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Identifying Your Best Planned Giving Prospects: It Helps To Know Where to Look

Identifying Your Best Planned Giving Prospects: It Helps To Know Where to Look. Lawrence C. Henze, J.D. Managing Director Target Analytics. Your Presenter. Managing Director, Target Analytics Law degree, University of Wisconsin-Madison 13 years as a development officer

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Identifying Your Best Planned Giving Prospects: It Helps To Know Where to Look

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  1. Identifying Your Best Planned Giving Prospects: It Helps To Know Where to Look Lawrence C. Henze, J.D. Managing Director Target Analytics

  2. Your Presenter • Managing Director, Target Analytics • Law degree, University of Wisconsin-Madison • 13 years as a development officer • Chief Development Officer, Dir. of Planned Giving • 15 years as a nonprofit marketing/predictive modeling consultant • Econometrics (co-founder) • Noel Levitz • Core Data (founder) • Target Analytics (formerly Blackbaud Analytics)

  3. Our Agenda • Planned Giving as part of the giving process • Donor Development and Planned Giving Myths • Planned Giving profiles • A brief look at planned giving marketing

  4. Planned Giving as Part of the Development Process Eliminating the Silo Approach

  5. Planned Giving as Part of the Development Process • Life on the farm • Think “free range”, not pens or silos • Ultimate giving is both a journey and a destination • Making the journey borderless encourages donor development

  6. Eliminating the Silo Approach • Do you have an integrated plan? • Have you investigated opportunities for using communication and donor relations efforts for multiple purposes? • Do you reward team efforts? • Do you encourage “out-of-the-box” thinking?

  7. Success: The Peaceful, Integrated Fundraising Farm

  8. Remember… • Perception is reality • Planned giving is a major gift • Donor-centered is not a staff interpretation • Get acquainted with your donors • “We have always done it this way” is not necessarily a statement of strength

  9. A Little Bit of KnowledgeWhat you know about planned giving prospects will increase your marketing effectiveness

  10. The Donor Pyramid Loyal Donors and Ultimate Giving

  11. Donor Profiling • High likelihood and high-level gift potential • Major and capital giving prospects • Planned giving potential is secondary but viable • High likelihood and low to mid-level giving potential • Annual giving upgrade • Consistent annual giving • Planned giving as a primary strategy • Low likelihood and low-level gift potential • Minimize investment • Consider reduced resource application • Lower likelihood but high-level gift potential • Need to be sold on your mission • Longer term cultivation • Second-tier solicitation strategy

  12. Ultimate Giving • Every individual has an “ultimate gift” • Ultimate gifts may be any level, any type (including $0) • Find ultimate giving profiles, develop appropriate marketing strategies, close more gifts! • Ultimate gift a better term than planned or major gift? • Still true after all these years: most bequest and annuity prospects will never consider a major outright gift

  13. The Relationships Between Donor Types • Is annual giving the basis of: • Major giving success? • Capital campaign success? • Planned giving success? • Therefore, do we underestimate the value of the $20 annual donor? • Do we over-solicit these individuals? • Do we recognize their loyalty?

  14. What We Know About Donor Types • Within an organization: • Annual and major profiles differ • Major and planned giving profiles differ • Among all nonprofits • Annual and major giving profiles vary • Type, location, solicitation style • However, planned giving profiles are very consistent • Lifestyle behavior • Use this consistency to your advantage

  15. Planned Giving ProfilesDo-it-yourself Options

  16. What Are My Options? • Do It Yourself • Data mining • In-house modeling • Prospect Screening/Vendor Options • Generic Modeling • Wealth Identification • Custom Modeling

  17. Types of Data • Types of Institutional Data • Demographic • Giving History • Activities/Relationships • Transactional • Attitudinal • Interests

  18. Whetting Your Appetite • Study the relationship between giving longevity and ultimate giving • Alternatively, the relationship between giving levels and ultimate major giving behavior

  19. Satisfy the Craving for Knowledge • Create a file of major donors using number of years giving (prior to first major gift) • 20 donors, range from 2 to 18 years • Plot data using Excel • Study AND interpret the trends

  20. Major Giving Analysis

  21. What Did We Learn? • Findings • For example, major donors make an average of 9 annual gifts prior to reaching major donor status (also check mode or median) • Establish a threshold, such as 6 annual gifts, to identify potential MG prospects • Also study planned giving behavior and its correlation with loyal annual giving

  22. What Did We Learn? • Conclusion: A significant number of major donors exhibit “trigger point” behavior • You are “growing your own” major donors • When donors activate these trigger points, they appear on your major donor radar screen • This is proactive data mining

  23. What Did We Learn? • And what do we do with this information? • Assume the following: • A major gift equals $5,000+ • For 60% of the file of major donors, their last gift before $5,000+ was $2,000 • For 70% of those individuals, their last gift before $2,000 was $500

  24. Beginning Level • Time-of-Year Giving • Create a pool of all donors over the past 10 years • Create a subset of donors giving in at least 6 of the 10 years • Plot the months/quarters of their gifts • Identify the habitual donors • Why is This Important? • Ultimate giving • Cost savings

  25. Beginning Level – Age Analysis

  26. Age and Planned Giving

  27. Planned Giving ProfilesUsing History to Ensure Your Future

  28. Planned Giving Facts • Bequests constitute almost 90% of all planned gifts made • More than 80% of these are unknown at present • Annuities constitute another 5-6% of all planned gifts • You can have a successful planned giving program without focusing on trusts (the complicated stuff!)

  29. Planned Giving Facts • You may have more dollar potential in planned giving than major giving • Why people give (NCPG survey) • 97% say they care about the charity • 87% desire to do something special • 35% tax planning • 22% know charity’s representative

  30. Planned Giving Facts • We often consider planned giving to be a second-tier strategy • Extremely passive solicitation methods • Appeals are broad based and require request for more information • Expectations are unreasonably low • 1% response rate to planned giving mailings

  31. Planned Giving Propensity

  32. Planned Giving by Gift Type • Each “type” has different traits • Annuities • Charitable remainder trusts • Bequests • The two faces of bequests

  33. Variables and Planned Gift Types? • Age? • Wealth? • Credit Usage? • Past Giving Behavior? • Type of Organization? • Relationship to Organization? • Marital Status? • Volunteering and other loyalty measures?

  34. Summary and Questions • Contact me:Lawrence HenzeLawrence.Henze@Blackbaud.com843-991-9921 • White Papers: http://www.blackbaud.com/resources/white-papers.aspx

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