A COVID-19 Call to Arms for Gift Planners

Posted by on May 05, 2020 01:31:08 PM

As estate planning surges in the US and donors require high-touch support to navigate this unique moment, savvy nonprofits are doubling down on gift planning in 2020.

Right now, gift planners are combining their dual abilities to nurture deep personal relationships and explain more complicated giving vehicles to help steer nonprofit organizations through the current storm. We’d like to remind you of a few facts about planned gifts that challenge the “cash is king” mentality that nonprofit leaders often fall back to during economic downturns.

Legacy gifts are almost always the largest gifts donors will make (one review of 10 years of IRS data found that a typical bequest averages nearly three times a person’s total lifetime charitable giving). They also have the highest ROI (costing as little as 11 cents per dollar raised, according to another study). Recent trends suggest that planned giving will become even more effective than any point in the last few decades

AARP research finds that 6 out of 10 U.S. adults don’t have wills and many who do have documents that are wildly out of date. But in the midst of the COVID-19 pandemic, Google reports that searches for “how to make a will” are 67% higher than they have been at any time in the search engine’s history. Other data from will-making sites and reports from lawyers show that your supporters are rushing to update their estate plans this year--and will do so with or without your guidance.

All of this comes against the backdrop of the coming “Great Wealth Transfer.” As 10,000 Baby Boomers are turning 73 every day, analysts predict that wealth transfer will accelerate toward projections that suggest as much as $8 to $9 trillion will transfer by 2027, and an additional $30 trillion in the years following. While it may take a number of years for the economy to recover from the current downturn, past experience shows that it will indeed recover and deferred gifts committed now will increase in value.

Substantial wealth is held in noncash assets that are especially impactful in charitable plans. As the interest in estate planning increases, donors feel more urgency about transferring these assets, which are often highly appreciated, in tax efficient ways. Your organization must maintain the ability to cultivate, solicit and guide these gifts.

For many organizations, planned gifts will be a “lifeboat” during this and future economic crises. The Nonprofit Research Collaborative’s surveys of the sector in 2009 found that, during the Great Recession, overall fundraising revenue decreased for 46% of respondents and major gift revenue decreased for 38%, but 78% said planned gift revenue did not decrease. The planned giving pipeline stayed open, even during the recession.

In CGP’s own member research, programs that had been actively cultivating planned gifts for more than 20 years were twice as likely to say that 20% of their revenue in fiscal year 2018 came from planned gifts. Those who continue to invest in this method of fundraising can power through this and future moments of uncertainty. Those who pull back now risk falling behind their peers for a generation or more.


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