In the world of fundraising, one of the most effective strategies is blending major and planned gifts. This approach not only maximizes donor contributions but also ensures long-term financial stability for your organization. Let’s explore the benefits, strategies, and practical steps to successfully integrate these two powerful fundraising methods.
Understanding Major and Planned Gifts
What Are Major Gifts?
Major gifts are significant donations made by donors who have a strong commitment to your cause. These contributions are typically sizeable and can fund specific projects, initiatives, or capital campaigns. Major gifts are often seen as immediate, impactful support that can propel your organization’s goals forward.
What Are Planned Gifts?
Planned gifts, on the other hand, are contributions arranged in advance and allocated at a future date. These can include bequests, charitable trusts, life insurance policies, and other financial instruments. Planned gifts are an excellent way to secure financial sustainability and often reflect the donor’s legacy and long-term support for your mission.
Benefits of Blending Major and Planned Gifts
Increased Donor Engagement
By offering multiple ways to give, you cater to different donor preferences and capacities. This increased flexibility can foster deeper relationships and higher engagement levels.
Long-term Financial Stability
While major gifts provide immediate funds, planned gifts ensure future financial security. This combination helps balance short-term needs with long-term sustainability.
Expanded Fundraising Potential
Blending these two types of gifts opens up new avenues for fundraising. You can appeal to donors who might prefer to make a significant impact now and to those who wish to leave a lasting legacy.
Strategies for Blending Major and Planned Gifts
Identify Potential Donors
Use donor data and analytics to identify individuals who have the capacity and inclination to give both major and planned gifts. Look for patterns in giving history, engagement levels, and personal interests.
Build Relationships
Focus on building strong, lasting relationships with your donors. Personalize your communication, involve them in your mission, and show them the impact of their contributions.
Educate and Inform
Provide information about the benefits and options for planned giving. Many donors may not be aware of how they can contribute through planned gifts. Offer workshops, seminars, and resources to educate them.
Create a Comprehensive Campaign
Develop a fundraising campaign that incorporates both major and planned giving options. Highlight the immediate impact of major gifts and the long-term benefits of planned gifts. Use testimonials and case studies to illustrate the value of each.
Practical Steps to Implement Blended Giving
- Assess Your Current Donor Base:
- Review your donor data to identify potential prospects for major and planned gifts.
- Develop a Blended Giving Strategy:
- Create a plan that outlines your goals, target audience, and communication strategies.
- Train Your Team:
- Ensure your fundraising team understands the benefits and processes of blended giving.
- Communicate Effectively:
- Use various channels to reach your donors, including emails, newsletters, social media, and personal meetings.
- Offer Resources:
- Provide educational materials and tools to help donors understand their giving options.
- Recognize and Thank Donors:
- Show appreciation for all contributions, highlighting the impact of both major and planned gifts.
Statistics:
- “Organizations that blend major and planned gifts see a 25% increase in donor engagement.” – Fundraising Today
- “90% of donors are more likely to contribute when offered multiple giving options.” – Nonprofit Times
Conclusion
Blending major and planned gifts is a strategic approach that can significantly enhance your fundraising efforts. By understanding your donors, building strong relationships, and offering flexible giving options, you can create a robust and sustainable financial foundation for your organization.
Ready to take your fundraising to the next level? Contact us today to schedule a consultation and discover how we can help you effectively blend major and planned gifts for maximum impact.
Introduction
In the world of fundraising, innovative solutions are key to maximizing donor contributions and ensuring the sustainability of non-profit organizations. One powerful tool in the fundraiser’s arsenal is the Charitable Gift Annuity (CGA). While many are familiar with funding CGAs through cash contributions, fewer realize the potential to fund them using non-cash assets. This approach can unlock untapped resources for charities while providing significant benefits to donors.
Understanding Charitable Gift Annuities (CGAs)
A Charitable Gift Annuity is a contractual agreement between a donor and a non-profit organization. In return for a sizable donation, the non-profit agrees to pay the donor a fixed income for life. After the donor passes away, the remaining funds are retained by the organization, helping to further its mission.
Benefits for Donors:
- Lifetime Income: Donors receive a steady income stream, which can be particularly valuable for retirees.
- Tax Deductions: Donors can enjoy significant charitable tax deductions.
- Legacy: Donors leave a lasting impact on a cause they care about deeply.
Benefits for Non-Profits:
- Immediate Funding: Non-profits receive immediate funds, which can be used to support their operations and initiatives.
- Long-Term Growth: The eventual retention of the gifted assets helps build the organization’s endowment.
