Focus On: Planned Giving: Helping Donors to Look Ahead
Having worked with three nonprofits over the past 17 years has taught me the importance of identifying and nurturing one of the most significant resources of any organization — its older donors. Cultivating these donors enriches their lives and allows them to have a positive impact on their favorite charities beyond their cash-generating years.
Properly approaching older donors is contingent on a respect for them and their needs, as well as an appreciation that those needs, and their ability to help an organization, will change as they grow older. In order for an organization to realize the long-term value of its older donors, its staff must be willing to promote a carefully cultivated relationship, which occurs over donors’ entire involvement with the nonprofit — not just during the period when they can generate immediate cash gifts.
I’ve been very fortunate at the three organizations I’ve worked with — World Neighbors, Food for the Hungry and MAP International, all of which have a large number of donors 65 years or older and whose founders were still alive during my time of employment. This allowed me to identify the donors who had good relationships with the founders and those who might have been ignored over the years because they hadn’t provided any “major” gifts.
One such couple, John and Amy, had been recruited by one of the founders more than 40 years ago because they had a business background and the nonprofit needed someone to market its programs on the West Coast, which the couple did for a number of years. Next, the founder asked them to go to Europe and set up a program there.
When they were ready to retire, John and Amy moved to Arizona, which is where I met them. I spent time asking about their history with the founders, which values of the organization they appreciated the most, and which of their accomplishments in working with the agency they were most proud of. Since they had a long history with the nonprofit, I asked for their help meeting some of the donors they knew and with whom they could help open a door for me. Later, I brought in some of our key staff, including our chief executive officer, to meet with them and thank them for their commitment.
We highlighted them in our Legacy newsletter as an example of the type of committed donor we wanted others to emulate. I provided an autographed copy of our founder’s memoirs and then talked to them about making a special gift for our organization’s 50th anniversary. During this process, John passed away, and I gave a eulogy at his memorial service.
Over the 10 previous years, John and Amy had been giving $50 to $90 a year, so they hadn’t shown up on anyone’s radar as a major donor. I asked Amy if she would consider a special anniversary gift, and when she expressed an interest I opened a dialogue with her financial planner — who was with National Christian Foundation — and brought in our CEO to request a special three-year, six-figure campaign gift. Amy provided the gift, and we’ve continued thanking her for her special commitment. Today, she continues to open doors for us, including with her daughter and son-in-law, allowing us to work with the next generation of givers.
Nurturing older donors
Following are some important steps an organization should take to identify and nurture relationships with its older donors.
1. Implement an age/wealth overlay to identify those donors who have been with the organization the longest, and focus on their cumulative giving.
2. Increase the level of personal contact with these donors by asking several staff to call or visit them whenever possible to learn about their history and ties to the founder and the organization.
3. Bring in a consultant to help determine the long-term value of older donors and to promote the program. My mentor had developed the program at World Neighbors with Robert Sharpe Sr. — a name synonymous with planned giving. His son, Robert Sharpe Jr., was instrumental in putting together the “older donor” program with me at several organizations where some staff and the direct-marketing people never heard of such a concept and initially were reluctant about it since it didn’t meet immediate cash needs. He helped the leadership appreciate that the average value of estate gifts, which ranged from $20,000 to $30,000, could generate millions of additional dollars each year.
4. Find a direct-marketing firm with experience promoting planned giving.
5. Decrease or eliminate appeal letters and avoid attempts to upgrade older donors. Instead, focus on sending them informational pieces about the agency and, when possible, information relating to the organization’s founders, its history and impact, and any positive feedback from reputable ratings sources such as Money and Forbes magazines, the Better Business Bureau, Guidestar and MinistryWatch, etc. We developed Legacy newsletters and published memoirs or books by the founders for this purpose.
6. Let the older donors tell their own stories by highlighting their accomplishments, ties to the founder or the organization, and how they’ve influenced it in different ways over the years.
7. Assign one staff person to be responsible for overseeing the relationship-building process among the top older donors, especially those who have the organization in their wills, have annuities or have set up trusts that include the agency.
8. Once a donor has the organization in his or her will, identify other estate-planning needs and opportunities through direct marketing and personal contact, and work with the donor’s financial planners and lawyers to develop deferred gifts. Donors should be motivated to make their “once in a lifetime gift” while they’re still around to enjoy its impact.
9. Establish a donor-recognition program that includes longevity and cumulative giving as the focus, and then provide simple incentives that relate to the founder or the organization’s beginnings.
Indicators to monitor and evaluate this process should include the level and type of personal contact, growth in the number of donors who place an organization in their will, the number of annuities and trusts set up by older donors, and the amount of cash generated by accelerating existing planned gifts. Sometimes when a donor passes on, it could take years for his estate to be processed and a check to be sent to a charity — unless someone is monitoring these gifts.
The key advantages of nurturing older donors are that it:
- Meets donors’ needs and interests, so they continue to give.
- Maximizes donors’ long-term value through their estate plans.
- Cuts back the cost of unnecessary mailings and materials that frustrate donors and give the impression the organization is wasting resources.
- Assures the organization maintains its ties to the initial values and key visionaries that made it what it is.
This approach is not for the “show me the money” fundraiser or organization, nor is it for the faint of heart. Since many older donors will live another 10 to 15 years before they actually produce their “once in a lifetime” gifts, the long-term financial value of these programs might not be realized for five to 10 years or more. In addition, 70 percent of donors reserve the right to change the designation of a charitable trust, and most don’t actually choose which charities they’ll include in their will until five years before they pass away.
An effective program that nurtures older donors helps integrate all components of an organization’s fundraising program — major gifts, planned giving and direct marketing — while focusing on the needs of the donor. From the beginning, the fundraiser needs to see this relationship as long term and established with an appreciation of the donors and their needs, and recognition of their special relationship and history with the organization.
Mark Walker is a senior representative at MAP International, a nonprofit Christian relief and development organization. He can be reached at firstname.lastname@example.org.