how the right marketing strategies can enhance your planned giving program part 1: how to identify...

How the Right Marketing Strategies Can Enhance Your Planned Giving Program

Part 1: How to Identify Planned Giving Prospects

Part 2: How the Right Marketing Strategies Can Enhance Your Planned Giving Program

Lawrence Henze, J.D.

Managing Director

September 11, 2008

Lawrence C. Henze, J.D. | Page #2© 2008 Blackbaud

Finding and Marketing to Planned Giving Prospects

This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author.

Our Agenda

Planned giving in recessionary times Planned giving review

– Planned gift types– Donor development and planned giving myths– Planned giving profiles

Planned giving marketing– Ideas that work

Summary


Planned Giving in Recessionary Times

Now Is Not the Time to Stop Your Efforts




Recession? Stagflation?

Or is it “troubling times” or “a lot of uncertainty”?

Regardless, difficult economic times affect fundraising

How does a recession affect planned giving?




Recession and Planned Giving

February 7 edition of The Chronicle of Philanthropy– Several articles on this and related topics

Basically two points of view:– Contract marketing efforts and avoid long-range gift maturity dates,

or– Planned giving, particularly bequests, fit in conservative economic

times




My Thoughts on a Recession and Planned Giving

No, I do not like recessions

But I like planned giving opportunities, particularly bequests and annuities, during these times

Do not forego future opportunities for current savings – 2007 study reports that 50% of bequests are first inked between

the ages of 40-60

Act intelligently based on strong market research, that is the best way to become cost effectiveness


Planned Giving Overview

What Is Planned Giving and Who Are Your Prospects?




Page #8© 2006 Blackbaud

What is Planned Giving? A planning process that considers the effects of a gift to charity

and the donor's estate (technical) A giving process that honors the donor’s desire to do something

special and to give back (emotional) Most common (or popular) types of planned gifts

– Bequest– Charitable Gift Annuity– Charitable Remainder Trust– Charitable Lead Trust– Donor Advised Fund– Private Foundations– Life Insurance– Life Estate– Pooled Income Fund





Planned Giving – Ways to Give

Bequest – A provision in your will to pass money to a charitable organization upon your death or the death of a spouse. Typical clauses include an outright amount, a percentage of the assets, or the residual of the estate.

Charitable Gift Annuity – You give money to a charity, which promises to pay you a fixed amount regularly for life. Although part of the annuity payments are taxable, you’ll also receive an upfront income tax deduction for the amount estimated to end up with the charity






Charitable Remainder Trust (CRT) – an irrevocable trust pays a specified annual amount to 1 or more people for a fixed period of years, or for the life of an individual(s). At end of the term, remaining trust property is distributed to charity.– CRAT: fixed annuity– CRUT: fixed percentage of trust value (varies annually)

Charitable Lead Trust – Essentially the reverse of a charitable remainder trust. You transfer assets to a trust and a charity receives a payment stream. And the end of the trust’s term, what’s left goes to heirs.






Donor-Advised Fund – You give a lump sum to a charitable fund and get an immediate tax deduction. The fund legally controls the money, but the donor recommends how it is distributed and to which charities.

Private Foundation – You set up a charitable entity, with funds that usually come from your family, rather than the public. It makes grants to support a charitable mission. You’ll have a lot of control over the foundation’s decisions, but private foundations can be expensive to run and have less favorable tax rules than public charities.






Life Estate – The donor gives her house or farm to the charity and retains the right to live there through the remainder of her life. An immediate income tax deduction is available to the donor. Charity may sell property upon donor’s death.

Pooled Income Fund – donors contribute to a fund, proceeds are shared based on percentage of contributions. Operates like a mutual fund. Appreciated property contributions benefit from capital gains protection. When income beneficiaries die, their shares transfer to the charity.


A Little Bit of Knowledge

What You Know About Planned Giving Prospects Will Increase Your Marketing Effectiveness




Steps in the Donor PyramidPlanned Giving is at the top

of the pyramid, but is not

necessarily a last gift




Ultimate Giving

Every individual has an “ultimate gift” Ultimate gifts may be any level, any type (including $0) Ultimate giving does not place a higher value on “major”

gifts Find ultimate giving profiles, develop appropriate

marketing strategies, close more gifts! Most major donors are also planned giving prospects, not

true in reverse!