The Potential of Non-Cash Assets
Non-cash assets represent a vast and often underutilized resource. These assets can include real estate, securities, art, collectibles, and even business interests. Each type of asset presents unique opportunities and challenges, but with proper management, they can significantly enhance the funding of CGAs.
Types of Non-Cash Assets:
- Real Estate: Properties, both residential and commercial, can be donated. This option can provide substantial tax benefits and avoid capital gains taxes.
- Securities: Stocks, bonds, and mutual funds can be used to fund CGAs, offering donors the ability to contribute appreciated assets without incurring capital gains tax.
- Art and Collectibles: High-value items such as artwork, antiques, and rare collectibles can be liquidated to fund CGAs.
- Business Interests: Shares in privately held companies or partnerships can be contributed, enabling business owners to leverage their investments for philanthropic purposes.
Steps to Fund a CGA with Non-Cash Assets
- Identification and Valuation
The first step in the process is identifying suitable non-cash assets. This often involves working closely with donors to understand their portfolios and philanthropic goals. Accurate valuation of these assets is crucial, as it determines the annuity payments and tax deductions.
- Professional Appraisal
For assets like real estate and collectibles, a professional appraisal may be necessary to establish fair market value. This step ensures that both the donor and the non-profit receive fair treatment in the transaction.
- Legal and Financial Consultation
Involving legal and financial advisors is essential to navigating the complexities of non-cash asset contributions. Advisors can help structure the gift to maximize benefits for the donor while ensuring compliance with relevant regulations.
- Transfer and Liquidation
Once the asset has been valued and legal considerations addressed, the asset is transferred to the non-profit. For certain assets like stocks, this might involve a straightforward transfer of ownership. For others, such as real estate, the process might include selling the asset to convert it into cash.
- Establishing the Annuity
With the proceeds from the non-cash asset, the non-profit establishes the CGA, setting up regular annuity payments for the donor. The terms of the annuity will depend on various factors, including the donor’s age and the value of the gift.
Success Stories and Testimonials
Hearing about real-world examples can provide inspiration and confidence for both fundraisers and potential donors. Consider sharing stories of successful CGA arrangements funded by non-cash assets. Testimonials from satisfied donors can be particularly persuasive.
Example 1:
Jane Doe donated a piece of commercial real estate to fund a CGA. By doing so, she avoided a large capital gains tax bill and secured a steady income stream for her retirement. “Knowing that my property is supporting a cause I care about, even after I’m gone, is incredibly rewarding,” Jane shares.
Example 2:
John Smith, a retired executive, used appreciated stock to fund his CGA. “The tax benefits were substantial, but the real value was in the peace of mind and the legacy I’m leaving,” John explains.
Conclusion
Charitable Gift Annuities funded by non-cash assets offer a win-win solution for donors and non-profits alike. By exploring these options, fundraisers can unlock new avenues of support, ensuring the continued growth and impact of their organizations.
Are you ready to leverage non-cash assets for your charitable gift annuities? Contact our team of experts today to learn more and get started on your philanthropic journey.
PG Smiling and Dialing Joe Tumolo, CAP®
How many times a day are you picking up the phone to call a loyal donor who is not expecting your call to generate a new planned giving conversation? More and more nonprofits are relying on marketing and online will writing platforms to generate those conversations. These tools are important and should be used to supplement personal outreach, not replace it.
Despite all the advancements in technology, software and AI, the old fashion telephone remains one of the strongest tools we as fundraisers own but fewer people are using it to its full potential. It’s easy to get sucked into the daily work that can keep us from making the time to call donors on a consistent basis. And yes, it is getting more difficult to get people to answer the phone. However, our donors most likely to answer their phones are the people most likely to make a planned gift. The baby boomers.
When you create and stick to a process for picking up the phone on a consistent basis, you will reach more people than you think.
Developing your process
Over the last 10 years I have developed, tested and refined, a process to guarantee that I pick up the phone on a daily basis to generate new gift conversations. The process is comprised of 3 steps:
- MINDSET
The right mindset keeps you smiling and dialing no matter how people respond to your outreach.
- The right mindset is comprised of:
- Having fun making the calls. Make a game out of it. “How many calls can I make today? It’s 5:00 on a Friday. Let me make one more call and see if I can have an amazing donor conversation”.
- Remembering the good conversations you had the last time you made your calls.
- Remind yourself that’s it’s not about us. It’s about the donor, the people we serve and our staff who deliver our mission.
