Why Most Planned Giving Programs Fall Short
By Ken Ramsay, President and Managing Partner,
Legacy Leaders Inc.
To ask the question, „Why do most Planned Giving programs fall short?‟ is to question
the whole approach to Planned Giving in North America. Careful analysis of available
research has shown that there is a mismatch between market potential and characteristics
and the tradition marketing approach taken by charitable and not-for-profit organizations.
The market is huge and predisposed to make a Planned Gift commitment. Our approach
has been narrow and requires individuals to self-identify. Charities leave much on the
Planned Giving has not had the kind of success one would expect, given the potential
available. This paper proposes a new marketing model that is simple to initiate, inclusive in its targeting and proactive in nature, and one that will have dramatic results for any
size charity. Recent advances in successful broad-based marketing techniques have demonstrated the realizable results available to all charities. A complete description of
both the new marketing model and a successful mail/phone marketing technique are
outlined along with actual results! There is also happening the evolution of the Planned
Giving Campaign with many of the same characteristics of the traditional Capital/Major
The time is right for the Planned Giving industry to make a radical shift in the way it
operates. All the tools are available to expand dramatically, to be much more accountable
for our measured productivity and to work to impressive ROI standards – all features historically absent from Planned Giving programs. The time is right for Planned Giving
practitioners and senior fundraising professionals to seriously ask the question. „Why do
Planned Giving programs fall short?‟ and be willing to take a fresh look at the marketing
of Planned Giving.
It is timely to rethink how we do Planned Giving. This paper will challenge our long held
assumptions on Planned Giving and present new approaches that are proving extremely
productive in the marketplace.
Why Most Planned Giving Programs Fall Short
By Ken Ramsay, President and Managing Partner,
Legacy Leaders Inc.
1A 1995 Survey of charities in Canada by the Canadian Centre for Philanthropy and the Canada West Foundation reported that 19% of non-religious charities had some
form of Planned Giving program. The Canadian Association of Gift Planners, launched in
1992, now has over 800 members interested in developing their careers in the Planned
Giving industry. The basic course, Planned Giving for Canadian Fundraising
Professionals, staged at the Banff Centre for Management, has graduated over 600
individuals. All of these facts are impressive and yet, if one casts a critical eye at Planned
Giving in Canada, the results are somewhat disappointing. Even more dramatic growth
has been witnessed in the United States over the last twenty years.
In response to the question, “How many successful Planned Giving programs are
there in Canada?” - twenty to fifty is the typical response. Why? This paper will discuss the potential of Planned Giving for Canadian charities and the numbers are staggering!
Why then do so many programs fall short? We must assess the Planned Giving market
with an objective view and re-evaluate the typical Planned Giving Marketing model.
There are also new marketing initiatives in Canada that have yielded surprising results.
What do they tell us about the possibility of a very different Planned Giving model – one
that has considerable implications on fundraising in North America?
There is a concerted trend in the charitable sector to provide more accountability
for the resources expended on fund raising. Planned Giving has always been somewhat
exempt from hard accountability. The „deferred‟ aspect of a Planned Gift makes it hard to
measure and practitioners have not had to be as accountable as other fundraisers. This
habit will need to change for charities to invest the resources necessary to attain their
potential in Planned Gifts. We need to construct operational models that provide hard
measurements and productivity standards. Ultimately, Planned Giving programs not only
must consistently produce at higher levels but also survive the scrutiny of ROI (return on
investment) measurements. This paper will offer a marketing model that provides
program measurement, productivity standards and ROI calculation.
It is timely to rethink how we do Planned Giving in Canadian charities. This
paper will challenge our long held assumptions on Planned Giving and present new
approaches that are proving extremely productive in the marketplace.
What Do We Know About the Market?
To begin the market reassessment, attention should be turned to available market
research on Planned Giving in North America. What do we know about this market?
1 2 Canadian Centre for Philanthropy, Charitable Fundraising in Canada, (Toronto, Canada, 1996).
