When many nonprofit leaders think of planned giving, they think of it as something only for large organizations. But that couldn’t be further from the truth. In reality, any nonprofit could benefit from planned gifts—including small organizations. There’s no mystery to planned gifts, and they offer any nonprofit the opportunity to create a sustainable path for the organization’s or its programs’ growth. So, let’s dig into this missed area of opportunity.
Understanding planned giving
When donors take the time to make planned gifts, it’s not unusual for them to donate six- and seven-figure gifts to a nonprofit. The most crucial reason donors make these types of gifts is that they’ve made an empathetic connection with the organization. Because of that connection, they decide to leave an impactful planned gift that’s much larger than their usual gifts and leaves a lasting legacy.
Planned giving is also known as legacy giving or gift planning. Its premise is to allow donations and tax optimization through simple and sophisticated charitable vehicles like wills, annuities, life insurance, and trusts. The idea of planned giving is to have it done in coordination with a donor’s estate or financial planning. As a result, these tools can provide a beloved organization with a significant amount of revenue while also providing tax optimization for donors.
Why legacy gifts matter for small nonprofits
It’s no secret that universities and institutions have whole departments dedicated to legacy gifts. However, these sorts of donations could also benefit small nonprofits. The following are just a few reasons to pursue planned gifts as a small nonprofit.
- Long-term financial stability. Small nonprofits always need to ensure their sustainability. Planned gifts provide the space to create endowments, secure programs for years, and to expand the organization.
- Diversification of revenue streams. Every fundraiser knows the importance of diversifying revenue. Sticking only with traditional fundraising limits organizations to, say, grants and events—and that’s not a good idea.
- Building endowment funds. Another excellent reason for small nonprofits to pursue planned gifts is endowments, which allow an organization to secure its future growth and expansion.
- Engaging donors. Speaking to donors about planned giving allows you to connect at a deeper level. In other words, you’re looking to convert their passion into a meaningful legacy for themselves that will impact others.
Implementing planned giving at a small nonprofit
So, now that you know why legacy gifts are a good idea for a small nonprofit, let’s dig into how you can implement it. We get it and realize that a dedicated planned giving staff is likely not possible. Therefore, we have a list of ideas that will help you—slowly—cultivate these types of six- and seven-figure gifts.
Educate board members and staff
The best place to begin is with your board and team. By educating your fundraising team and board members several times a year, you provide them with the basics of a specialized fundraising area. That creates a culture of legacy and allows them to know its benefits.
Create a clear planned giving policy
Creating a gift policy is another vital aspect of planned giving for small nonprofits. For example, determine the types of planned gifts you want to accept and how you wish to use those funds in partnership with a donor’s wishes.
Inform your donors
Communication about planned giving is essential. So, create a page on your site informing people about these vehicles. In emails you send to donors, make it a point to regularly direct donors to the information on your site regarding these specialized gifts.
Secure professional guidance
Did you know that even lawyers and financial planners don’t know all the nuances of planned gifts? So, one of the best things you can do for yourself is to ensure you have a planned gifts expert on hand. For starters, look at the National Association of Charitable Gift Planners.
Highlight and recognize legacy gifts
When you receive planned gifts, make it a point to recognize and show donors appreciation. You can create briefs for the board and share the legacy story with your donors and on your social media and communications platforms. Doing so raises awareness!
A powerful strategy for small nonprofits
In conclusion, any nonprofit can—and should—do planned giving. As you can see, it’s a powerful strategy that can leave an organization with six and seven-figure gifts (or more!). However, the secret for getting planned gifts is to consistently promote them and allow your board, staff, and donors to become aware of how they can leave a lasting legacy with a bequest, life insurance policy, or other tools. Small nonprofits can create a lasting impact on the causes they serve.
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