The classic book, The Four Agreements teaches us that when we take things personally, we are being selfish because we are making it all about us. Decades ago I was taught a great mantra that I use and teach on a weekly basis:
SW4
Some Will
Some Won’t
So What
SOMEONE’S WAITING
Someone’s waiting. Someone out there is going to be open to my outreach. This will keep you smiling and dialing.
- BEHAVIOR
To maintain consistent outreach, you must develop and track goals for how many times a day or week you will pick up the phone to call someone, not expecting your call. I fully recognize that everyone is understaffed and overworked. At the same time we often spend our time doing things we really don’t need to do. Check out the book Essentialism by Greg McKeown. Greg teaches it’s not about getting more things done, it’s about getting the right things done.
All we can control is our mindset and our behavior. We cannot control if someone answers the phone or welcomes our outreach. We can control how often we pick up the phone. My goal is to pick up the phone and make 50 calls per week. Your number may be much lower. The point is having a number and sticking to it. Do whatever you have to do to reach or exceed that number every week.
Ideas to do this:
- Write a list of the Donors you want to call each week. Include their phone number and any pertinent information you want if you get them on the phone. Carry that list with you everywhere. Early for an appointment? Make a couple of quick calls from your car. Sitting in an airport with a flight delay (very common these days)? Get your list out and make some calls.
- Schedule your calls. Example, “Tuesday from 9:00am to 11:00am I am making my calls. I’ll close my door, put my do not disturb on my phone and make my calls”.
- TECHNIQUE
Getting results on our calls requires that we continually refine and develop our skillsets to have more and better conversations. Here is a list of key areas you should focus on:
Outcome goal-before you pick up the phone, determine what outcome you would like from the call. Setting up an online or in person Zoom? Checking in to say thank you and pre-qualify someone before taking the time to go see them? If your goal is to visit with them, you must give them a compelling reason to do so.
Make it about them not you. Example: “Donors I meet with tell me they really benefit from a conversation about the impact of their gifts and how they can have an even bigger impact”.
Don’t sound like a robo caller. This is our biggest competition. We must show donors immediately that we are professional fundraisers. How do we do this? Speak slowly. Pause a lot, allow for open space. Start by asking your donor if you caught them in the middle of something urgent? Most people are not doing something urgent and will respond with a “no”.
Ask them why they have been so loyal to your organization.
Ask if there is anything you can do to better serve them as a donor. Asking this question separates you from most other fundraisers you are competing with.
Things to say to get the Visit
Assuming the conversation is going well, you can ask them this powerful question “If I/we could give you a compelling reason to do more, how would you feel about a conversation around that”? Can I buy you a cup of coffee (lunch, etc.) to discuss that?
Some donors tell me they would like to have a bigger impact on the people we serve but are not sure how to do that and still accomplish their retirement goals and provide for their children/grandchildren. There are ways you can do that, and I can share them with you when we meet.
I really enjoy speaking with you. I am going to be out visiting other donors next week, can we get together for 30 minutes?
The more of the right activity you do the more, good things happen. What kind of results can you expect with consistent smiling and dialing? I use the 20% rule. It has held up over the years and other consultants I speak with tell me the same.
- I’ll connect with 20% of the people I call.
- 20% if the people I speak with will be open to a meaningful conversation
- 20% of those people are likely to do more outright or deferred.
As a baby boomer and planned giving donor myself, I speak on behalf of all my peers. Pick up the phone, call us. Make it about us and how we will benefit from a conversation with you. You will be amazed at the conversations you will have.
For more ideas on generating more planned gifts, check out my Cup O Joe Videos.
https://www.youtube.com/@JoeTumolo
Want to talk about how I might help you grow your planned giving program? Call me at 610-653-7906 or email me at [email protected]
The fundraising landscape for non-profit organizations is perpetually evolving, and one of the innovative trends changing the game is ‘Fractional Fundraising.’ This approach has emerged as a beacon of efficiency and effectiveness—ideal for organizations with big dreams but limited resources.
Fractional Fundraising refers to the strategic use of part-time professionals by nonprofits, allowing them access to vital skills without the full-time price tag. It’s a sharing-economy model applied to the fundraising sector, where the expertise is fractional, but the benefits are comprehensive. If you’re part of a nonprofit and looking to harness every drop of potential, here’s why you should consider Fractional Fundraising.
A Cost-Effective Strategy for Growth
Fundraising is an indispensable activity for any nonprofit, but hiring a full-time fundraiser or development team can be prohibitively expensive, especially for smaller organizations. With Fractional Fundraising, you hire experts on a part-time or project basis. This flexibility allows you to control costs while still tapping into the knowledge and networks of seasoned fundraising professionals.
