Legacy Giving is something every nonprofit should incorporate at some point. Guest blogger Lori Kranczer is an attorney who has been specializing in planned giving for nonprofits for 18 years. Lori has directed national planned giving programs as well as worked with organizations just starting out to create their legacy giving programs. She is located in New York, NY. Today, she is helping us with when to launch a Legacy Giving Program.
If you work in a nonprofit organization I bet you have some responsibility to raise funds or work with donors. It may not be readily apparent (it’s not in your title) but if you have any contact with donors you are in the revenue generating business. It is the only way for the organization to function. If there were no revenue coming in, you wouldn’t be able to do the incredible work you do.
In the initial start up stage of an organization it is common to be supported by a few foundation grants and some individual seed funders – that is fantastic! It got a wonderful idea or program off the ground. You start gaining momentum. Perhaps the funding is sufficient for the first few years. And then, your organization is doing so well it needs to grow – either the facilities, staff, technology, geographically… you name it. Where is this funding coming from? If you don’t know, and haven’t started to work on it, you will be stuck.
Because what go you here will not get you THERE.
We know that a financially strong organization should capture both annual gifts and legacy gifts (or, planned gifts). They both contribute to the stability of the organization in different ways and provide opportunities for donors to give in different ways.
You need a stable and consistent annual campaign. Absolutely. But did you know as you build a donor base, those same annual donors will give you legacy gifts one day? So, if you are still building your annual campaign, let’s talk about ways to start to incorporate legacy giving into your development program and culture of giving so that when it comes time to promote legacy giving it is a very easy ask.
Let’s start with what legacy giving is not – it is not scary, it is not fraught with technical tax issues and it is not only for former practicing lawyers, and financial and tax advisors. It is a fundraising option to offer donors that should be used by any nonprofit professional that has a responsibility to raise money for an organization. Think of it as an additional revenue resource for your organization, and another way for your donor to show support.
Your organization needs to continue to ask for the annual gift to support its ongoing program, and a legacy gift – although perhaps not received until the future – can be more substantial and better aligns with the donors’ values.
What is a Legacy Giving Program and why is it helpful?
Why is legacy giving important as a revenue source, like an annual fund, corporate and foundation giving, and events? It is because:
- It adds another element to individual giving;
- It adds an additional revenue source for organizations to secure their fiscal stability;
- It builds an endowment to provide an ongoing source of income each year in perpetuity;
- It augments the other “asks” and deepens the connection with donors, and
- It provides an opportunity for impactful gifts.
There are so many reasons to add legacy giving as an option for your donors.
Why limit it to only current gifts of cash and securities?
Many donors don’t have the capacity to give major gifts on an annual basis but they can make a major gift by using other types of assets, like art and life insurance policies, and more thoughtful planning through estate gifts and endowments.
By promoting legacy gifts you are broadening your base of donors that can give to you in ways other than cash or securities. You are providing your donors a way to make an impactful gift to the best of their ability. You are creating a system that allows them to attach their values to their gift. You are giving them an opportunity to make a gift to your organization in a way that works for them.
Which organizations should use legacy giving?
If legacy giving is so fantastic, then should every organization create a legacy giving program? Not necessarily. Legacy giving is a great option to offer to donors, but a successful program does need some resources assigned to it. In order to get the best bang for the buck, if your organization has the following items then it will be well situated to consider starting a planned giving program:
Engaged board – are your board members really engaged? Do they provide resources, support and advice? Do they even come to meetings? I bet we have all worked with both engaged and not-so-engaged boards. Boy, is there a difference! Approach your board chair and then the executive committee about a possible legacy giving program and gauge their interest. Do they want to allocate your time and budget to it? Do they understand the need to support the future of the organization through legacy giving? Do they intend on creating a legacy gift themselves? (bonus points if they agree to talk to other board members about it.)
