Planned Giving Fundamentals: Easy Steps to Begin Your Program

I generally don’t practice as a consultant to nonprofits, but on occasion, I get called in to discuss planned giving options, especially for smaller organizations. Often, they want to attempt to roll out a planned giving program without first laying the proper groundwork. In football terminology, start with basic “blocking and tackling.”

The first question I usually ask is “do you have a gift acceptance policy?” Normal response is generally, “What’s that?” Well, if someone comes to your organization tomorrow and wants to give you a marina on the Florida coast, can you accept it? Do you know? A well-drafted gift acceptance policy allows the organization to define the parameters of what kind of property it can accept, what actions they will take before they accept it and what role they will play after they accept it. While it sounds simple, there are so many different types of assets to consider and each of them have different consequences and complexities. Cryptocurrency anyone? Patents, farmland, antique cars. The list goes on and on.

Intuitively, it would seem that the broader the list of assets that a charity can accept, the more likely they are to reap the rewards. However, the charity must consider its own expertise, the availability of outside experts, its willingness to accept and understand the complexities of certain assets, and the risks involved. That marina on the Florida coast, for instance, may have negative cash flow, hurricane risk, environmental concerns, liability risks and competition from the marina next door. While all of those factors can be examined, assessed and, perhaps, overcome, does the organization have the human capacity and time to tackle the project. Having a written gift acceptance policy should take all of these factors into consideration.

Next, is your board informed and educated? It’s easy for the board to raise their hands and vote “aye” to beginning a planned giving program, but the board needs to know what it entails and what their role will be in the program. They should know how various gift structures work and what the charity is expecting, even establishing reasonable benchmarks. Planned giving programs are abandoned regularly because of the constant tension between current fundraising and future gifts. The organization has to have enough economic stability to devote time to planned gifts. What’s a reasonable timeline for progress? How will the organization let their donors (and potential donors) that there is now a program in place for planned gifts? It will take the backing of the board, the understanding by the board and the financial commitment to begin and sustain a successful program. Staff must be trained, time must be committed and messaging must be clear.

It’s very tempting to think that starting a simple bequest program or establishing a gift annuity program is the first thing a charity should consider when beginning a planned giving program. Clearly there is lot more to think about than the gifts.