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How-to Library • Featuring articles from past issues of Contributions

Survey Shows Many Planned Giving Prospects Clueless

by Larry Stelter

As the CEO of a marketing firm that specializes in fundraising, I spend much of my time speaking with development professionals across the country about the changing landscape of donor behavior.

Fortunately, in recent years we’ve made remarkable strides in understanding what makes donors tick. Our latest insights were gleaned from our July 2009 national poll in which we scientifically documented the mood of Americans aged 30 and older on topics that included how the economy has affected giving, individuals’ thoughts on inheritance, and their understanding of planned giving terms and vehicles.

There were plenty of “aha” moments as we sifted through the results, but a few deserve special consideration. Among them: When it comes to the term “planned giving,” most people have no idea what we’re talking about. In fact, 63 percent of Americans aged 30+ are unfamiliar with the term, although a higher percentage expressed understanding of various ways to make a planned gift. This finding reminds us to think carefully about the words we use to define the work we do and the actions we expect of donors.

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ALSO BY THIS AUTHOR: In How to Raise Planned Gifts by Mail, Larry Stelter offers a wealth of guidance and real-life examples, showing you how to double, triple, or even quadruple your planned gift income by putting his proven formula to work.

Ignorance is not limited to the jargon of planned giving. The least understood planned giving vehicle is a gift of retirement plan assets through a beneficiary designation. A slim majority (53 percent) said they were aware this is an option—the lowest of any approach tested—and a minority of people (43 percent) realized that if their retirement account assets were to go to family and friends, there would be taxes owed, whether immediately or in the future. Educating donors about this particular planned giving option is likely a sound strategy.

Change of Heart

One of the most fascinating findings from the survey was that people can be moved to consider planned giving in the course of a fairly short interview (keep in mind that each phone survey lasted about 11 minutes).

When asked initially, just 4 percent of all respondents said they had already put a planned gift in place, and 10 percent said they would “definitely” (3 percent) or “probably” (7 percent) make a planned gift.

The number of prospects, however, swelled a bit after respondents received some information about a variety of ways planned gifts could be structured. By the end of the interview, a full 50 percent of all respondents said they would consider at least one of the types of planned gifts we discussed.

We call this prospect group the “movers” because they initially indicated resistance to the idea of making a planned gift, then later in the questionnaire showed strong interest in doing just that. This group amounts to 6 percent of everyone interviewed, which, compared to the 10 percent who were initially inclined, is a substantial number.

It means our initial pool of prospects grew by 60 percent! In addition to being more affluent and better educated than average, the movers are also younger, with a majority under age 50. In short, this study confirms the opportunity to recruit planned gifts among younger age groups than are often targeted.

If you are having trouble wrapping your mind around who the movers are, here is a breakdown of the demographics of this newfound group:

  • They report higher incomes. One in three (30 percent) movers and 31 percent of strong movers are in the $100,000 or more income bracket, compared to 17 percent of all adults aged 30 and older.

  • They are well-educated. A majority of movers (57 percent) and almost half of strong movers (49 percent) have a college degree or more education, compared to 43 percent of the population.

  • They have children but not grandchildren. They are in the childrearing years, so it is not surprising that about half have children under age 18 at home (50 percent for movers and 48 percent for strong movers). However, just 25 percent of movers and 21 percent of strong movers have grandchildren, compared to 39 percent overall.

  • They are more heavily concentrated in the West. About one in three (31 percent of movers and 38 percent of strong movers) live in western states, compared to 24 percent overall.

  • They are young. Nearly one-third (31 percent) of movers and 40 percent of strong movers are in their 30s, compared to 21 percent overall.

  • They differ little in political party identification, except that strong movers are more likely than average to say they are republicans (36 percent, compared to 25 percent overall).

  • Strong movers are more likely to be male. Two out of three (65 percent) of this small but mighty group are male, compared to 47 percent of the population.

The Case for Sharing

In culmination, we tested individuals’ willingness to share a piece of their inheritance with a nonprofit. This study confirmed our previous research, which showed that the overwhelming reason why people choose not to include a charity in their estate plans is because they prefer to provide for family and friends.

So we asked the 31 percent of Americans who expect to receive an inheritance whether or not they would be open to the idea of sharing a percentage of it with a worthy cause. The simple answer is yes, they are comfortable with the idea. Seventy-two percent of those who have received or expect to receive an inheritance would deem it reasonable if 5 percent to 10 percent of the estate went to charity. This opens the door to conversations with would-be donors who believe they need to leave everything to their families.

Cast Your Net Widely

Our interpretation of these data is that many who could be recruited to planned giving are simply outside the conversation. The upshot is that planned giving can become a much more common occurrence, but it starts with educating the public.

With just 37 percent aware of the phrase planned giving, there is much room to grow. Education on the terminology may help, but it isn’t everything. Just 42 percent of those who know the term—a minority—say they’ve been approached to make a gift. This clearly suggests that nonprofits would benefit from greater outreach to a wider range of prospects. People simply need to be asked to do it and shown the way.

Download comprehensive survey results at www.stelter.com/movers.

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