2 This research of 5000 adult Canadians (over age 18) posed three questions that had profound 3implications for Planned Giving in Canada. The results of these questions were:
In 1987 there was a pivotal piece of research on philanthropy in Canada.? “Have you made a will or thought about making a will or have you not given it too
Made a will ………………………………………………….44%
Thought about it …………………………………………….28%
Not thought about it …………………………………………28% ? If made a will, “Have you left any money to a charity or non-profit organization in
No Opinion …………………………………………………….0% ? If “Thought about it” to first question or answered “No” to the second question,
“Would you ever consider leaving money in your will to a charity or non-profit
No Opinion ……………………………………………………..0% The composite response was that 7% of all adult Canadians have included a charity in
their wills and a further 27% would consider. Decima Research interpretators made this
comment “… the data indicates that the area of wills is potentially a very fruitful one for
charitable and non-profit organizations to explore.”
Furthermore, the Decima Research of the Study of Philanthropy in Canada,
discovered that those that had included a charity in their wills tended to be slightly better
educated but not necessarily more affluent. Also they tended to live in a larger city and
not be residents of Quebec or Atlantic Canada. Those that would consider a bequest in
their wills came from a wide range of social backgrounds and geographic locales.
Younger, university educated and having given more to charities, were also factors.
This research set the benchmark for bequest potential in Canada. 34% of all adult
Canadians either have or would include a charity in their wills. Charities could look at
their support base and apply this 34% bequest potential. Because the average bequest is
$10,000 to $20,000 (from a survey of 14 charities in Canada, conducted by World
Wildlife Fund, 1991) or because most charities have already established substantial long
term bequest averages, the Planned Gift potential can easily be calculated. For example, a
hospital with 30,000 supporters and a $35,000 bequest average, could calculate a bequest
potential of (34% x 30,000 x $35,000) = $357,000,000 from current supporters. Even an
arts group of 5000 patrons with an average bequest value of $15,000, would have a
bequest potential of (34% x 5,000 x $15,000) = $25,500,000. Bequests tend to be 90% to
2 Canadian Centre for Philanthropy, Study of Philanthropy in Canada, (Toronto, Canada, 1988). 3 IBID, pp. 174-175. 4 IBID, p. 41.
5 and 95% of Planned Gifts in Canada and so bequest potential defines most of the Planned 61994 that investigated various aspects of Planned Giving. Each surveyed 5000 members Giving potential. and had a statistical reliability of plus or minus (+or-) 3%, 19 times out of 20. The United Church of Canada has 700,000 members across Canada and represents a good cross The United Church of Canada did two independent research studies in 1993section of English speaking Canadians. A question repeated in both research projects was
“Would you consider a Planned Gift of …” (each was described to respondents and
multiples were allowed). The results were:
Bequest Charitable Gift Annuity Life Insurance Charitable Remainder
Survey #1 40% 16% 10% 10%
Survey #2 41% 15% 11% N/A
In Survey #2, responses were also cross-tabulated by type of member. Church leadership
(volunteers in leadership positions and staff) responded with Planned Gift intentions of
close to double that of the membership as a whole.
All of the research results described above lead to some very important
conclusions. Willingness to consider making planned gift commitments is widespread in
the Canadian population. Furthermore, volunteers and those closest to the organization
are even more likely to make a gift from their assets. There is tremendous potential for all
types of Planned Gifts, for Canadian charities.
In 1992 the National Committee on Planned Giving (NCPG) in the United States,
randomly surveyed7 150,000 Americans and followed up with a detailed questionnaire to
those that had made a Planned Gift. Some notable findings were:
? 5.71% of Americans had included a Planned Gift to a charity
? As many under the age of 60 had made a bequest commitment as above (Note:
similar results were recorded in the United Church survey)
? 75% of bequest donors had never informed the charity of their intentions
? 64% of bequest intentions were less than five years old
? 37% of bequest donors benefited more than one charity
? 92% of bequest donors had never changed the bequest provision once it was in the
? motivations for making a bequest were (multiples allowed):
- desire to support the charity 95%
- ultimate use by charity 75%
- creation of a lasting memorable 28%
5 United Church of Canada, Special Gifts Study, (Toronto, Canada, 1993). 6 United Church of Canada, Department of Stewardship Services, Unitrends, (Toronto, Canada, 1994). 7 NCPG, NCPG Planned Giving Research, (Indiana, U.S.A., 1994).
