Planned Giving from a Contrarians Point of View

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Planned Giving from a Contrarians Point of View ...

Planned Giving from a Contrarian’s Point of View

    by Fraser Green, CFRE

When it comes to planned giving as a fundraising tactic, I think many of us are going

    about it ass-backwards if we‟re going about it at all.

Over the years, I‟ve constantly encouraged our direct mail clients to get serious about

    planned giving, and to make the investment today that will generate rich rewards down

    the road. By and large, I‟ve failed.

Oh sure, everyone agrees that planned giving is important. But, few believe that it‟s

    urgent. This drives me nuts!

So, I‟m going to climb onto my soapbox and share my rant with you in the hope that it

    will shake up your current attitudes, perceptions and behaviours with respect to this

    critically important area of fund development.

I‟ve picked eight contrarian ideas that fly in the face of current planned giving

    conventional wisdom.

    1. Simplify!

Before you read any further, go and grab a copy of your current planned giving brochure.

    Do it now. I‟ll wait for you to come back.

I‟ll bet dollars to donuts that your brochure lists at least four ways that donors can make a

    planned gift. Life insurance. Gift annuities. Charitable remainder trusts. Gifts of

    securities. The list can go on almost indefinitely!

I‟ve got planned giving brochures from 14 name brand Canadian charities scattered all

    over my floor right now. Many of them describe eight or more means by which donors

    can make a planned gift. The options are dizzying.

Yet, more than 90% of all planned giving revenue comes from one simple source


Contrarian idea #1 simplify your planned giving marketing to focus on bequests only.

What are we trying to do with these brochures? Are we trying to make it easy for the

    donor to make a lifetime gift or are we trying to confuse her into inaction?

Let‟s take a moment to review some Communications 101. We as humans haven‟t

    evolved much since the time of Christ. Our brains are wired pretty much the same way

    our ancestors were in Biblical times.

Yet, information technology propels forward at a geometric rate. Put simply, we now

    have the ability to transmit endless messages but our ability to receive messages is very limited. You‟ll be exposed to some 3,000 marketing messages today. How many of them

    will „stick‟? Not many.

Your donor is overwhelmed too. She can‟t possibly digest all the information that‟s

    thrown her way each and every day. If you want to get through, keep it as simple as


In a survey of 500 Canadian direct mail donors conducted last March, we found that 99%

    of them already knew that they could leave a gift to a charity in their wills. I would argue

    that your challenge is to convince your donor that leaving a legacy gift to you would be

    an impactful humanitarian gesture.

Once you‟re in the donor‟s will, you can always go back for tea and banana bread and

    explain the other options in person. But get named in the will first. As the police detective always says in the movies, “follow the money”.

    2. Name it

We as fundraisers use the phrase planned giving as the label for the umbrella of

    fundraising tactics geared at getting gifts of assets. I have no objection to this term so

    long as we consider it jargon that we use with each other.

If you went out onto the street and asked 100 passers by what the term planned giving

    means, how many of them would give you the correct answer? So, why do we insist on

    using a term that ordinary people simply don‟t understand?

Contrarian idea #2 never use the words „planned giving‟ or „planned gifts‟ with donors.

I‟ve watched donors in several focus groups talk about this topic. They like the word

    legacy. It has positive connotations. It sounds important. They like the word „gift‟.

    They‟re okay with the word „bequest‟.

For my money, I‟d use the phrase legacy gift over planned gift any time.

By Fraser Green

    The FLA Group Inc.

    July 16, 2003

    3. Do Your Research

Prior to becoming a fundraiser, I spent 15 years as a political organizer and campaign

    manager. Before spending a lot of money on an election campaign, we would always do

    market research to enable us to understand who the voters are, what issues they care

    about most and how we could present ourselves in the most positive light.

When I „crossed over‟ to the charitable sector, I was blown away at how little market

    research we do. We make a lot of investments based on what we heard someone else was

    doing or what someone said at a conference last month.

    Contrarian idea #3 spend 10% of your planned giving budget on quality market research.

The poll we conducted in conjunction with Mal Warwick and Associates of Berkley

    California gave us some great insight into the legacy potential of typical direct mail

    donors. We now know that;

    ? almost three-quarters of direct mail donors are over 65 years of age

    ? more than one in three direct mail donors has already named at least one

    charity in their wills or intends to do so within five years

    ? the majority of donors surveyed say they‟ve never been asked for a legacy


    ? certain segments of the donor file (honorific Miss. and monthly donors for

    example) have greater potential to make legacy gifts.

