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Get more from your prospect research and screening efforts: Part Two

Good morning, DonorDreams readers! Tis the season, and like you I am slammed. I apologize for missing Tuesday’s post, but the day just slipped away from me. I’m very sorry. However, today’s post is the second part of the prospect/donor research and screening article from DonorSearch’s Sarah Tedesco. And it is VERY GOOD!!! Last week she wrote about screening and how it can help improve your special events. Today, she focuses in on how it can help you identify hidden planned giving prospects in your database. I hope you enjoy this morning’s post.  Here’s to your health!  ~Erik

5 Factors That Can Help You Identify a Planned Giving Prospect

When nonprofits talk about identifying a prospect’s giving capability, there is usually some variation on three points.

Capability can be evaluated based on a person’s philanthropic inclination, level of wealth, and connection to your organization.

That donor identification formula is used regularly for prospect research, and it works. Most often, organizations turn to this research when seeking out major giving candidates. But, there’s another type of donor that also deserves that level of investigation: planned giving donors.

If a nonprofit knows what to look for, it should have no problem locating planned giving prospects.

The following five factors are all identifying traits of planned giving donors.

These indicators are rooted in the above points (philanthropic interests, wealth, and tie to your organization), but have been tweaked to specifically help identify planned giving donors.

Factor One — Loyalty

loyaltyIn terms of traditional types of giving, past donations are strong indicators of future giving. That trend logically carries over to planned giving.

Leaving a planned gift is a way of securing a legacy, and those who donate such gifts are likely to want to have a legacy with an organization that they’ve had a strong connection to.

The correlation is clearly evidenced by the fact that during their lifetimes, 78% of planned giving donors contributed over 15 gifts to the organizations they allocated funds to in their wills.

Factor Two — Recipient of Your Nonprofit’s Service

clientsThis factor is in reference to those whom your organization positively affected. The range is fairly broad here. A planned gift might be left to a university by a dedicated alumnus. Similarly, a hospital might receive a planned gift from a grateful patient.

Cross reference your list of those who have benefited from your service and have also donated, and that can be the start to your search. Throw in some of the next few traits and you’re on your way to finding the perfect planned giving prospects for your organization.

Factor Three — Traditional Wealth Markers

wealthLet me start by stating in no uncertain terms that planned giving prospects do not have to be wealthy.

I repeat — planned giving prospects do not have to be wealthy.

We’ll get to that point in a moment for factor four, but for the time being, we should acknowledge that many planned giving donors are wealthy.

How do you check for these signs of wealth? Perform a wealth screening. You’ll be looking for real estate ownership, extensive political giving, stock ownership, and other similar indicators.

Factor Four — Has the Desire to Leave a Bigger Gift Than is Presently Possible

large giftFactor four encompasses the large gift loophole for planned giving donors. Although they are often comparable in size, unlike major gifts, planned gifts do not inherently require wealth.

Just because someone does not have the current expendable income that allows for large charitable gifts does not mean that the person is disinterested in giving those gifts.

Those who want a workaround for that obstacle can allocate a planned gift in their wills (also known as a bequest). That way, the funds go to the nonprofit when the donor no longer needs them.

If you want to build the kind of relationships that result in planned gifts in situations like these, your organization absolutely must have excellent stewardship. Nonprofits with successful planned giving programs follow top-notch donor retention practices.

Factor Five — Has Been an Ongoing Supporter of Your Organization

loyalty2You’ve probably noticed a theme among three of the traits listed above:

Candidates for planned giving are dedicated supporters.

Planned gifts are not left on a whim. The word planned is in the term! They come from people who have developed a bond to your cause, so you need to keep them in mind when considering prospects. Think beyond those who have made monetary gifts.

Look to:

Support of your nonprofit comes in many forms. Don’t forget that when you’re finding planned giving donors.

* * * *

Remember, when searching for planned giving prospects, it is not one, but all of these factors combined that will help you identify the best candidates. A planned giving prospect has more than one defining trait. They’re multi-dimensional donors, influenced to give because of a confluence of circumstances.