Donor Profiling

Highest scores and high assets

Further qualification and research

Immediate individual cultivation

Lower likelihood scores, but high target giving ranges and assets

Need to be sold on your mission

Longer term cultivation

High likelihood scores and mid-level target giving ranges

Implement targeted upgrade, mid-level major gift strategies

Increase annual giving

Low likelihood scores and low target giving ranges

Minimize investment Consider reduced

resource application




Planned Giving Facts

Bequests constitute almost 90% of all planned gifts made– More than 80% of these are unknown at present

Annuities constitute another 5-6% of all planned gifts

You can have a successful planned giving program without focusing on trusts (the complicated stuff!)





You may have more dollar potential in planned giving than major giving

Why people give (NCPG survey)– 97% say they care about the charity– 87% desire to do something special– 35% tax planning– 22% know charity’s representative




We often consider planned giving to be a second-tier strategy

Extremely passive solicitation methods

Appeals are broad based and require request for more information

Expectations are unreasonably low– 1% response rate to planned giving mailings





Age and Planned Giving




Planned Giving Propensity




Planned Giving by Gift Type

Bequests:– Two primary age groups: late 40s to late 50s, and 65-78.– Loyal donors, lower amounts– Comfortable with debt– Mid-to-upper middle income– Tend to live in one home for longer times– Children in college or have education-related debt– Charitably inclined– Volunteers




(Traditional) Charitable Gift Annuities:– Ages: mid-70s and older– Retired– Fiscally conservative– Uncomfortable with debt– Not wealthy (or do not think they are)– Are or were loyal donors, usually very low amounts– Charitably inclined– Worried about outliving their resources– Frequently single (widowed females





Charitable Remainder Trusts:– Ages: mid-50s to 70– Fiscally savvy and often aggressive investors– Very comfortable with debt– Wealthy or very affluent– Less likely to be loyal donors, but average gifts are high– Charitably inclined, often are major donors as well– Likely to have retained financial counsel





Personal follow up and cultivation, note overlap with other PG types and annual/major potential as well

More specific direct marketing, segmenting by gift type

Send appropriate marketing material for general “seed planting”

Bequest Annuity CRT

Excellent Likelihood 927 413 236

Very Good Likelihood 2,513 1,134 384

Good Likelihood 3,436 2,185 858

Segmentation and Cultivation…

…of Planned Giving Prospects




Profile Summary

Strong correlation with annual giving loyalty and planned giving

Do not let giving amount control decision to solicit for planned gifts

Do not let cash rule the day


Planned Giving Marketing

Let Common Sense Prevail




Planned Giving Marketing – Basic Axioms

Certain types of planned gifts are more “marketable” than others– Annuities– Bequests

Highly technical gifts very difficult to market

Just starting? Small staff?– Bequests and annuities, or just bequests, will be enough




Simple Ideas Everyone Can Use

Many new marketing initiatives will have little budgetary impact

Better targeting, reduced mailings, and comprehensive and integrated communications are within your reach!

Avoid falling into the trap of duplicating the efforts of others without evidence that it works!

Thinking outside of the box:– The limitations of “we have always done it this way”




Making the Case for Planned Gifts

85% of respondents to a national survey said that they found out about charitable gift annuities through one of several informational channels initiated by the organization including:– written materials, – a visit with a representative, and – financial seminars




Business Card Marketing





We know you use your cards to “win” free lunches

They make great bookmarks

The back is great for shopping lists, and

The back is great for estate planning information!!!




I give ($) (%) of my estate to the Lost in Space Foundation, P.O. Box 1727,

Lafayette, CA 94549 to provide funding for the ongoing activities of the Foundation

as determined by the board of trustees (or for the purpose of _________________)

Tax ID 00-0000000





Annual Reports and Newsletters

Probably numerous organizational publications that may be used to promote planned giving

Donor recognition– Loyalty giving clubs

Donor stories and testimonials important– Do not forget that smaller gifts are important– Not just the mega-gifts!

Do not try to accomplish too much with each publication– Coherent simplicity

Consider different versions by audience type– Targeted issues will boost interest and response




Donor Stories

We know you have to use the mega-gift stories

However, these stories are “relative” to only a small number of prospects

Find the stories in which your donors are thrilled to do something special, and happy that a planned gift made it possible

Appeal to their highest calling, move their hearts




Advertising and Newsletters

• In the RPF tri-annual Members-only newsletter, The Key and in Regional in Nature, a bi-monthly newspaper insert guide to Regional Parks




More on Cultivating Loyalty

Loyal donors give at least 60% of the time

Often exhibit habitual giving patterns

Habitual giving offers opportunity to reduce solicitations and create more donor-centered environment– Anniversary date giving

Look at all types of loyalty:– Volunteerism– Membership– Ticket buying




More on Cultivating Loyalty

Survey loyal donors to determine their interests, wants– Why do they give?– Which programs do they like the most?– What would they like to change about their relationship

with your organization?– Act upon the information

Also survey other individuals on your database to determine their interests and feelings