This important piece of research gave us insight into bequest donors. Charities should be
attentive to younger donors and dialogue meaningfully with them. Bequest donors update
their wills frequently but once the bequest is in the will, it likely will stay in. Charities
should recognize that one third of all donors benefit more than one charity in their wills
and should give extra attention to all known bequest donors. However, because most
bequest intentions are not known to charities, they should devise strategies to uncover
them. Finally, the case for support for Planned Gifts must be built on the strong
motivations of desiring to support the cause and wanting something specific to happen
with the Planned Gift.
The NCPG research again confirmed the wider marketing audience and gave
insight into Planned Gift motivation. Tax planning motivation - always seen as
paramount with a Planned Gift – scored relatively low as a motivational factor. Also, the bequest goal was clearly understood to be to get the bequest in the will where it will
This cursory review of known market research describes a different potential
market than perhaps was first assumed – a broad market, a diverse market, a responsive market for all those who value a particular charitable cause. Does the traditional Planned
Giving Marketing model fit this market?
Traditional Planned Giving Marketing Model
We have learned and taught a particular Planned Giving marketing model. It
requires a charitable organization to communicate to its supporters and affiliates with an
offer, to begin a Planned Giving dialogue. This general offer can take various forms, such
? a response mechanism to “get more information”
? a response mechanism to signal “interest in making a Planned Gift”
? an opportunity to learn about “Estate Planning” through print or seminars in
which Planned Giving is used as an example
? an opportunity to get professional advice on “tax planning”
? information on Planned Giving recognition, etc.
This reactive marketing communication model will typically enjoy response rates in the
0.1% to 1.0% range. Then, these respondents move into a long range cultivation program
that educates them on Planned Giving options, motivates them by presenting testimonials
and recognition benefits and builds relationship with notably, the Planned Giving officer,
and in turn, the charitable organization, through a deliberate contact program. Of this
respondent group, 25% to 50% will eventually make a Planned Gift commitment over
These Planned Gifts tend to be larger than those received „out of the blue‟ (almost always bequests) and sometimes, quite complex. The Planned Giving officer gets to
display his or her knowledge of the subject by analyzing the donors circumstances and
philanthropic goals and proposing the most appropriate Planned Giving option, often
working with the donor‟s advisors. This is the typical marketing model.
There are some exceptions to this model. Some charities successfully „product
market‟ individual gift options especially life income gifts such as charitable gift
annuities and charitable remainder trusts. These communication programs work best
when the dual benefit is explained to prospective donors – a gift to the organization they care about and an opportunity for tax beneficial lifetime income at the same time. The 8 by product marketing them to their communicated offer usually has the incentive to get a “quotation” on the amount of
membership. “income” or “taxable benefit” that the donor will receive. Response and conversion rates
are the same as the general offer above. Some religious organizations have built the
However, the overall limitations of the traditional Planned Giving Marketing marketing of gift annuities into a thriving business
model are obvious. It requires individuals to „self-identify‟ to the charitable organization
in a reactive fashion. Individuals metaphorically, must raise their hands and shout “here I
am” to engage in any Planned Giving dialogue. Consequently, overall response rates are
in the 0.05% to 0.5% range (0.1% to 1% x 50%). These traditionally marketed programs
tend to work well in universities and religious organizations where there are large
members of constituents who have been cultivated through alumni programs or long term
church membership. This traditional model has been dubbed the „University Model‟
because it works best in that market environment and is usually taught to the industry by
Planned Giving practitioners who have worked in universities. The model does not work
well in broad based national charities, nor in hospitals, arts organizations (with some rare
exceptions), social service organizations nor any smaller charity.
