Latest / We Are For Good Podcast - The Podcast for Nonprofits / 129. Back to Basics: Planned Giving - Jonathan McCoy, CFRE and Becky Endicott, CFRE

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129. Back to Basics: Planned Giving - Jonathan McCoy, CFRE and Becky Endicott, CFRE · We Are For Good Podcast - The Podcast for Nonprofits

• 0:01
  Jonathan McCoy: Hey, I'm john.
• 0:02
  Becky Endicott: And I'm Becky.
• 0:03
  Jonathan McCoy: And this is the we are for good podcast.
• 0:06
  Becky Endicott: nonprofits are faced with more challenges to accomplish their missions and the growing pressure to do more, raise more and be more for the causes that improve our world.
• 0:15
  Jonathan McCoy: We're here to learn with you from some of the best in the industry, bringing the most innovative ideas, inspirational stories, all to create an impact uprising.
• 0:24
  Becky Endicott: So welcome to the good community, where nonprofit professionals, philanthropist world changers and rabid fans who are striving to bring a little more goodness into the world.
• 0:34
  Jonathan McCoy: So let's get started. Yo, Becky? Jinx,
• 0:39
  Becky Endicott: Jinx jokey, omya coke. I just wanted to tell you that I'm really proud of us today.
• 0:44
  Jonathan McCoy: Why is that
• 0:45
  Becky Endicott: we're having this conversation. And I'm also proud of you for tuning in today. And diving into plan giving,
• 0:51
  Jonathan McCoy: we're going back to basics, this is week three, and we just wanted to carve out space to talk about plan giving, because honestly, it is one of the best kept secrets of our industry. You know, one of our core values is playing the long game. And this has got to be playing the long game to the ultimate degree.
• 1:08
  Becky Endicott: And you are 100% right on that. And also right on, it's one of the most untapped areas of our sector.
• 1:15
  Becky Endicott: And why? Because it's complicated, because there's so much nuance to it, and just not having a financial legal tax mindset is very difficult for a lot of people who are coming in on just the grassroots, nonprofit side. So we're telling you, we're gonna break it down for you as basic as it can get today and hold on because we don't profess to be the plan giving experts of the sector but we know enough to be dangerous.
• 1:45
  Becky Endicott: And we know enough to leverage plan giving to create movements and make longtime donors feel incredibly special.
• 1:52
  Jonathan McCoy: In the way that this conversation, I feel like Becky's being very humble, cuz she's closed some incredible, huge planned gifts in her career. So I say what I love about it is that it's this convergence of all of our favorite topics. It's about not just looking for donors, it's like looking for believers in your mission. It's finding value alignment, it's playing the long game, which we've said, it's having these meaningful conversations that go beyond this, just this surface, and figuring out how to create legacies. And that is something that is super inspiring and exciting to be a part of. So you really got to flip the script.
• 2:25
  Jonathan McCoy: But fear holds back a lot of people
• 2:28
  Becky Endicott: fear holds back a ton of people. And I mean, it's fear of not knowing the tools that are available, fear of approaching the topic. I mean, some people think it's very taboo to talk about death.
• 2:39
  Becky Endicott: I know people within my own family who are afraid to sign a will because they fear the banality of it. It's fear about the complexity of the process, not understanding the terminology, the operational structures, but the thing that I love so much about playing giving, is that it is a vehicle and a strategy to take ordinary people and make them feel like rockstars because everybody wants to leave something meaningful behind when we leave this earth. And when you can be the bridge to creating that for someone. Wow, what a moment what a gift to be in this industry,
• 3:17
  Jonathan McCoy: just feeling very boosted like I want to go raise some plan gifts right now, Becky,
• 3:22
  Becky Endicott: anyone has some volunteer opportunities within their mission. Come get john now.
• 3:27
  Jonathan McCoy: But you know, I'm going to throw a marketing lens on this from a big picture, big takeaway perspective. To me playing giving starts, it's just about marketing. It's about awareness of your team of your donors. It's reminding people that it's an option and telling the story of what's possible, telling the stories of people who have done this and have perpetuated their legacy, celebrating those stories, and just planting seeds. I mean, if we're playing the long game, we get to be all about the seed planting and the watering. And there we go. Talking about the long game again,
• 3:55
  Becky Endicott: I know. So we're going to come back to just definitions and plan giving has a lot of terminology and the way we talk about in our industry.
• 4:02
  Becky Endicott: So sometimes it's called gift planning, planning, giving deferred giving, legacy giving not sure what the terminology is in your shop, but it's really about helping donors make plans to leave money or assets to your mission at a future date, it could be during their lifetime, or it could be following their death. And so there's so many forms of, of ways that people can do this. But the most common forms are bequest, which is giving something away to a nonprofit in your will IRAs, life insurance and probably real property. And all of that is super high level and I feel heavy eyelids already happening with our listeners right now.