8% of individual giving comes from bequests. Ensure that your organization is receiving a part of that 8%. Now that you know the prospects you’re looking for, start seeking planned gifts.

sarahSarah Tedesco is the Executive Vice President of DonorSearch, a prospect research and wealth screening company that focuses on proven philanthropy. Sarah is responsible for managing the production and customer support department concerning client contract fulfillment, increasing retention rate and customer satisfaction. She collaborates with other team members on a variety of issues including sales, marketing and product development ideas.

Don’t wait until your donors die

in memoriamOn Saturday, I attended the funeral of my father’s aunt — Ruth Merriman — in Crystal Lake, IL. She lived a long and amazing life and her family will miss her dearly. While sitting through the service listening to her children and grandchildren eulogize her, I couldn’t help marvel at the things I didn’t know about my distant relative. For example . . .

  • Aunt Ruth was the first female to be voted the president of a School Board in the State of Illinois
  • She was a Girl Scout volunteer earlier in life
  • In her retirement, she loved her volunteer work at Good Shepard Hospital in Barrington, IL

Aunt Ruth was the picture of philanthropy, and I only kinda/sorta knew that. How embarrassing!

As I came to this conclusion, it dawned on me that many non-profit organizations are in the same boat with their donors.

Donors are part of your organizational family, but oftentimes they are like distant relatives who you don’t know very well. I wonder how many times a non-profit organization found out that someone was “into their mission” only after the donor had passed away?

Of course, the only solution to this problem is to get out of your office and visit with your donors.

  • Invite your donors to coffee or lunch
  • Ask them to attend your events
  • If they stop donating to you, re-engage them and visit

A good friend of mine did exactly this when he accepted the position of President & CEO of a non-profit organization.

relationship buildingHe first started looking for people who had once been loyal supporters but for whatever reason stopped donating. Then he found mutual friends (e.g. board members, former board members, volunteers, donors, etc) and asked them to assist with a re-introduction. On a go-forward basis he simply engaged in relationship building.

While relationship building varies with different donors, it involved nursing home visits, cigars, and field trips to visit the organization’s facilities in the case I just referenced.

If this sounds simple, I assure you that it is. BUT resource development doesn’t have to be complicated.

Sometimes you find great people. Other times you uncover amazing stories. Once in a while, you rediscover a passionate donor who adds you to their estate plan for $500,000, which is exactly what happened in the case of my friend.

What are you doing to engage your donors and bring them into the inner circle of your non-profit family?

In other news . . .

Speaking of maturing donors and relationship building, I am reminded of BREAKING NEWS that was recently announced.

Did you hear that Congress passed and President Obama signed legislation into law extending the IRA Charitable Rollover retroactive to the beginning of 2014? This legislation allows individuals over age 70½ to directly transfer up to $100,000 per year from an IRA account to one or more charities.

Of course, the catch is that is retroactive to January 1, 2014 and only covers contributions through December 31, 2014.

If you want a better/clearer explanation, check-out Tony Martignetti’s vlog on this subject.

Happy Holidays . . . and here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

Planned giving? Deferred giving? Let’s call it charitable gift planning!

What’s in a name?

By Michael Johnson
Guest blogger

namePeople often ask, “What is the difference between deferred giving, planned giving and charitable gift planning?  Isn’t it all the same?”  Certainly there have been times in the past when these terms were commonly interchangeable. That was absolutely the case when I entered the field 25 years ago.  But over the years, most practitioners have taken to using “charitable gift planning” for a number of good reasons.

First, the term “planned giving” always begged the question, “What is an unplanned gift?”  As if there was some way a check got written accidentally or, even worse, without the donor’s knowledge!  In this sense, all gifts are planned gifts, so what is the distinction?

Another common term used when I was a young man (and the republic was new!) was “deferred giving” as if the only gifts that required planning were gifts which were completed at a later date, like upon the donor’s death. This certainly covers a lot of very popular gifts such as bequests, beneficiary designations and life income gifts, but it does not address the outright transfer of assets, like securities, real estate and other property, that support so many capital campaigns and other major gift efforts.

The wide acceptance of the term “charitable gift planning” is due, in my belief, to two things.

  1. It is a term which encompasses any type of giving, both outright and deferred, which is more complicated than writing a check.  But mostly because it places the proper emphasis on the planning process in which the donor and his or her advisors participate.
  2. It is the process by which a donor reaches multiple goals: personal, financial and philanthropic. It is donor-centric and takes into account the person’s goals, risk tolerance and family situation.

