DonorSearch’s blog is dedicated to covering prospect research and different types of fundraising strategies, yet our readers and customers often ask about the difference between planned giving and bequests. So we reached out to Tom Ahern at Ahern Donor Communications to help alleviate the confusion.
“Pork. The Other White Meat.” was an advertising slogan introduced by advertising agency Bozell, Jacobs, Kenyon & Eckhardt in 1987 for America’s National Pork Board.
Brilliant and effective, pork sales in the US rose 20% in just a few years.
It got me thinking: in philanthropy, we have a somewhat similar situation. We have “major donors” … and then we have the “other major donors.”
Might it be possible to gain a 20% rise in charitable income thanks to some repackaging?
Here’s my thinking….
Conventionally, we think of “major” donors as those well-heeled prospects who have the capacity to make a large gift NOW. They deserve our applause. And they get it. Face to face. Frequently.
But are there other major donors hiding right under our noses?
Absolutely. And in abundance.
Bequests: Major gifts “for the rest of us”
The charitable bequest is the “other” form of major gift. But you don’t find it at the top of the giving pyramid. You find it amongst the masses, according to researchers like the UK’s Richard Radcliffe.
Please note: Most charitable bequests originate from middle-class households … not from the aristocrats who occupy Downton Abbey, but from the generous hearts of the normal people who watch Downton Abbey.
For those middle-class households, a bequest will typically be the largest single gift ever made. Lawyer and radio host Tony Martignetti, writing for GuideStar, says that the average US charitable bequest is worth $32,000. In Australia, says Pareto, the average 2011 bequest to charity equaled $54,453. In the UK, says Mr. Radcliffe, the typical charitable bequest is worth about €200,000.
“OK, I’ll take that!” I hope you’re shouting. “That’s quite a pretty penny.”
Oddly, American fundraisers seem quite bad at bequest marketing
In America, bequest giving is stuck.
Bequests represented just 8% of the annual contributions to charity in 2011, according to Giving USA 2012.
It’s 8% now.
It was 8% a decade ago.
And it was 8% two decades before that, if memory serves.
For all the money and time presumably spent on promoting charitable bequests in America, our fundraisers seem unable to move the needle overall. Really, you just want to reach out and tap the gauge to see if it’s still working.
In the UK and Australia, on the other hand, bequest giving annually hovers between 20-30% of the total haul.
I find their successes, and America’s persistent failure, a tantalizing challenge.
I wonder: Is the problem in the US a packaging problem?
Do we need to re-conceive what charitable bequests are? Do we need something like “the other white meat”? Are fundraisers just seeing bequests the wrong way?
“Would the person who thought up ‘Planned Giving’ please report to the principal’s office?”
Fundraisers commonly lump bequests in with things like Charitable Remainder Annuity Trusts (CRATs) and Charitable Remainder Unitrusts (CRUTs) under the inscrutable label “planned giving” … even though bequests are said to be, in fact, 90% of all “planned gifts.”
You have to wonder who comes up with this stuff.
Is there some diabolical, mischievous Committee Devoted to the Utter Obfuscation of Otherwise Incredibly Simple Things? (Answer: yes.)
Where’s the sense, though, in classifying a middle-class product like charitable bequests in with a bunch of products (CRATs and CRUTs) that appeal mostly to people so wealthy they need financial planners?
Those are two distinct target audiences.
Which means the sacred “laws of segmentation” kick in. And those laws dictate that you should market bequests separately from other “planned giving” products, because the core audience for bequests is different than the core audience for CRATs and CRUTs.
Yet we market them all together in the US … and we get 8% of our annual charitable income from bequests vs. the 20-30% realized in the UK and Australia.
About the Author: Tom Ahern is one of the top authorities on how to drive nonprofit revenue through effective donor communication and leads Ahern Donor Communications.
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