Maximizing Planned Giving Potential: Strategies & Principles for Endowment Success

1. Planned Giving Symposium January 31, 2012 Sponsored by:

2. PlannedGiving Made Easy Linda Wise McNay, Ph.D. Partner

3. Types of Recipients of Contributions, 2010 Total = $290.89 billion Giving USA 2010

4. 2010 Charitable Giving Total = $290.89 billion

5. The Gift Pyramid

6. Planned Giving Defined • Most often: • donor + opportunity = benefit to school • Planned Giving: • donor + opportunity + asset + device = • benefit to school & donor.

7. Ways of Investing • Outright gifts • Estate gifts.

8. “There are Only Three Places You Can Leave Your Estate” • To your family • To the federal and state governments • To charity • …Charles Collier, Harvard University.

9. The Greatest of All Planned Gifts: • Bequests • Most popular and best understood • Provide greatest dollar contribution to planned giving revenue • People between 60 and 69 years of age begin considering bequest plans • People between 70-79 years of age actually make their plans • Time from executing a will to bequest received by a charity averages 5 years • …Robert F. Sharpe, Jr.

10. Bequests • Partnership for Philanthropic Planning Research reveals: • More folks are considering estate plans earlier, age 47 • Many would consider a gift if asked.

11. Bequests • An Extraordinary Opportunity: • Only about 40% of folks have made a will • Only 7% actually included a gift in their will.

12. Why Document Bequests? • Stewardship • Problem property • Unacceptable restrictions • Potential increases • Potential conversions • Educate, inspire others.

13. Bequests • Education is Key: • Staff • Leaders • Volunteers • Donors • Advisors.

14. Endowment Defined: • Endowments are collectively invested in individual funds for an organization’s long-term benefit • True endowment • Quasi endowment • Term endowment- temporarily restricted.

15. 2010-2011 Independent School Endowment Statistics

16. What is Your School’s Endowment Status? • Market value of endowment? • Number of funds? • Income generated for operating budget.

17. Are You Ready for Endowment Building? • Sound mission • Solid financial base • Growing donor pool • Highest quality product.

18. Are You Ready? • Leadership committed to endowment- board and staff • Long-term giving and annual giving history that will allow you to profile and prospect among these donors • Balance tension between operating- endowment and capital needs.

19. First Steps • Craft a compelling case for endowment, convey a sense of urgency, impact of endowment growth • Engage leadership • Craft an endowment plan/strategy.

20. What is Your Institution's Planned Giving Status? • Determine current planned giving commitments? • Who are your prospects? • What is your planned giving strategy?

21. 1) Do Your Homework • Total realized bequests • Number of tracked bequests over time • Average bequest gift • Total lifetime gifts from bequest donors • Ratio of bequest gift to lifetime gift • Percent of bequest donors who were annual donors.

22. 2) Establish Clear Guidelines to Create New Permanent Funds: • Fund purpose • Fund size • Naming opportunities • Create accounting and legal records • Standard document • Endowment acceptance process.

23. 3) Create an Active Stewardship Program: • Annual written report • Annual personal contact • Annual call from staff • Annual handwritten thank-you note • A report on institutional endowment/ annual report • Planned giving newsletter • Invitation for thank-you events • Assign to a staff person • Track in data system.

24. 4) Expand Your Planned Giving Website by Using a Third Party Vendor

25. 4) Expand Your Planned Giving Website by Using a Third Party Vendor • Up-to-date information • Gift calculators • Retirement calculators • College calculators • Tools to engage prospect in the planning process.

26. 5) Insert Endowment Information Into Your Communications • Annual report • Quarterly magazine • Website • Endowment brochure/materials • Planned giving newsletter • Samples.

27. 5) Endowment Communications • Use clear messages • Challenge the reader to action • Personal attention • Use testimonials • i.e. Send a special letter to donors age 50+ who have given to your school 5 years in a row.

28. 6) Develop a List of Prospects • A successful planned giving program depends on identifying those elusive planned giving prospects, conducting thorough research and effectively cultivating them before making “the ask” • 3 Groups • Ready to receive an ask • Those that meet criteria, ask once a relationship is established • Those with an interest in the school.

29. 6) Develop a List of Prospects • Identify the Prospects: • A person who is “well-off” • A person who is concerned with the receipt of current income • A person who may want your charity or a bank, as trustee, to exercise management skills over their assets as they grow older • A person who is unmarried or a widow or widower • A person who is married but without children • A person who has a particular tax problem • A person who is a significant present or past donor to your school • A person who is an older individual • A person who has some sort of programmatic tie to your school.

30. 6) Develop a List of Prospects • Women as prospects: • Fastest growing donor population • Statistically women are more likely to outlive their spouses • Women are more likely to make final dispersion of a family's assets.

31. 6) Develop a List of Prospects • Institutional Signals For Planned Giving prospects: • Long-term (5+ years) donors • Past endowment donors • Current and past board members • Long-term friends, volunteers and staff • Multi-generational families • Select top 10, 25,100 that fit into more than one category.

32. 6) Develop a List of Prospects • Why Do People Really Make Planned Gifts? • They believe in the good work done by your school, and are asked to make a planned gift after being properly educated and cultivated • They know one or more of your volunteers and have been influenced or “sold” by the volunteer • They need or want the tax advantages • The gift helps the donor save money, and therefore, he can pass on more to his heirs, satisfying his personal obligations and charitable interests at the same time • The planned gift places the investment management responsibilities on others (a bank or charity), an important matter for many older individuals • Assets can also be managed after death for the benefit of a surviving spouse who may be less knowledgeable of financial matters.

33. 7) Train Staff and Board on Key Planned Giving Messages • 8) Establish “Speed Dial” Relationships • Attorneys • Wealth managers • 9) Host Seminars on Estate Planning.

34. 10) Recruit a Planned Giving Committee 11) Recruit a Giving Advisory Board 12) Establish a Planned Giving Recognition Society.

35. 13) Solicit Planned Gifts With Confidence.

36. Questions?

37. Thank You