Access to a Wide Range of Skills
The fractional approach doesn’t mean you only get a fraction of the skills. In fact, it can provide access to a pool of professionals each specialized in different areas, from grant writing to capital campaigns, major donor cultivation to online fundraising strategies. Leveraging diverse skills can significantly improve a campaign’s success without the commitment of a permanent employment contract.
Focus on Your Core Mission
Nonprofit leaders and staff are often pulled in many directions. By employing fractional professionals, your core team can stay focused on what they do best—serving the organization’s mission—while trusted experts handle the complexities of fundraising.
Scalability and Flexibility
Nonprofits have seasonal peaks and valleys in their fundraising efforts. Fractional Fundraising aligns with this cycle perfectly, providing more help when you need it during busy times and scaling back during slower periods. This agility helps maintain a balanced budget and keeps the organization lean and effective.
Ensuring Fresh Perspectives
Bringing in external professionals can infuse your organization with new ideas and strategies that challenge the status quo. Fractional professionals, with their wide range of experiences, provide a constant stream of fresh perspectives which could be the key to breakthrough in your fundraising efforts.
How to Implement Fractional Fundraising
To make the most of Fractional Fundraising, start by assessing your organization’s needs. Pinpoint the areas where you lack expertise or where additional skills could enhance your efforts. Then, seek out professionals with a track record in these areas who offer fractional services.
Build clear communication channels and discuss expectations up front. This ensures all parties know the targets and goals of any campaign. Respect the part-time nature of the arrangement, understanding that the professionals may work with multiple clients.
Finally, measure your results and analysis the ROI. Always keep your organization’s mission at the forefront, and ensure that Fractional Fundraising aligns with your values and contributes positively to your efforts.
Conclusion
Fractional Fundraising opens the door to expertise that might otherwise be out of reach for many non-profits. By judiciously leveraging these on-demand resources, even small organizations can dream big and maximize their impact. It’s smart, scalable, and can inject just the right expertise at the right time. If you’re ready to take your non-profit’s fundraising to the next level, it might be time to go fractional.
Whether you’re starting from scratch or looking to bolster your current fundraising processes, Fractional Fundraising is a flexible solution to consider. It’s a testament to the power of innovation within the nonprofit sector, proving once again that when it comes to making a difference, the right approach can make all the difference in the world.
When it comes to planned giving, there’s a plethora of options available for donors who wish to combine philanthropic efforts with financial planning. Among these, one unique and highly beneficial device stands out — the Charitable Lead Trust (CLT), often dubbed the ‘Unicorn of Planned Giving’ for its distinctive advantages and relatively scarce use.
A Charitable Lead Trust is essentially a trust that provides a fixed amount or a percentage of the trust’s assets to a charity for a set number of years. After this period, the remaining assets are transferred to non-charitable beneficiaries, such as family members. The appeal of a CLT lies in its potential tax benefits and the opportunity to leave a legacy for both the charity and the donor’s heirs.
What Makes a Charitable Lead Trust Unique?
The “unicorn” status of the CLT is due to its unique structure that offers a juxtaposition of charitable giving and wealth transfer within a single vehicle. It starts with the trust making annual payments to one or more charitable beneficiaries for a term defined by the donor, providing immediate support to those causes. Subsequently, the assets are passed on to the donor’s heirs, often with significant tax savings.
Tax Efficiency
From a tax perspective, the immediate benefit is the charitable deduction the donor receives when the trust is established. Not only that, but the assets placed in the trust are removed from the donor’s taxable estate, which can add up to substantial estate tax savings, especially for those with larger estates.
Furthermore, if the trust is funded with appreciating assets, any growth in the trust is free from both gift and estate taxes when it passes to the remainder beneficiaries. This can effectively allow a donor to freeze the value of the taxable gift at the time the trust is created, circumventing taxes on any appreciation.
A Legacy of Giving and Wealth
The CLT allows donors to instill the values of charitable giving in their heirs. The extended duration of donations to chosen charities keeps the family name associated with meaningful causes over a prolonged period. This occurs while still ensuring that significant assets are preserved and later passed on to the beneficiaries.
Crafting Your Charitable Lead Trust
Setting up a CLT requires thoughtful planning and should be tailored to each individual’s estate planning goals and philanthropic desires. An estate attorney or a planned giving specialist can provide guidance on the duration of the trust term, selection of the charitable recipients, choice of assets to fund the trust, and projection of the eventual benefits to non-charitable beneficiaries.
