Are We There Yet? What Gets Measured?
Historically, irrevocable gifts have carried too much weight in measuring the success of planned giving programs. Board members, the chief executive and finance positions, development directors, and dedicated planned giving staff overemphasize irrevocable gifts because of their visibility on financial statements.
Somewhat better, though still extremely limiting, are organizations that count “amount certain” bequests in campaigns. These are usually specific bequests in which the donor shares this detail. Council for Advancement and Support of Education (CASE) organizations used a measure by which specific bequests from those older than a certain age, often mid-60’s, could be counted toward a campaign goal. Fortunately, the NCPG (now PPP, as I mentioned earlier in this series) came out with “Guidelines for Reporting and Counting Charitable Gifts” which suggested a better approach in a campaign setting (Second Edition 2006; http://bit.ly/pppguidelines). CASE has now adopted the PPP guidelines; however, practice still varies considerably, even within higher education.
Even though dollar goals are generally discouraged in the old planned giving paradigm, some organizations still have them. They can project dollar goals relatively safely since they have decades of data from which to draw and make conservative projections. Generally, however, I recommend against dollar goals.
Legacy giving, unfortunately, has not yet developed key or universal measurements. I would suggest that the following are the most important for goal setting and success.
The first is the size of the “suspect” pool. For the legacy ask effort to be consistently implemented, an organization needs a growing number of supporters to approach.
Second is the number of qualified leads obtained on an annual basis. These should be segmented in the following areas: a) communications and marketing; b) legacy ask; and c) previously unknown gift from estate.
Third, the total number of new gifts with the same segmentation as qualified leads. For most organizations, bequests will represent the overwhelming majority of legacy gifts (somewhere in the 90 percent and 100 percent range). While measuring the type of gift is important, it is not usually a valid indicator, despite the historical overemphasis on irrevocable gifts.
Caleb Rick, JD, suggests another overall measure of success. You will know when you’ve arrived when legacy giving is seen as an organizational priority, not a development office responsibility.
One fact I especially enjoy about our field is that there is an exception to just about every rule—even my own “rule” that dollar goals don’t work in well-run legacy giving programs. Indeed, I know of at least one organization that uses annual dollar goals effectively: American Cancer Society. Each staff person has a dollar goal. At first, this may seem counterintuitive to the discussion above. However, the system works very well. The dollar goal is supported by other goals, including the numbers of asks and visits. For a bequest commitment, a low average is used, ~$30,000, based on decades of results.
Two decades ago, planned giving committees usually had a major focus on including professional advisors as committee members, specifically in the three classic practices intersecting our field, often desired in this order of importance: estate planning attorneys, those in the financial services industry, and CPAs. The thinking was that advisors, if not bringing in gifts through their own clients, could offer pro bono technical help in securing planned gifts.
These committees often functioned as a subcommittee of the organization’s board development committee. Most provided program overview as well, from the volunteer perspective. This approach changed some over the years. Larger organizations with capacity often established a planned giving committee that included only those who had made a planned gift as well as a distinct professional-advisor committee to offer technical support. Smarter versions of the planned giving committee also included members not necessarily on the organization’s board. Sometimes members provided stewardship to other planned givers; however, they rarely made solicitations.
In the new paradigm of legacy giving, the committee has further evolved to not only require legacy commitment for participation, but also requires actively soliciting others through the one-on-one legacy ask. Committee members help identify suspects, many of whom they will, hopefully, cultivate for an eventual legacy ask. Members also help with stewardship, program planning, and evaluation.
For the legacy committee to succeed, you need to ensure that its effort is adequately staffed. This includes providing scripts and letter templates and tracking activity. Regular contact and coaching are crucial to gaining and maintaining momentum. Otherwise, this type of committee becomes a “make-work” effort with few results. It is important to reward success with praise and to make the work visible by spreading the word to other members of the legacy giving committee, the board development committee, development staff, and other key staff such as the CEO and CFO. Smaller nonprofits with a development director or lone executive director responsible for legacy program implementation will especially benefit from this leveraged approach.
Who Are We, Professionally?
This last question mostly applies to those of us who are members of PPP and/or its local councils. This transition from the old paradigm of planned giving to the new paradigm of legacy giving has a correlation to the composition of nonprofit and professional advisor members. Both within PPP nationally, and among most of the local councils, the following changes have taken place:
As noted above, one other major number, often overlooked, has remained constant: the number of those in our profession who work full time in planned / legacy giving has remained consistent at about ten percent.We’ve seen a dramatic shift in the ratio of nonprofit members to professional advisors over the years. This roughly mirrors the availability of continuing education in our field. Up until the mid-1990s, the financial services field was heavily dependent on the local planned giving councils for training. By the end of that decade not only was there much greater internal training within a given company for advisors, the industry also started providing more frequent external workshops for both training and business development purposes.
Historically, the formation of planned giving councils and eventually NCPG was roughly based on the model of the estate and financial planning communities. Implementing this approach was particularly useful in building up membership over the years, and provided good networking opportunities both locally and nationally for those of us who intersect in the fields of estate, financial, and gift planning.
However, right from the start, this model has had problems that have limited our reach. Many estate and financial planning councils meet over lunch or dinner at a cost that is substantially higher than many nonprofits will routinely support, especially nonprofits whose staff work less than full time on legacy giving. The price point for these continuing education events, combined with the idea that those securing legacy gifts need to be technically competent in areas beyond the basic bequest and designations, has had the effect of keeping many people away from regular council and national activity.
About 2010, PPP made an overture to the Association of Fundraising Professionals (AFP). While I’m generally unaware of the discussion in the proceedings, one topic was the possible incorporation of PPP into AFP. It appears that the only visible outcome is a change of title for a column in Advancing Philanthropy, AFP’s bimonthly national magazine with a circulation of ~30,000. The column used to be titled, “Planned Giving.” Around the time of these bilateral meetings the title changed to “Philanthropic Planning.” A few years later the column title reverted back to “Planned Giving.” AFP could exert strategic leadership in moving toward the “you”-friendly “legacy giving” label. It might also consider promoting discussion of other changes resulting from the paradigm shift to legacy giving presented in this series.
What might a model for chapters and our national organization look like in the new paradigm of legacy giving? This is a much larger discussion. However, I suggest we operate more like the AFP model (and other fund development associations) in many parts of the country which offer more affordable continuing education. Specifically, many AFP chapters hold their breakfasts and lunches at less expensive venues. We also should seek to have more collaboration with AFP local chapters. Part of this would be reexamining the content of the continuing education that we offer. We should provide more basic information that would truly help nonprofits launch and sustain legacy giving efforts that are focused primarily on gifts of bequests and designations, and the structure needed to secure and sustain these, including making legacy asks.
The phrase “culture of philanthropy” is frequently being used in the nonprofit community. This refers to organizational values and practices that support and nurture development within a nonprofit community. The major reason this phrase is in circulation is because it appears as a major theme in the report by CompassPoint and the Haas Fund titled, “UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising.” (https://www.compasspoint.org/underdeveloped)
While the report does not refer to planned / legacy giving, the message of breaking out of “silos” is certainly timely and relevant. (Full disclosure: I served on the study’s Advisory Committee.)
Moving to a focus on legacy giving does not mean we need to leave behind the excellent resources and continuing education for which our council and national programs are so well known. However, we need to provide more than the technical side for the remaining 90 percent in our field who practice less than full-time, or who are new to this area of giving, and need resources outside the historically technical information we have provided.