The ‘New Look’ of Major Giving

It takes about 15 years for our perceptions to catch up with reality. Americans are just beginning to understand that the majority of elderly people are living well into their 80s and 90s -- rather than the “three score and ten” we were once told to expect out of life.

So how does Americans’ increasing longevity affect major giving?

By focusing on bequests and planned gifts, many charitable organizations will actually bring in more money from a broader base of supporters than they can through a focus on currents gifts.

A recent Merrill Lynch survey revealed that adults ages 45 to 64 are afraid they will outlive their money. And 47 percent of women and 33 percent of men in households with annual incomes greater than $50,000 are “very” or “somewhat” concerned that they will outlive their retirement savings, according to the International Association for Financial Planning in Atlanta.

As Americans understand the financial implications of their own increasing longevity, “ultimate” gifts -- sacrifice gifts of assets during one’s lifetime -- will be made reluctantly, at best.

The typical major gift was once a one-time “sacrificial” contribution from an elderly donor near the end of her life. It was usually directed to a charity’s capital needs. However, concerns about outliving one’s assets suggest that there will be an increasing reluctance to part with assets until death. Economic and demographic changes are forcing pre-retirees and young retirees to re-evaluate how they’re going to fund their extended “golden years.”

While there are still a number of older individuals who wait until close to the end of their lives to make a grand gesture to charity, many midlife donors are able and willing to join the party if we re-define what gets them in.

This “new look” in major giving includes larger annual gifts made from the donor’s income as opposed to his or her assets; committed giving over a period of months, years or decades; and special gifts when life-stage changes provide opportunities.