This traditional model tends to overlook the key Planned Gift motivator – desire
to support the charitable cause. Whereas fundraisers work very hard at developing a Case
for Support for a captial or major gift campaign, little effort is usually made to develop a
persuasive, compelling Case for Support for the Planned Gift. The question “Why should
I make this gift?” is not answered. Quite often, charities take the current Case for Support
and apply it to the Planned Giving program, ignoring the 20, 40 or 60 year shift in time
horizon that encompasses the Planned Gift. Making a Planned Gift commitment is an
emotional, meaningful decision and yet practitioners tend to be practical and „corporate‟
in their approach.
Overall, the traditional marketing model is limited, ignoring the broad base of
support held by over one third of all Canadians and over 40% for universities
programs yielding less than 1% overall response rate, simply leave too much on the table.
The traditional approach is highly targeted when a widespread approach is called for by
the market receptivity. Such programs should be proactive, more closely akin to a
capital/major gift campaign model. We have embraced a limiting Planned Giving model.
What other model(s) are available?
8 Contact the Canadian Association on Charitable Gifts (CAGP) for details. 9 Canadian Centre for Philanthropy, Study of Philanthropy in Canada, (Toronto, Canada, 1988). p. 42.
The Planned Gift Decision
Before developing other models, however, let‟s look more closely at the Planned
Gift decision cycle. Successful practitioners have discovered that individuals move
through specific steps in making a Planned Gift commitment and the Gift Planner‟s job is
to facilitate this movement. The steps for the donor are:
1. Buy-in to the mission of the organization,
2. Having a clear understanding of the future needs of the organization and a willingness
to support those needs,
3. Being clear that a Planned Gift in its simplest form, is a gift from assets after death,
4. Being aware of the capability of making the gift, i.e., that the necessary assets are
5. Consulting with family/advisors, to get their support for the gift,
6. Being clearly asked for the gift,
7. Having objections thoroughly answered,
8. Being thanked and recognized,
And then the cycle recommences for a second Planned Gift. Not all donors will go
through all the steps but any marketing program must allow for and complement the
Furthermore, the Planned Gift decision should always begin with a bequest offer
by the charity except for special „product marketing‟ programs. The bequest is the easiest
gift to understand and is a pure gift from assets. More importantly, it is the gift that 34%
of the population is predisposed to make. After the bequest intention is made the
charitable organization should make offers of age-appropriate irrevocable gifts – life
insurance for younger donors, life-income gifts for older. The bequest decision should be 10 has developed a decision considered a five to ten year time period because the goal is from the charity‟s tree for bequest intentions, ultimately facilitating inclusion in the will. From most perspective, to get the bequest in the will! Legacy Leaders Inc.developed to least developed, this bequest decision tree is:
1. Confirmed (in writing) in the will
2. Confirmed (verbally) in the will
3. Going to the lawyer at a certain time
4. Going to be put in the will in the future
5. In or not in the will but will never confirm in writing
6. Does not have a will but wants to make the gift
7. Likes the idea but must check with advisors
8. Likes the idea but needs more time
9. Likes the idea but is not sure
10. Changed mind
10 Legacy Leaders Inc., Toronto, Ontario Canada (est. 1995), President and Managing Partner, Ken
Bequest intentions fall into one of these categories of decision. As much as charities
would like a simple, fully confirmed bequest inclusion, in reality, individuals must move
up this tree in a time frame of up to ten years. It is then incumbent on charitable
organizations to support both the Planned Gift decision cycle and the long term bequest
decision tree with sophisticated stewardship programs that take all of this into account.
These programs must have four basic components:
1. Contact strategy building relationship and dialogue
2. Education strategy giving the donor the necessary information to move their
decision along – information both about the Planned Gift and about the
3. Solicitation strategy that has a monitoring component to ascertain decision
movement and a hard „ask‟ component that moves the donor to a higher level
4. Re-solicitation for multiple, irrevocable and larger gifts over time
Recognition is successfully used as a motivator to move donors to the „confirmed‟ levels of decision.
With the knowledge of how the Planned Gift decision is made, let‟s look at a Marketing model that will be successful for all charitable and not-for-profit organizations.
A Fresh Way to Market A Planned Giving Program
Any fresh approach to Planned Giving marketing must build on both the research
available and knowledge of the Decision Cycle described previously.
