identifying your best planned giving prospects: it helps to know where to look lawrence c. henze,...

Identifying Your Best Planned Giving Prospects:It Helps To Know Where to Look

Lawrence C. Henze, J.D.Managing DirectorTarget Analytics

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Your Presenter

Managing Director, Target Analytics Law degree, University of Wisconsin-Madison 13 years as a development officer

– Chief Development Officer, Dir. of Planned Giving

15 years as a nonprofit marketing/predictive modeling consultant– Econometrics (co-founder)– Noel Levitz– Core Data (founder)– Target Analytics (formerly Blackbaud Analytics)


Our Agenda

Planned Giving as part of the giving process Donor Development and Planned Giving Myths Planned Giving profiles A brief look at planned giving marketing


Planned Giving as Part of the Development Process Eliminating the Silo Approach


Planned Giving as Part of the Development Process

Life on the farm– Think “free range”, not pens or silos

Ultimate giving is both a journey and a destination

Making the journey borderless encourages donor development


Eliminating the Silo Approach

Do you have an integrated plan? Have you investigated opportunities for using

communication and donor relations efforts for multiple purposes?

Do you reward team efforts? Do you encourage “out-of-the-box” thinking?


Success: The Peaceful, Integrated Fundraising Farm


Remember…

Perception is reality– Planned giving is a major gift

Donor-centered is not a staff interpretation– Get acquainted with your donors

“We have always done it this way” is not necessarily a statement of strength

A Little Bit of Knowledge

What you know about planned giving prospects will increase your marketing effectiveness


The Donor PyramidLoyal Donors and

Ultimate Giving


Donor Profiling

High likelihood and high-level gift potential

Major and capital giving prospects

Planned giving potential is secondary but viable

Lower likelihood but high-level gift potential

Need to be sold on your mission

Longer term cultivation Second-tier solicitation

strategy

High likelihood and low to mid-level giving potential

Annual giving upgrade Consistent annual giving Planned giving as a

primary strategy

Low likelihood and low-level gift potential

Minimize investment Consider reduced

resource application


Ultimate Giving

Every individual has an “ultimate gift” Ultimate gifts may be any level, any type

(including $0) Find ultimate giving profiles, develop

appropriate marketing strategies, close more gifts!

Ultimate gift a better term than planned or major gift?

Still true after all these years: most bequest and annuity prospects will never consider a major outright gift


The Relationships Between Donor Types

Is annual giving the basis of:– Major giving success?– Capital campaign success?– Planned giving success?

Therefore, do we underestimate the value of the $20 annual donor?– Do we over-solicit these individuals?– Do we recognize their loyalty?


What We Know About Donor Types

Within an organization:– Annual and major profiles differ– Major and planned giving profiles differ

Among all nonprofits– Annual and major giving profiles vary

• Type, location, solicitation style– However, planned giving profiles are very

consistent• Lifestyle behavior• Use this consistency to your advantage

Planned Giving Profiles

Do-it-yourself Options


What Are My Options?

Do It Yourself– Data mining– In-house modeling

Prospect Screening/Vendor Options– Generic Modeling– Wealth Identification– Custom Modeling


Types of Data

Types of Institutional Data– Demographic– Giving History– Activities/Relationships– Transactional– Attitudinal– Interests


Whetting Your Appetite

Study the relationship between giving longevity and ultimate giving

Alternatively, the relationship between giving levels and ultimate major giving behavior


Satisfy the Craving for Knowledge

Create a file of major donors using number of years giving (prior to first major gift)– 20 donors, range from 2 to 18 years

Plot data using Excel Study AND interpret the trends


Major Giving Analysis

Years Given Prior to MG

024

68

101214

161820

1 3 5 7 9 11 13 15 17 19

Years Given Prior toMG


What Did We Learn?

Findings– For example, major donors make an average of

9 annual gifts prior to reaching major donor status (also check mode or median)

– Establish a threshold, such as 6 annual gifts, to identify potential MG prospects

– Also study planned giving behavior and its correlation with loyal annual giving


What Did We Learn?

Conclusion: A significant number of major donors exhibit “trigger point” behavior

You are “growing your own” major donors When donors activate these trigger points, they

appear on your major donor radar screen This is proactive data mining


What Did We Learn?

And what do we do with this information? Assume the following:

– A major gift equals $5,000+– For 60% of the file of major donors, their last

gift before $5,000+ was $2,000– For 70% of those individuals, their last gift

before $2,000 was $500


Beginning Level

Time-of-Year Giving– Create a pool of all donors over the past 10

years– Create a subset of donors giving in at least 6 of

the 10 years– Plot the months/quarters of their gifts– Identify the habitual donors

Why is This Important?– Ultimate giving– Cost savings


Beginning Level – Age Analysis


Age and Planned Giving

Planned Giving Profiles

Using History to Ensure Your Future


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


Planned Giving Propensity


Planned Giving by Gift Type

Each “type” has different traits– Annuities– Charitable remainder trusts– Bequests

The two faces of bequests


Variables and Planned Gift Types?

Age? Wealth? Credit Usage? Past Giving Behavior? Type of Organization? Relationship to Organization? Marital Status? Volunteering and other loyalty measures?


Summary and Questions

Contact me:Lawrence [email protected]

White Papers: http://www.blackbaud.com/resources/white-papers.aspx

identifying your best planned giving prospects: it helps to know where to look lawrence c. henze,...

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