Direct Mail and Messaging

Remember importance of annual giving to planned giving success– Multiple opportunities to spread the word

Set sights on higher response rate by employing a better targeting method– 1% unreasonably low

Direct mail is passive by nature– Plan follow-up for highly-rated prospects– Asking is not the sole purpose




Messaging

Creating interest and appeal Making that interest and appeal personal A clear, easy-to-understand message Keeping it simple

– Remember, most attorneys are unable to explain the difference between giving instruments

Few words Tell stories, capture hearts




Messaging

Eliminate technical language:– CRUT – is it a unitrust or a terrible skin disease?– CRAT – is it an annuity trust or litter box residue?– NIMCRUT – is it a net income with makeup charitable

remainder unitrust or the current trendy term for numbskull?




Messaging

Discuss one subject at a time

Don’t provide a marketing menu

Disclaimers– Yes – We recommend that you consult with an attorney

or financial planner prior to finalizing your gift plans– Our research indicates that most individuals who give

bequests or annuities outlive actuarial lifetime projections by 12-13 years!

– Yes, it is true, but this is not a smart marketing approach!




How to Write a Direct-Marketing Piece

Pick one subject

List all the attributes of that gift

Divide into two groups:– Motivators– Details

Pick the motivators for your marketing piece

Details do not work well for marketing




Motivators and Details - Bequests Deeply care for your mission Want to leave a legacy No current financial impact May designate use of gift Revocable, maintain control of assets Reciprocal benefits May designate amount, percentage, or residual Simple to do Opportunity to make a significant gift Private Create it and forget it




You Choose the Motivators

Deeply care for your mission Want to leave a legacy No current financial impact May designate use of gift Revocable, maintain control of assets Reciprocal benefits May designate amount, percentage, or residual Simple to do Opportunity to make a significant gift Private Create it and forget it




Ideas That Work

Give substance and meaning to planned giving– Reciprocal giving– Generational giving– Annual gift endowment




Ideas That Work

Sell big, write small– Use few words to market a big concept– In marketing materials, it is the giving concept, and not

its technical operation, that will promote interest




Use website to share information

Provide calculation tools

Testimonials

Use email to drive prospects to website, invite to seminars, thank

Email and the internet may be very effective with the younger bequest prospects

Internet and Email




Seminars

Invite prospects who benefit from the information

Remain a valuable marketing tool

Focus on a few key items

Donor participation




Employing a Marketing Consultant

What are you able to do?– Important to look like your organization

Question everything– Set your own goals

Less can be more

Concentrate on the big picture– Integration of all fundraising messages




Organizational Publications & Stand Alones




The Best for Last – Personal Cultivation

See “How To Talk with Donors about Planned Gifts”, a new white paper by my colleague, Katherine Swank, J.D.

Free time to cultivate relationships– Evaluate time management– Prioritize– Manage these priorities


So You Think You Are Ready to Market More Effectively?

Checklist




Checklist

Integrated campaign? Investigated all communication streams? Planned giving is a Tier 1 emphasis? Know your planned giving prospects?

– By type of giving vehicle?

Donor relations recognizes loyalty? Staff is aware of planned giving? Marketing materials emphasize emotion and commitment

and mission? Volunteer expertise arranged?




Danger Will Robinson!!!!!!




Avoid Becoming “Lost in Space”

Planned giving marketing success requires PATIENCE! Encourage interaction with donors Take the time to do this right and good results will follow Planned giving is not a quick cure! If you are just starting a program, prepare key players for a

long-term commitment Set expectations accordingly!




Motivate the Reader to Respond

Give a reason to notify:“If you have made an estate provision for the Gardens, or a planned or deferred gift, please let us know so we can welcome you into the Perennial Friends Society and make sure your gift intentions are properly carried out.”




Planned Giving Marketing Success

Prospect identification is the science

Relationship building is the art

Marketing is the practice

Patience is more than a virtue, it is a necessity




Summary and Questions Contact me:

Lawrence [email protected] 843-991-9921

New Book: Building a Planned Giving Program from the Ground Up http://www.blackbaud.com/bb/desktopreference/boostgiving.aspx

White Papers: http://www.blackbaud.com/company/resources/whitepapers/whitepapers.aspx

Check out: www.leavealegacy.org

how the right marketing strategies can enhance your planned giving program part 1: how to identify...

Documents

planned giving prospects

right marketing strategies

marketing ideas

proprietary information

expressed permission

contract marketing efforts

summary slide

recessionary times