Beyond Bequests: Common Planned Gifts That Don’t Require In-House Expertise

Planned giving should be a critical piece of every nonprofit’s fundraising strategy. Yet, many organizations are leery of promoting planned gifts because they fear they do not have the expertise in-house to properly manage these gifts.

That’s a legitimate concern. After all, you don’t want to make promises you can’t keep.

But what if I told you there are a number of planned gifts you can promote with relative ease because they do not require in-house expertise? (I’m one of the few attorneys who will tell you that you don’t need an attorney.)

You might think differently about marketing planned gifts to your supporters.

Here are two types of planned gifts that any nonprofit can manage — along with simple suggestions for how to market them.

Beneficiary Designations

Your charity can receive a gift from any financial asset that has a death beneficiary feature.

The most common example is life insurance.

If a policyholder lists a nonprofit as a beneficiary, the nonprofit will get its share of the policy’s proceeds (i.e. death benefit), when the person dies.

This type of gift is typically seen among donors in their mid- to late sixties or beyond who bought life insurance for a particular purpose — say, to provide for college education or to guarantee that the mortgage would get paid off in case of their untimely demise. With those needs having been satisfied, the policy is now ripe for charitable giving.

Even better, one policy can help your donor’s family and nonprofits. Since policies can have multiple beneficiaries, the policyholder may choose to split her benefit among her children and one or more charities however she chooses.

If she has a $500,000 policy and three surviving children, she can give a share of that $500,000 to the three children — and provide what’s left to her favorite nonprofit(s).

To list your organization as a beneficiary, your donors need only your legal name and tax ID number.  That’s what they use to fill out the insurance company’s change of beneficiary form.

Beyond life insurance, any of the following assets may have a death beneficiary, payable on death or transfer on death clause that can mean a long-term gift to your charity:

• 401(k) and 403(b) retirement plans
• Individual Retirement Accounts — including Roth, traditional, Simplified Employee Pension and SIMPLE
• commercial annuities
• checking and savings accounts
• brokerage accounts

How to Market Beneficiary Designations

Promote these gifts in a sidebar in your print or email newsletters, or your next annual report; on your website; and in prospect and donor meetings. Urge potential donors to think about their assets that have death benefits and consider naming you in them.  List the possibilities above in an eye-catching, bulleted list. Provide the two pieces of required information, and tell them it’s as simple as transferring the info to a change of beneficiary form.

I was on one call for a client where I navigated their aspiring donor to the form on their financial institution’s website.

When donors tell you they’ve named your organization as a beneficiary, welcome them to your recognition society. 

Living Trusts

Living trusts aren’t created for charitable purposes, but the remainder (the unused portion at death) can include a charitable gift.

The trust details how assets are to be passed upon the death of the trust owner, and your nonprofit can be included in that distribution. In that respect, the trust is similar to a will.

You can figure out which of your donors already have a living trust by looking at the checks you receive.  For those that say, “trustee of revocable living trust” or “living trust” in the identification block, flag donors who are owners and trustees of this type of trust and are already using it to make gifts to you. That’s because while living, all your donor’s assets, including their checking account, are put into the trust. (In most cases, owners of these trusts act as their own trustees.)

How to Market Living Trusts

If you identify trust owners, you can target a solicitation to them asking them to consider including you as a remainder beneficiary. You want to do that after you have a strong relationship. A serious call-to-action comes only after proper cultivation.

If you don’t know of any living trust owners, you can still generally promote the idea with the methods listed above for beneficiary designations. You might have constituents owning living trusts who aren’t current donors, or who give using unflagged assets, like stock or IRA rollover.

Bountiful Bequests

Never abandon your bequest marketing in favor of other gift possibilities. Keep up consistent bequest mailings and additional promotion channels, and the gifts will come in.

If you have the resources to promote only one planned gift, make it bequests.  They are the bedrock of every program, and it is perfectly respectable to stop digging when you hit bedrock.