, the vast majority of planned gifts come through bequests and for most organizations this should be the focus.

We have information at funeral homes - is this planned giving?

Typically the information that you would leave at funeral homes is for tribute or memorial gifts. These are relatively small donations made by surviving family and friends to pay tribute or memorialize someone who has died. These are not considered planned gifts.

How do I start a planned giving program?

Setting up a planned giving program is relatively easy and inexpensive. Of primary importance before you start to publicize your planned giving program is to have policies and procedures in place to know how youre going to deal with the gifts and who the lead staff person is going to be to answer questions about the program. Please see the sample policy document created as an illustration of what could be developed, as well as Barrie Public Library's policy. Once your policy is established, you can use existing communications vehicles like your website and newsletters to market your program and create a simple brochure to augment these. (See more about this below.) You dont have to provide a lot of technical information about planned gifts at the outset. You just need to open the conversation with donors. You may be surprised that some donors have already mentioned the library in their wills yet never let you know simply because you never asked. As you can appreciate, it is a delicate conversation to have for many donors as youre potentially discussing aspects of their death and other very personal details of their finances.

Is your library ready for planned giving?

Planned giving is a relatively simple program to launch for your library as it doesnt require the resources that some other fundraising programs do. In fact, libraries are frequently the beneficiaries of bequests. That doesnt mean they are adequately prepared to receive these sometimes large gifts of cash or other assets. Readiness for planned gifts should include: knowing what the libraries is going to do with a large gift; knowing how to recognize the gift; knowing how to deal with the donors family; knowing how to deal with questions from lawyers; and, knowing how to turn down a gift that you may not want. Such issues as accepting gifts of art or real estate should be discussed and policies and procedures developed before the library launches a formal planned giving program.

What do I need to know about planned gifts?

You need to know where to go to get complex legal and financial information quickly. There are some good print resources available to help you get started to familiarize you with the possibilities. [See book list] One of the best strategies is to create a committee of volunteers with specialized expertise; these people are referred to as your Allied Professionals. You want to have a lawyer who specializes in wills and estates, a financial professional who deals with estate planning and tax implications of making charitable gifts; perhaps someone who works in the insurance industry and has experience in transferring insurance policies to charities. Once you have these volunteers in place you can then use them as your experts to answer difficult technical questions about the librarys planned gift program.

How do I market the program?

Planned giving can be a very passive program once youve established the policies and procedures. It can sit in the background waiting for a donor to approach the library about their intent to leave a bequest. Or you can actively market your planned giving program and dedicate resources to promoting it. Here are some suggestions of what you can do initially to make donors aware of your program.

Create a brochure and distribute it to your local professional community, including estate lawyers, financial planners, and insurance agents. It is important as a first step to get this material into the hands of the professionals who are advising their clients on making their wills and estate plans. This print information should also be available at the library, perhaps in an information rack. The brochure is a passive device meant to begin the conversation with potential donors. It does not have to be filled with technical information. SOLS has developed a simple brochure for this purpose that libraries can customize and purchase.

Planned giving programs rely primarily on bequests, so it is important to provide clear direction for donors on how they can mention the library in their wills in legal terms. There is a document entitled recommended wording posted in the Joint SOLS/OLS-N Professional A-Z .This document can be customized for individual libraries and made available on their website. This information can also be distributed to allied professionals so they have specific information about the proper legal wording recommended by the library should a client want to make an estate gift.

Celebrate the planned gifts that you receive. People like to give by example, so you might influence some potential donors to consider making an estate gift just by showing that it can be done. The key is that in celebrating the gift, you let the readers know how the library used the money. If you can convey that there is a need to be met through large estate gifts, then potential donors will be more interested to make the commitment. Older donors like endowments; they respond to the idea that their money will be a perpetual gift to the library.

If you have a community foundation you can work with it to set up a general fund for the library and promote the idea of named endowed gifts to benefit the library. Barrie Public Library has done a good job of this and received two endowment gifts in 2007. Go to their website to see the page on the Endowment Funds and how they celebrated the gifts. Host estate planning workshops at the library using the expertise of your allied professional volunteers.The age group that is most likely to make a planned gift to the library is also interested in financial planning and estate planning information. Libraries have great potential to offer this kind of information to the public. You can use this opportunity to distribute your planned giving material as well as build partnerships with your local legal and financial planning community.

How do you become comfortable enough to talk with donors about their gift plans?

Planned giving is difficult for many reasons, especially the technical nature of the gifts. After all, we are talking with donors about money they will leave the library in their estate when they are gone. This is not a conversation you broach easily and every donor will have a different comfort level in talking about it. Thats why a good initial strategy to begin is to leave written material in various places and hope potential donors will initiate the conversation once they feel comfortable enough to discuss it. It is important for library staff and volunteers to remember that, whatever the negative connotations may be with bequests, there is the positive side. We are referring to an individuals desire to create a legacy and have an impact on the future of the library and his/her community, and that is something to be encouraged.

How do you start a discussion about planned gifts?

It is not easy to speak with a donor about their gift planning. A common way to open the conversation is to ask if the potential donor has made a will. Unfortunately, very few people have wills. The reality for charities is if your donors do not have wills, you will not receive a bequest. This is often a difficult discussion to have on an individual basis and one of the reasons we suggest hosting estate planning workshop with professionals is so that they can promote the importance of having a written will. From there, you can suggest that the donor consider making mention of a charitable gift to the library.

Who is the best market for bequests?

It is not only wealthy people who leave bequests. Bequests often come from people of limited means but who are passionate about the library. For many of them, leaving a bequest is a way to do something they never could have done during their lifetimes. Perhaps the target market is seniors in their sixties and seventies. They are the most receptive to estate planning information and they are a generation of civic minded people who have a good history of giving back to their communities. In recent years, younger people have taken an interest in planning their estates as part of a comprehensive financial plan. So the age of the target group has been dropping, so consider young seniors and early retirees at 55 and up.

What are the main reasons people would make a bequest?

People give through bequests because they believe in the mission of the organization. People leave bequests to the library because they have had a life-long relationship with it and they want to make sure the community will continue to benefit from its services. They trust you to use their gift wisely. They believe in what the library stands for and what it delivers. They often have a direct connection to the library as a patron, user of home delivery service or they have a fond memory of the library from their childhood or school days. Often tax benefits dont figure in their decision-making.

How long will it take to see results from a planned giving program?

Of course this is difficult to predict and is probably the most often asked question from your board. Depending on the resources you put into the program, it may take five to ten years to actually realize bequests as a result of your marketing material. This shouldnt dissuade you from creating a policy to accept planned gifts. A library should always be prepared to provide information to a lawyer calling on behalf of his or her client interested in making a bequest.