From a personal standpoint, it is far more rewarding than simply closing a large gift because I have had the privilege of being a participant in helping to craft the very best plan for my client, the donor.
Mike Johnson blog sig

Non-profits under fire: Measure this! Measure that!

Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking more closely at a recent post from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

Today, we’re focusing on a post that John titled “How Much Do I Love Thee?“. In that post, he talks about the recent obsession in the workplace to measure EVERYTHING (e.g. SMART goals, Management by Objectives, etc) and pushes back on the idea that everything must be quantifiable. He starts his post with the following quotation from Albert Einstein:

“Not everything that can be counted counts, and not everything that counts can be counted.”

Every non-profit professional in the world knows that our sector is under extreme pressure to conform to the trends that John references in his blog post. Here are just a few examples:

  • measuring community impact,
  • program outcomes measurement,
  • employee performance (e.g. management by objective), and
  • measuring donor loyalty.

Neither John nor I (or Einstein) are saying that we must fight this trend; however, there are things that are not measurable that must be considered and brought in the equation.

More concerning to me is the impact that this trend seemingly has on fundraising practices. Specifically, I’ve heard more and more fundraising professionals talking about program outcomes and how it can be used to demonstrate “return on investment”.

Speaking as a donor, I love hearing that my local Boys & Girls Club’s homework assistance program resulted in 75% of kids either maintaining or improving their grades. However, I really want to hear the personal stories about little Jack and Jane; Jose and Irma; or LaShaunda and Xavier. There is something inspirational in those stories. More importantly, it helps me understand the impact of that program.

I think the Center of NonProfit Excellence stated it best in their marketing for a 2010 training titled “Narrative Philanthropy: Stories that Result in Gifts”:

“But the pendulum may have swung as far as it can in the direction of statistics and outcomes. Accountability is crucial, but cannot account for the fact of why people give.  What explains the emotional impulse to give?  Stories. One good story is worth at least 10,000 measurable outcomes.”

If you get a chance, I encourage you to click here and read more about Jim Grote and his ideas around Narrative Philanthropy.

I also like what Norma Cameron said a few weeks ago in her blog post titled “The Power of Legacy Stories: A Daughter’s Love“. You should check out an awesome template that Norma created to gather legacy stories from your donors. A link to this tool is embedded in her blog post.

Circling back to John’s blog post — “How Much Do I Love Thee?” — he drives home his point by posing a simple question: “How much do you love your spouse?”  Of course, there is no way to answer this question in a quantifiable manner.

The same holds true for the non-profit version of this same question:

How much do your donors love your organization?

While you may be able to look at your donor database LYBUNT reports and review the results from a recent donor survey, I suspect none of this data will ever truly answer the critical question that I just posed. Nevertheless, this doesn’t mean that you stop trying to answer the question.

So, what should donor-centered fundraising professionals do???

I suggest picking up your phone, calling that donor, and inviting them out for a cup of coffee or lunch. When you are sitting across the table from them, do what Jim Grote suggests . . . tell them stories (and pepper in a little outcomes and impact data). Make them smile. Make them feel good about their last donation. Once you get to this point, you may want to take Norma Cameron’s suggestion and ask the donor about collaborating on the creation of their “legacy story”.

Yes, I know how busy many of you are. I am not suggesting this approach with all of your donors or the folks who buy raffle tickets to support your mission. Surely, you know who your most important donors are. Right? For small organizations, this might be a great project for your Top 5, 10, or 25 donors. For large organizations, the sky is the limit. This might even be a great cultivation/stewardship project in which fundraising volunteers can be trained and included.

I suspect this is can be woven into all organization’s Major Gifts and Planned Giving programs.

Where is your organization at with all this “measurement” stuff? What are you doing to adjust to the trend and ensure that you’re not over compensating? Are you having success aligning with United Way’s “Community Impact” model? Do you employ any of Jim Grote’s or Norma Cameron’s Narrative Philanthropy suggestions in your resource development program? Please scroll down and use the comment box to share a little bit of your experiences. We can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

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