? A clear, strong Case for Support will respond to the motivational need to support the
? A broad-based program will speak to all supporters and affiliates to make the most of
the potential available.
? The program will be proactive in engaging the Planned Giving dialogue because it is
known that comparatively few supporters will self-identify.
? It must take a long term perspective (five to ten years) to obtain „hard‟ commitment
and even longer to move to irrevocable, larger and complex gifts (bequests are of
? The program will be more like a capital/major gift campaign with a theme, high
visibility and a clear start and finish time.
? It will be measurable with defined, periodic goals.
? The „new‟ Planned Giving model will be built on market segmentation similar to a
capital/major gift campaign.
Recent work by Legacy Leaders Inc. and use of the United Church of Canada 11 has shown that response to a Planned Giving request for commitment varies by researchthe closeness of relationship to the charity. Legacy Leaders campaigns for hospitals have
11 United Church of Canada, Department of Stewardship Services, Unitrends, (Toronto, Canada, 1994).
resulted in the following response rates of those who have made a Planned Gift commitment :
Segment Response Rate of the Segment
One-time large donors 10.5%
($250 to $1,000)
Patients (not made a financial gift) 10.3%
Patients (having made a financial gift) 10.0%
Consistent, small donors 9.5%
(four years, over $25)
Current year donors 9.2%
Lapsed one year donors 7.5%
Lapsed two year donors 5.0%
The NCPG research (1993) also gave insight into the Planned Gift donor
relationship by asking them to describe their affiliation with the charity. They responded:
Personally benefited them 24.1%
Through friend/family 9.2%
Neighbour, community resident 7.9%
Church, religious affiliation 5.8%
Like the cause 4.2%
Past Contributor 0.3%
These various studies all describe a relationship matrix moving from the centre to
the periphery; the closer one is in relationship to a charitable cause or organization, then the more likely the individual is to making a Planned Gift commitment. This is the same model as the capital/major gift campaign but Planned Giving models do not usually operate this way. A „fresh‟ approach must do this. A corollary is that different relationship segments must be engaged in dialogues of differing quality. Also, supporting resources (brochures, mail packages, phone calls, visits), must differ for the different dialogues. The nature of the dialogue will define what resources are required.
With this previously described research in mind, we can now formulate a Planned
Giving marketing model applicable to all charities and not-for-profit organizations.
A New Planned Giving Marketing Model
(i) Case for Support:
The Case for Support for a Planned Giving campaign should be:
? Emotional and compelling,
? Clear as possible as to the final use of the gift (a challenge for deferred
? Fully compatible with the mission of the organization,
? Logical extension of that mission into a ten to sixty year future,
? Work inter-generationally because most gifts will only be utilized by future
? Allow individuals/families to leave a legacy, a mark towards something they
This developed Case for Support must be the foundation of every donor dialogue – it
encompasses both the mission and future needs steps in the Decision Cycle. Supporters
expect their charities to be bold and visionary for the future. Some examples:
“With a gift from your assets, you can help ensure the best health care in the
world, for your community, your children and their children.”
“Your planned gift with many others like you, will significantly change the lives
of future generations – free from debilitating diseases like -----!”
“Your significant gift will provide future generations in your community, with
access to higher education, unparalleled in the world!”
Individuals want their Planned Gift to make a difference and to reflect their deep
felt life values. A well thought out Planned Gift gives added meaning to one‟s life and the
Case for Support should have the same gravity and depth of meaning. Tax benefits which
are usually the cornerstone of a Planned Giving Case for Support, are not a major
motivational factor as shown by the NCPG research.
Consequently, development of the Case for Support should delineate befits to the
donor – “What‟s in it for me?” A list of benefits includes:
? “You receive satisfaction in knowing that the vital work will ….”
? “Take pleasure in creating a large gift for the future.”
? You can inspire and influence others by making a Planned Gift
? “Enjoy the tax benefits now when you can use them.” (gift of life insurance)
? “You can be part of an important group of people who are changing the future
of higher education.”
? You gain the satisfaction and excitement of seeing your Planned Gift put to
work in the Hospital you care about.” (strip bond)