MAJOR GIFTS VS. BEQUESTS

Dear Kim:

What is the difference between a major gift program and a bequest program? Don’t major donors give most of the planned gifts anyway?

Signed,

Planning to Get Gifts


Dear Gift Getter:

I have asked my colleague, Kevin Johnson, to answer this one.  He is the author of a new book listed below, and is an expert on this issue:

Major gifts and charitable bequests overlap – but much less than many people believe. Let’s start with definitions so we all talk about the same thing. “Planned gifts” include charitable trusts, annuities, and tools that provide income to donors. Bequests are a form of planned giving, but are different enough that you will want to separate your thinking about bequests from other kinds of planned gifts.

Because the complex trusts were once the province of the wealthy and started out in big organizations with major gift staff, the impression most nonprofits have is that any estate gift can only be obtained using a major gift style program. This major gift approach involves multiple visits, donor research, lots of personal attention, all of which are required (and appropriate) in setting up the complex trusts, and other life income gifts. Because of the time and attention required, most small and mid-size groups can’t or don’t effectively do this work in regards to planned gifts.

But you can have a very successful bequest program.  That is because of the 4 out of 10 Americans who even have a will or estate plan, only about 8% leave any money to charity.  But 90% of those gifts are made by bequests.  In fact, almost 95% of the dollars that come to nonprofits from planned giving arrive in the form of simple bequests and retirement plan designations (research based on more than 100,000 planned gifts and bequests by Blackbaud/Target Analytics). It’s been my experience that many people WANT to make bequests to small and mid-size groups because they feel their gifts have bigger impact when compared with billion dollar college or hospital funds.

If you link major gifts and bequests, you will probably make decisions that result in many missed gifts. Yes, some major donors do also make bequests, but most of the money comes from large numbers of everyday donors – often loyal donors who have a solid history of gifts under $100 a year. How many loyal donors like that do you have?

Loyal donors need to know that you will put their gift to work, that you have guiding principles in place, that you can be trusted to be a steward of their gift when they are no longer here to be a watchdog. If you take the time to discover what your loyal donors need when it comes to building your case for a bequest – a legacy gift – you will be rewarded with their trust, gifts, and a strong balance sheet.

This answer is derived from the book The Power of Legacy and Planned Gifts: How Nonprofits and Donors Work together to Change the World by Kevin Johnson. You can find out more about the book on Amazon here:

http://www.amazon.com/Power-Legacy-Planned-Gifts-Nonprofits/dp/0470541369