Conducting this poll cost money. But, the information it yielded is worth its weight in


    4. Estimate your potential

    Here‟s an all-too typical scene. The Director of Development is pitching her Board to invest in planned giving. She‟s read the articles and been to the conferences. She really feels like her organization has to invest.

The Chair of the Finance Committee asks her “okay, you want us to hire a full-time

    planned giving officer. How much is he going to raise and when will we see the money?”

She‟s stuck. The discussion ends and they go back to planning the annual golf


What if she could have answered the question this way?

“That‟s a good question Jack. Here‟s how I see it. We currently have 20,000 active direct

    mail donors on our file. We know from polling data that a 7,000 of them have or will

By Fraser Green

    The FLA Group Inc.

    July 16, 2003

make at least one legacy gift. The average legacy gift is worth $20,000. Our typical direct thmail donor supports 14 charities. So, I figure that if we get 1/14 of 7,000 legacy gifts at

    $20,000 each our revenue potential is $10 million…

In fact Jack, our average direct mail donor has a net lifetime value to us of $166. Yet the

    per capita legacy potential from our average direct mail donor is $500.

…As for when we‟ll see the money, I‟ve done some estimates. Our average direct mail

    donor is a 70 year old woman. Based on life expectancy tables from Statistics Canada, I

    project that we‟ll receive the first million dollars within five years, we‟ll have $5 million

    in ten years and the whole $10 million in 19 years.”

Contrarian idea #4 project revenues and costs just like you do with your direct mail


    5. Be Smart & Be Brave

Most planned giving initiatives get shut down internally. As I‟ve outlined above, the

    Director of Development often fails to convince her CEO and Board of Directors to make

    a serious investment. Why is this? It‟s pretty simple..

The Board knows from experience that a $15,000 investment in the golf tournament will

    generate $45,000 in revenue. They know that the $10,000 investment in the gala will

    generate $35,000 in revenue. They know that spending $300,000 on the direct mail

    program will yield $900,000 in revenues.

Your challenge is to frame your planned giving proposal in these terms. In order to do

    that, you need certain information such as the age and gender of your donors and life

    expectancies based on age and gender. Go to the Statistics Canada web site and do some

    life expectancy research. Do some polling and get a handle on the age and gender of your


The three investment examples I‟ve listed above yield between 3 and 4 dollars revenue

    for every dollar invested within one year. Spending $500,000 to generate $10 million

    over twenty years has an ultimate payoff of $20 in revenue for every dollar spent. The

    efficiency is huge but the gratification isn‟t immediate. People need to learn to see

    beyond this fiscal year.

Then, do the best job of estimating your legacy revenue potential and the years over

    which it will be realized.

Contrarian idea #5 make it your personal challenge to champion the cause of serious

    legacy marketing and don‟t give up until you succeed.

By Fraser Green

    The FLA Group Inc.

    July 16, 2003

This is probably making you a bit uncomfortable and it should. We‟re talking about

    serious accountability here. We‟re talking about making commitments – and seeing them

    through. But isn‟t that the way every other kind of fundraising works? Why should

    planned giving be any different?

    6. Cast a broader net

Traditional planned giving theory talks about concentric circles. Start with your board.

    Move out to staff, major donors and out further still to your most committed volunteers.

    This approach involves building relationships with dozens of planned giving prospects.

    It‟s time consuming and sometimes awkward because we already know these people.

I think this approach is fine but it doesn‟t go nearly far enough. I‟ll illustrate.

A few weeks ago I met with a charity that currently has 225,000 active donors on its

    database. Using the revenue potential method outlined above, their potential legacy

    revenue is $112 million!

Contrarian idea #6 shift your planned giving thinking from dozens of prospects to


This organization has just hired an individual to do both planned and major gifts. He‟ll

    spend half his time marketing legacy gifts (I hope!). He‟s got one huge whack of direct

    mail donors most of whom probably won‟t be on this earth in 15 or 20 years.

The planned giving officer in question ain‟t gonna generate $112 million visiting donors

    and spending two hours at each house over tea and banana bread. He‟s going to have to

    come up with some other tactics to build donor loyalty to his cause and encourage the

    idea of legacy gifts across a very broad constituency.

    7. Crawl inside 75 year-old skin

I‟m in my forties and in a lot of ways I‟m a typical fundraiser. My dad‟s in his seventies

     and he‟s a typical donor. Our lives are very different.