The most successful planned giving programs have an involved board. Period. There is no substitute for a board fully supporting the concept of legacy and willing to give you both the resources and the time to develop it. A staff driven legacy program is better than none, but will never get to the levels of what a board driven (or at least board-encouraged) program will do.
*Just starting out tip: Speak with your board about future plans for the organization. When there is a common vision you will need ways to think about funding it. That is when you can start to bring up legacy gifts
Senior management – This one is usually overlooked but bears being addressed. If you have a board that is interested in legacy (good for you!) but your senior management is blocking it in any way – not allocating a budget for marketing, not allowing some administrative staff time, discouraging you from making any progress, or perhaps avoiding any movement in the program – you are not going to get anywhere. There needs to be cooperation within the various departments of an organization in order for planned giving to take off. If the executive director doesn’t tell the marketing department it is a priority to fit in a dedicated legacy marketing initiative to an already tight communications calendar, well – you know it is just not going to happen. Senior management tends to examine a program and development schedule and determine which efforts have the best return on investment. Big mistake. We know that legacy gifts have a long horizon and that an organization may not see the results of their efforts far into the future. However, if we don’t put in the work now, the potential for gifts gets pushed further and further into the future. Or it may never happen.
*Just starting out tip: Discuss with senior management (unless you are the senior management!) about ways to integrate legacy giving into the existing program. Map out which areas of the development program have gaps and determine if there are ways to use legacy gifts as an additional revenue source. When senior management sees legacy funds coming in, they will want to support the legacy program.
Other helpful factors:
If you are in the start-up phase, you may not have aging donors. Anyone can make a legacy gift, but most legacy commitments come from older donors. Does that mean you wait until they are older than 65 years old? No way! Starting now when your donors are between 30-55 years old can yield excellent results – you will have deeper connections and groom these passionate donors for future Board of Trustee positions.
Also, there are some legacy gifts that are perfect for a “younger” donor, such as retirement assets and endowment gifts. Also look at whether these are your donors or constituents. For example, if you are an assisted living facility your constituents may be the elderly and your donors may be their children and grandchildren who are grateful for the excellent care you provide to their loved one.
Likewise, when you are starting out your organization hasn’t been backed up by years of experience. In order to have a large enough base of engaged donors to work with, you need to have been in business for a while. This will help donors determine that your organization is stable and has a future to support via a legacy gift, has the necessary systems and staff to administer the gifts and can demonstrate a real need for its existence.
*Just starting out tip: Now is time to start talking about the future, and planting the seed about planned giving even if you are not ready to ask for gifts and build a program. If you do start to ask for legacy gifts, start with endowments which will support your current operations and the donors can be a part of watching their investment make an impact.
Gather as much information as you can and make sure your database contains what you may need later on when asking for a legacy gift, like interests, birthdate and how your donors came to support you.
Who do you need to help with a legacy program?
A legacy program doesn’t happen on its own, and as I discussed above, the more people are behind it the more successful it will become.
However, the most important person is you. If you are reading this article you understand the need to have a legacy program and you are motivated to learn how to do it. Once you are on board, you will be able to build an impactful pipeline of gifts.
Take the fun and quick quiz to assess your legacy giving readiness
Lori Kranczer is an attorney who has been specializing in planned giving for nonprofits for 18 years. Lori has directed national planned giving programs as well as worked with organizations just starting out to create their legacy giving programs. She is located in New York, NY.
For additional information about legacy giving services, please contact Lori Kranczer at firstname.lastname@example.org
About Lori Kranczer
Lori Kranczer, Founder of Everyday Planned Giving, LLC, has over 18 years of experience advising nonprofit organizations on conceptualizing and building planned giving programs, training volunteer leadership and staff, soliciting and closing significant planned giving arrangements, and working with donors, their families and advisors on structuring the appropriate gifts to meet their philanthropic goals. An experienced attorney, Lori applies her knowledge of complex giving structures to the practice.
Lori lives in Brooklyn with her husband and two children. In her spare time, she enjoys renovating her 100+ years old creaky Victorian house.