Some fundraisers feel that scouting for planned giving prospects is a lot like the world’s most difficult game of Where’s Waldo. You know he’s on the page, somewhere, but for the life of you, you cannot find him. The flip side of that situation is, of course, once you find him, you cannot stop seeing him.
This post is here to help you find Waldo and then Waldo Jr. and Mrs. Waldo and Waldo III.
With prospect research, once you know the characteristics of whom you’re looking for — red and white striped sweater, matching beanie, glasses, blue jeans — you can set out on your mission to identify and solicit those potential planned givers.
Identifying a planned (or, deferred) giving prospect is not an exact science. There’s definitely a certain amount of finesse and intuition involved that comes from experience. However, most supporters who make deferred donations fall under a specific subset of characteristics.
To fully understand the prospects you’re looking for, it is important to first understand the three main types of planned gifts these supporters could make. Gift type will factor into the traits you’re scanning prospects for.
The three types of planned gift prospects are:
#1: Bequest Prospects
These are what you typically think of when you hear planned gifts mentioned. Bequests are allocated in the donors’ wills. They could be lump sums, estates, or a set percentage of the donor’s assets.
#2: Charitable Remainder Trust Prospects
A charitable remainder trust donation is made after the terms of the trust are complete. In these cases, a trust is established that pays a specified amount annually to set recipients over a fixed period (often times until death). Once the fixed period is complete, the remaining sum of the funds goes to the nonprofit.
#3: Charitable Gift Annuity Prospects
For these gifts, donors gift a large sum of funds to a nonprofit. The nonprofit then pays the donor a set income from that sum yearly until the donor passes away. When the donor is no longer alive, the remaining funds go to the nonprofit.
As you can probably tell, in order to fall into prospects two and three territories, the person would have to be wealthy. However, a donor does not have to be incredibly wealthy to make a bequest.
In fact, there’s a common misconception that planned givers are all inherently wealthy. As you’ll see when we break down the various traits of these prospects, that is definitely not always the case.
We place the identifying factors of planned givers into two buckets:
- Cause Connectors
- Statistical Inclinations
Bucket #1: Cause Connectors
By cause connectors, I’m referring to evidence of a connection to your organization. Legacy is a major concern for those leaving planned gifts, and donors want to have a legacy at an organization that they truly care about. You simply don’t make a major planned gift haphazardly.
Consider these four connectors:
(A) Frequent Donations
And the no-brainer award goes to…frequent donations. It is highly probable that a past donor will become a future donor. Loyal donors are planned giving candidates. How do you measure donor loyalty? Well, you see how frequently they donate and how long they have been doing so. For this point, the donation amount is not nearly as important as the act of donating is.
(B) Conviction in Your Mission
This goes hand-in-hand with frequent donations. Logically, if someone is consistently contributing, they support your mission. Even if someone hasn’t been a regular donor, there are other ways to demonstrate conviction in your mission, like volunteerism.
(C) Desire to Give a Larger Gift than is Currently Realistic
Point C puts the possibilities of points A and B in perspective. A supporter who has been a volunteer for years or gives small donations annually has a demonstrated desire to help your cause.
Many charitable people are not wealthy enough to be major gift donors, planned giving is almost a loophole to get around financial limitations. If your annual income isn’t such that you have the spare finances to make major gifts, you can put a bequest to your favorite charity in your will, and give your remaining funds when you no longer need them.
(D) Positively Affected by Your Organization’s Work
A candidate in this category could be a recipient of your services, like a grateful patient. Basically, this comes down to someone who has tangibly experienced the potency of your mission. The best method of acquiring these types of prospects is to continue the good work of your organization.
Bucket #2: Statistical Inclinations
Statistical inclinations is really just a fancy way of classifying the defining personal characteristics that increase the likelihood of a planned gift.
There are five statistical inclinations:
(A) Older in Age
Donors who are older are more likely to be making end-of-life plans. They’re more likely to have a will in place. Consider researching prospects ages 60 and up.
(B) Single or Widowed
Even for the most dedicated of donors, family comes first. A prospect who is single will have more flexibility in whom he or she donates to after death.
(C) No Children
This is similar to the above point. People tend to allocate their assets to their spouses and children.
(D) Appreciated Property
These are your standard wealth markers, like stock and real estate ownership. On average, your biggest planned gifts are going to come from your wealthiest supporters. You’ll need to identify who they are, if you haven’t already.
Do what you will with this last point. Studies suggest females are more likely to leave planned gifts than males. It’s a thought to consider, but certainly not to live by.
The crazy thing about planned gifts is that often times, they’re just a pleasant surprise. Donors can make bequest intentions, but they don’t have to tell you they’ve added your organization to their wills.
Obviously, if a prospect decides to establish a charitable remainder trust or charitable gift annuity, you’ll know. You’ll have to know. Bequests can remain a mystery though.
Just because planned gifts can be surprises and donors aren’t obligated to inform you of their plans, doesn’t mean that they should be deemed bonus funds.
The word bonus implies a lack of effort. Planned gifts should be sought after. It may take a while to see the results, but your organization will discover a genuine up-tick in planned gifts if you begin promoting them.
Now that you know the candidates you’re looking for, perform a prospect screening to find them. You’ll start seeing Waldo everywhere.