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

Discovering the Secret Giver
Most gift planners target only the tip of the iceberg

by Larry Stelter

In the spring of 2008, my company combined forces with the nationally renowned research firm Selzer & Co., Inc., to provide insight into those who name charities in their wills, when they do it and why. Our goals were to:

• Document the world of bequest givers.
• Confirm current strategies that help nonprofits succeed in identifying and cultivating bequests.
• Develop data-driven tactics to help make organizations even more successful.

Our discovery? The audience that most gift planning offices target today may represent only the tip of the iceberg. Indeed, nonprofit organizations nationwide are missing out on untold millions in charitable donations by ignoring a largely untapped group of prospects.

Our national survey of adults aged 40 and older calls into question common practices among gift planners regarding how they identify prospects, cultivate donors, and communicate with them on an ongoing basis. Following is a summary of the results of this research, which challenges nonprofits to rethink conventional wisdom and current practices.

Of related interest

OF RELATED INTEREST: 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.

First, we documented that:

• Seven percent of Americans currently have made a bequest to charity in their wills.
• Five percent of Americans have a will and say they will definitely or probably make a bequest to charity.
• Five percent of Americans don’t have a will but say they will definitely or probably make a bequest to charity when they have this document in place.

The findings indicate that organizations should be reaching out to potential donors when they are in their 40s – at least 10 to 15 years earlier than the timing now widely accepted as ideal. The study identifies two lucrative prospect groups: five percent with wills in place and five percent without – both with plans to make a future bequest to charity. What is exciting is how the second group (those without a will) differs substantially from the first. These are the Secret Givers – secret because they are not on anyone’s radar screen.

Who are the “Secret Givers”?

Secret Givers are disproportionately younger (65 percent are age 40 to 54, compared to 37 percent of the population overall); not well educated (45 percent have no more than a high school education, compared to 35 percent of the population); single (26 percent compared to 11 percent overall); and have children under age 18 (29 percent, compared to 19 percent overall).

Other Key Findings

U.S. residents are making wills at an increasingly younger age. Most people aged 40 and over (66 percent) first write a will before they turn 50, as many are raising families. Forty-one percent, in fact, have a will before age 40. The percentage is even higher – 84 percent – among those reporting household incomes of $100,000 or more. The birth or death of a child or grandchild is the single most specific trigger (20 percent of those with wills say this was a main reason they created a will), so it is not surprising that 92 percent of those with children under age 18 say they made a will before they turned 50.

Most who do not have wills anticipate creating them within the next five years.
One in three people who do not currently have a will (38 percent) say they plan to make one in the next couple of years; another 30 percent say they intend to make a will within the next five years. Of the prospect group identified as Secret Givers, 73 percent intend to create a will within the next five years.

Older Americans report creating their wills at an older age. Half of Americans aged 65 and older who have a will (50 percent) say they were 50 or older when they created their will. The youngest age group (ages 40 to 49) show an inclination to get wills in order early. Seventy-eight percent of that group say their will was in place before they reached age 40; just 20 percent created a will during the decade of their 40s. In addition, 51 percent of those in their 50s say their will was in place before they reached age 40.

Once a nonprofit is included in a will, there it stays. The potential downside of targeting younger givers is that the work may come to naught if givers change their minds and remove the organization from their will later in life. These data suggest that the risk is negligible; once a nonprofit is included in a will, it is seldom removed. Fewer than 10 percent of bequest givers take a beneficiary organization out of their will once it has been included. That’s less than one percent of all Americans aged 40 and over who have a will.

Interpretation
We cannot over-emphasize the importance of the data about the staying power of bequests. Very few – less than one in 10 – who have bequests in their wills say they have ever removed a nonprofit from their plans. This reinforces the urgency of working with younger givers to put a plan in place. At a younger age, they probably have fewer nonprofits they would want to honor with a legacy gift; the competition is likely greater later in life. So, getting in the door early makes logical sense.

Comparatively few bequest givers have alerted nonprofits of their gifts. For the first time, we have more than anecdotal information about how many donors who make bequests alert nonprofits of their gifts. This information further contributes to the idea of the Secret Giver. The study shows that only 36 percent of bequest givers have alerted nonprofits of their gifts. Most donors’ plans are secret now and may remain that way forever. Those who have elected not to reveal their gift say the details of their wills are their own business and no one else needs to know.

Viable prospects fall within lower income groups. The Stelter study also refutes the minimum income levels that many fundraisers use as a guideline when targeting potential donors, showing that viable prospects may often have a lower income than the industry generally targets. Seventy percent of Secret Givers, for example, have a household income of $99,999 or less, compared to 48 percent of people who currently have a bequest in their will.

Interpretation
For gift planners, these data suggest that donors come in all shapes and – most relevantly – income levels. And really, this is good news. Our survey makes clear that the mood of this nation is generally quite supportive of philanthropy. We found that nearly all Americans give to at least one charity, so this is not a new behavior. About two in three have wills already in place. About one in five who have wills either currently name a nonprofit or are quite open to the idea.

What this means is that the work of persuading individuals to consider charitable giving is not really needed. This is already part of their routine behavior. And, most have a will in place. They simply need to be asked, and, in some cases, would benefit from information that would overcome concerns. These data also suggest that widening the net – making the appeal to a larger group of prospects – would likely pay off.

For a complete copy of this report, visit www.stelter.com.

Larry Stelter is President of The Stelter Company, the world’s largest planned giving marketing firm, and author of How to Raise Planned Gifts by Mail, published by Emerson & Church.

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