     My days are nuts up at 5, check emails, flip through the Globe & Mail, turn on

    Newsworld, shower, walk, get my daughter Rory to school, work, drive home, make

    supper, work a bit more collapse.

My dad reads his paper cover to cover (he didn‟t grow up with television like I did). He‟s

    got all the time in the world. In fact, he often complains about being bored.

When I do marketing or communications seminars, I often tell the story of Jack and

    Eileen and Brock and Fraser. Jack was my mom. Eileen was her sister. In the last twenty

    years of their lives, they wrote handwritten letters to each other every week. Those letters

By Fraser Green

    The FLA Group Inc.

    July 16, 2003

were often six or ten pages long. My mom would usually spend a couple of hours on a


I‟m Jack‟s son. Brock is my cousin and great friend. I‟m in Ottawa. Brock‟s in Calgary.

    Brock and I stay in close touch too but it‟s different. We communicate by email two or

    three times a week. Our emails are rarely more than three or four sentences long.

Contrarian idea #7 skip the next planned giving seminar and go spend a few hours at a

    long term care facility.

Every marketer knows the critical importance of seeing the world through the customers‟

    eyes. Why should planned giving be any different? Our challenge is to see the world

    through old eyes, hear it through old ears and crawl inside old skin every now and then.

One simple and effective way to do this is to conduct a couple of focus groups with your

    older donors. This type of market research is a terrific way to test the strength of your

    brand, older donors‟ attitudes toward legacy giving and their opinions of your current

    planned giving materials.

    8. Inspire

Okay, this is the one that REALLY BUGS ME.

Go to a planned giving seminar or conference. Pick up some planned giving brochures

    from other charities. Look at the planned giving pages on web sites. More often than not,

    this stuff is dry as toast!

Why shouldn‟t your planned giving materials contain the very best writing you can create?

    After all, we‟re talking about a lot of money here!

“Writing is alchemy. Dross becomes gold. Experience transformed.”

    Andrea Dworkin

Contrarian idea #8 legacy prospects need inspiration to give not an instruction manual!

    Most planned giving programs seem to focus on how and that‟s the wrong question in my mind. The issue isn‟t how to make a planned gift – it‟s why the donor should leave a bequest to your charity.

My colleagues have heard me say a thousand times that planned giving materials should

    be written by poets and not tax accountants.

It‟s not about financial planning, tax treatment and planning. It‟s about the donor‟s heart

    and soul. It‟s about her making a lifetime gesture in the cause of humanity. It‟s about the

    very meaning of her life and the mark she‟ll leave on the world when she‟s gone.

By Fraser Green

    The FLA Group Inc.

    July 16, 2003

If you‟re a planned giving officer I beg this of you…keep a copy of Martin Luther King‟s

    „I Have a Dream‟ speech within reach at all times (I‟ve got a copy on my C drive and

    would be happy to email it to you just ask!). Read it at least once a month. Think of it when you‟re working on marketing materials.

Whenever I watch a clip of this speech on TV I get goosebumps (typical boomer I

    suppose). Here are just two paragraphs to put you in the mood…

     “The whirlwinds of revolt will continue to shake the foundations of our nation until the

    bright day of justice emerges. But there is something that I must say to my people who

    stand on the warm threshold which leads into the palace of justice. In the process of

    gaining our rightful place we must not be guilty of wrongful deeds. Let us not seek to

    satisfy our thirst for freedom by drinking from the cup of bitterness and hatred.

    We must forever conduct our struggle on the high plane of dignity and discipline. We

    must not allow our creative protest to degenerate into physical violence. Again and again

    we must rise to the majestic heights of meeting physical force with soul force. “

    Think of your planned giving program as music for the soul. Make it sing.

    The Opportunity and the Challenge

    In this contrarian‟s mind, there‟s a huge opportunity out there right now to retool or build

    a legacy marketing program that can really turn your donors‟ cranks. As your direct mail donors grow old and pass on, you have the opportunity now to speak to their souls and

    enable them to make the gift of a lifetime.

    Your challenge will be to convince others within your organization that this is a

    worthwhile investment which must be made now. I wrote this article to announce one

    simple truth as of today, planned giving has become urgent! The train is leaving the

    station. Are you on board?

    Fraser Green, CFRE, is a principal at The FLA Group a fundraising consulting agency

    specializing in direct mail, market research and legacy fundraising. Earlier this year, the

    FLA Group partnered with Hewitt & Johnston Consulting to create Legacy Innovation

    a research-based legacy marketing system.



By Fraser Green

    The FLA Group Inc.

    July 16, 2003

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