Skip to main content

Use planned giving to ensure long-term nonprofit sustainability

By February 22, 2022February 23rd, 2022Steier Tips

Most nonprofit organizations have a life span. The goal is to extend that life span and mission beyond immediate needs. This can be accomplished through strong yearly giving, productive capital campaigns and endowments. But those aren’t the only options. A focus on planned gifts can set an organization up for sustained success and a brighter future.

Bequests, planned gifts and estate gifts can be used to build up your endowment. They may also be donated as restricted funds (like buildings and maintenance, scholarships, operations or specific programs) or unrestricted funds to be used at the discretion of the organization’s leadership.

If your organization is worried about long-term nonprofit sustainability, investing in your planned giving program marks an important step.

How do we encourage planned gifts?

Sometimes, it is cliché or socially unacceptable to discuss our own mortality. Most donors may think about supporting an organization in the here and now, whether it is for a specific program or need. Planned giving is not always on a donor’s radar. So it is important for your organization to communicate the opportunity properly.

Developing a Legacy Giving Society and hosting information events conducted by a Certified Financial Planner or other specialist will help donors in this education process. It also allows the organization to recognize donors who are part of these Legacy Giving Societies. It is helpful for organizations to establish an endowment with funds from these legacy gifts and build the overall fund over time. Establishing an endowment for either unrestricted use or for a specific program are a great option and a great way to steward resources for long-term payouts from the funds earned by the corpus.

How do we educate donors about planned giving?

We have heard through the Gospel of Matthew (6:19), “Do not store up for yourselves treasures on earth.” From a financial perspective, tithing doesn’t necessarily need to stop upon death. Tithing and philanthropy can be part of a person’s legacy for an organization or church. So many times, people say, “my kids (or grandkids) will get my money when I die.” That is a very generous statement. But it is important to share the opportunity of planned giving.

You can educate your donors ask them to think about their legacy beyond their family. Why not leave your earthly treasures to your church and those who would be able to be provided for spiritually? “For where your treasure is, there also will your heart be.” (Matthew 6:21)

Why is planned giving more important than ever in 2022?

“The Great Wealth Transfer” is upon us. According to the Boston College Center on Wealth and Philanthropy, over the next 40 years, an estimated $59 trillion in wealth is expected to be passed along to heirs, charities and other entities. Nonprofit organizations who are not prioritizing planned giving as an integral part of their development efforts are losing out on an incredible opportunity and falling behind in the competition for those dollars.

Educate yourself on the benefits of planned giving so you can respond to donors’ questions. Don’t be afraid to talk about estate planning and the tax benefits that go along with it. You must be able to competently and confidently explain these avenues of support with your donors.

If you have any questions about planned giving or creating long-term sustainability for your nonprofit, please contact me.