The choice between a Charitable Lead Annuity Trust (CLAT), which pays a fixed amount to the charity, and a Charitable Lead Unitrust (CLUT), which pays a variable amount based on the trust’s value, further allows customization to donor preferences and financial situations.
Overcoming the Rarity
While the Charitable Lead Trust offers evident benefits, its rarity stems from its complexity and the fact that it may be more advantageous in certain economic conditions — particularly when interest rates are low. That said, with expert assistance, a CLT can be a powerful tool for estate planning and philanthropy.
For content creators and individuals who are interested in exploring advanced giving methods, a deeper understanding of the Charitable Lead Trust is crucial. By effectively leveraging the benefits of this planned giving mechanism, philanthropically-inclined donors can achieve superior results for their financial legacy and charitable interests alike.
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In summary, the Charitable Lead Trust represents a harmonious blend of altruism and fiscal prudence, standing as a symbol of strategic generosity. Whether you are a seasoned philanthropist or considering your first major charitable endeavor, the CLT offers a route that could lead to significant tax savings, along with the fulfillment of supporting the causes dear to your heart. It’s time that this unicorn takes its deserved place in the realm of planned giving.
Remember, successful estate planning and charitable giving require careful consideration. Always consult with financial advisors and legal experts to ensure that any planned giving strategy aligns with your overall financial and philanthropic goals. The unicorn that is the Charitable Lead Trust just might be the magical creature you need to complete your fiscal fairytale.
When it comes to charitable giving, one pathway that offers both flexibility and control is donating through a trust. Whether you’re an experienced philanthropist or a first-time donor, understanding how to utilize trusts for charitable intentions can amplify the impact of your contributions. In this post, we’ll explore the basics of trusts, benefits of donating through them, and ways to align your philanthropic goals with your financial planning.
What is a Trust?
A trust is a legal arrangement where one party, known as the trustee, holds and manages assets on behalf of another party, the beneficiary. Trusts are used for a variety of purposes, including estate planning, tax management, and, as we’ll discuss here, charitable giving.
Why Consider a Trust for Charitable Donations?
Control Over Contributions
One of the main advantages of using a trust for charitable donations is the level of control it offers. You can specify when donations will be made, which charities will benefit, and for what purposes your funds will be used. This is particularly useful if you wish to allocate your gifts over an extended period or have specific conditions for their use.
Tax Benefits
Donating through a trust can also provide tax advantages. Depending on the type of trust you choose, you can potentially reduce income taxes, lower or eliminate estate taxes, and receive a tax deduction for the fair market value of your contributions.
Maintaining Your Legacy
Trusts allow you to leave a lasting legacy. By setting up a charitable trust, you can ensure that your philanthropic work continues well into the future, possibly beyond your lifetime, supporting causes you care deeply about for generations to come.
Types of Charitable Trusts
Charitable Remainder Trusts (CRTs)
A CRT pays a percentage of the trust’s value to named beneficiaries for a certain period of time, after which the remainder is donated to selected charities. This is beneficial if you’re looking to receive income during your lifetime before supporting a charitable cause.
Charitable Lead Trusts (CLTs)
Conversely, a CLT provides fixed payments to a charity for a set period, with the remaining assets eventually going to non-charitable beneficiaries, such as family members. This type of trust can help in passing wealth to heirs while reducing estate taxes.
How to Get Started with Charitable Trusts
Consult with Legal and Financial Advisors
Crafting a trust for charitable purposes should be done with the help of experienced legal and financial advisors. They will guide you in choosing the right type of trust based on your personal circumstances and philanthropic objectives.
Determine Your Goals
Clearly define what you want to achieve with your charitable giving. Consider the causes you wish to support and what kind of impact you hope to make.
Select Your Trust Vehicle
After consulting with your advisors and honing in on your charitable ambitions, choose between a CRT, CLT, or another trust structure that aligns with your goals.
Manage the Trust Effectively
Working with your trustee, ensure you uphold the terms of the trust and manage funds faithfully. Regular reviews may help adapt to legal changes or shifts in personal goals.
The Impact of Your Trust-Based Donations
The beauty of charitable donations through a trust is that they can provide meaningful support to non-profit organizations while fitting within a broader financial strategy. Whether you’re aiding educational initiatives, furthering medical research, or contributing to disaster relief, the benefits of this mode of donation are clear and impactful.
By thoughtfully integrating charitable giving into your financial plans, you’re able to make a significant difference in the world while reaping the rewards of savvy financial and estate planning.
Remember, the path to philanthropy through a trust is a powerful way to share your wealth and values. Navigated with care and consideration, it’s a path that leads to both personal fulfillment and profound societal benefit.
