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Don’t ignore the benefits of planned giving

By October 16, 2020January 12th, 2022Steier Tips

When we met with Bob and Cecilia as part of their parish planning study, we asked them 12 questions. Question 10 was: “Have you considered St. Mary’s in your will?” They looked at each other and said, “we’ve thought about it, but we’ve never gotten around to it, can you help?” Yes, we can. With a phone call from a grateful pastor and a helpful diocesan employee in the development office, Bob and Cecilia completed their will bequeathing St. Mary’s their home, valued at $450,000.

Would you be willing to spend a little time and money if it resulted in a financial contribution 200 to 300 times larger than a donor’s largest annual gift, even during economically challenging and uncertain times? At the Steier Group, we encourage and assist our clients in cultivating planned giving, also called legacy giving or deferred giving, as part of their comprehensive development strategy. With the end of the tax year quickly approaching, now is the perfect time to encourage and invite your organization’s members to consider making a planned gift.

Last year alone, Americans contributed $43.21 billion in bequests (Giving USA 2020). While bequests are the most common form of planned giving, particularly among the middle class, planned giving includes any financial vehicle which is disbursed over a period of time or at one’s death. Some examples include:

  • Appreciated Securities
  • Donor Advised Funds
  • Gifts of Life Insurance
  • Gifts of Retirement Plans and IRA Rollovers

Consider This:

  • Beyond Cash. The majority of charitable contributions are made with one’s disposable income – cash. However, cash represents a miniscule percentage of one’s net worth. Many people are cash-poor but asset-rich. Point in fact: at this very moment we are beginning to experience the largest transfer of wealth from the wealthiest generation in U.S. History. What some call the Great Wealth Transfer, baby boomers are expected to transfer between $60 trillion to $70 trillion of their wealth within the next two decades. While the majority of that wealth will likely be bequeathed to family members, nonprofits who continually cultivate, promote and facilitate planned giving stand to gain billions in donations.
  • Are you reluctant to ask during COVID and economic uncertainty? Abby Rolland of the Lilly Family School of Philanthropy reminds us, “There was a great deal of interest in planned giving during the Great Recession, so don’t be afraid to talk with your long-time, regular donors and see if they would be interested in making a planned gift now.” Be sure of this, other nonprofits are asking your members for financial support. Don’t be left out. Now is always a good time to inspire, invite and facilitate giving.
  • You don’t have to be an expert to promote planned giving. Pastors, principals and executive directors need not be experts in planned giving and should never give financial or tax advice. The typical profile of a donor who uses planned giving as a charitable vehicle is a high capacity giver with ready access to financial and tax expertise. In addition, most Catholic diocesan development offices have employees who are willing and able to assist your parishioners in making a planned gift. What is most important is that you are aware that these forms of giving exist and that you regularly include them in your fundraising appeals and material.
  • Remember: Planned giving doesn’t just benefit your organization; it also provides unique and significant tax benefits to the donor! During these last months of the year, make sure to emphasize the charitable giving incentives provided by the CARES Act. Some of these incentives are scheduled to expire on Dec. 31, 2020.
  • Are you uncomfortable talking about bequests? It’s understandable because you’re essentially talking about someone’s impending death. However, as we advance in years, we become more aware of and comfortable with the natural cycle of life which includes death. At the same time, the pandemic has also made us keenly aware of our fragility and mortality. Finally, it is healthy and natural for all of us to consider the impact our life is having or has had on others. Making a bequest can give peace to do the donor and blessings to the recipient.
  • For faith-based organizations, let the scriptures guide your conversation on planned giving. While the end of the tax year brings about a renewed conversation about end-of-year giving, the end of the liturgical (church) year for Catholics and most mainline Protestants brings about a stark change in the Sunday readings. Beginning with All Saints Day, continuing with All Souls Day and for six consecutive weekends, the Sunday readings focus on our end, the second coming of Jesus and how to prepare for eternal life in heaven. Jesus reminds us that faith and finances are inseparable, “where your treasure is, there also is your heart” (Matt 6:21). So, follow the scriptures and let them serve as your starting point in talking about financially supporting the mission of your organization.

How to Begin:

  • The first step is simple and significant. Include the following in all of your online and printed material: “Please remember us in your will and trusts. Contact the office for more information.” It works!
  • If you belong to a Catholic institution, contact the diocesan development office and ask what resources are available with regard to planned giving. If you are part of another religious institution or nonprofit, talk to your administrators or board of directors.
  • Invite the diocese development office to hold semi-annual virtual or in-person workshops to your members on wills and trusts. One of the biggest obstacles to planned giving is not that people don’t want to give but that they don’t know how.
  • Talk to your finance council, school board or board of directors about ways to cultivate a planned giving plan.
  • Cultivate relationships with longtime members of your organization.
  • Begin a legacy foundation, which recognizes and honors those who have made planned gifts to your organization.