• 4:46
  Becky Endicott: But I really think the most important name of the plan giving game is loyalty,
• 4:52
  Jonathan McCoy: loyalty, and that's a big word because from an annual giving perspective, you know, we're not looking for people or donors that left to the surface because they gave the most over time. With plan giving. It really is about the loyalty. It's just showing this ongoing commitment that every year they remember you. They remember your mission, they want to make sure that they get in their gift or whatever that looks like. But that loyalty is what translates into people that are really your prospects for plan giving you So I love that you said that.
• 5:19
  Becky Endicott: Yeah. So I think one of the wise voices of playing giving in our sector is Tony mera Neti who also has a podcast. So if you want to go listen to his podcast, if you want to get some more insight to go deeper into this, but I saw a really quick, great quote that he said, and it's planned gifts are the ultimate gift. people choose to give some or all of their estate to your nonprofit when they die. This is a highly personal and very likely emotional decision. So it's not enough to simply send a thank you letter and follow up with more solicitations. We've got to go deeper and make them feel special.
• 5:56
  Jonathan McCoy: And I mean, this wasn't part of the script. But I think it's worth saying that practically speaking, what does that mean? We call it oftentimes, like permanent stewardship, when someone has made a plan gift, how are you making sure that regardless of who comes or goes from your staff, that they know that this is a donor who has made this ultimate gift, and that there's always this threshold of how we interact and how we think and how we talk to these donors that have made the ultimate gift.
• 6:23
  Becky Endicott: Permanent stewardship equals like eternal love. That is what I would say you have to eternally love on these individuals who made such a sacrifice who lifted you out of the millions of nonprofits, they could be giving to and said, this one is very special to me. And we need to treat that in the holy space that it was given and make them feel like rock star. So I want to dive a little bit into the giving vehicles because there are so many in the planned giving space. And I think, again, the complexity of these is what scares so many people away from diving in and creating a really robust plan giving program. But I really have to say just from my experience, the cultivation of the gift, and the stewardship of the gift is 95% of the game.
• 7:09
  Becky Endicott: So while this may be the part, this 5%, that intimidates you, there are a lot of experts that you can employ to help walk you through this. There's financial advisors that can structure these things. Not everyone, especially if you're in a small shop, not everyone has the staff or the resources or the general counsel or whoever it is that can build these complicated structures. But I want to go through them just very quickly.
• 7:32
  Becky Endicott: And just so there's a basic understanding of how people can give, we mentioned this already, but bequest is by far and away the number one playing giving vehicle in the nonprofit sector, that's leaving a specific amount of money, a percentage of their total wealth, or maybe even gifting a remainder of their state to the organization upon their death. So that makes up nine out of 10 plan gifts in less than 25% of those donors ever notify the organization of their gift. And I'm sure there are people nodding right now who have had a magical check that has come into their, in their organization or gotten one of those wonderful phone calls about a planned gift that's come. And so the quest is where I would, I would say I spent the bulk of my time and where most major gift officers with two life insurance is another vehicle stocks, property, IRAs or any sort of retirement vehicles. But I want to dive into one in particular, which is the donor advised fund, and these are called deaths, which has got to be one of the worst acronyms and Daffy Duck. It's not Goofy, because let me tell you, it is a powerful power tool. And so a donor advised fund is just an account that's dedicated to charitable giving.
• 8:51
  Becky Endicott: So an example of this is maybe a family foundation that wants to set up their giving through a Community Foundation. And so they might meet regularly with the Community Foundation and decide, you know, this is where we're going to allocate all of our debt funding for the year, there's a significant financial planning advantage to utilizing a donor advised fund because the tax benefits are so advantageous. So once you move your funds to a donor advised fund, you can claim a tax deduction immediately if you're itemizing it and if you're thinking, Oh, I don't really want to do that. Is there really space to hold court in the DAF area of fundraising? Let me just tell you this, which came out in the 2020. def report out which is that $38.8 billion were contributed to deaths last year and $25 billion were given away from def grants. So this is it's money that's just sitting there, it's waiting for to be inspired.
• 9:50
  Becky Endicott: It's waiting to be gifted. So please look into that vehicle.
• 9:54
  Becky Endicott: And then just a couple of others are gifts in kind, I think Any manner of annuities unit trust or remainder trust, those are very complicated, because they're agreements in which the donor gives a significant gift to your mission. And they receive a tax deduction at the time of the gift, but they just get payments over quarterly semi annually during their lifetime.
• 10:17
  Becky Endicott: And I want to just commend you all for staying, and all of that.
• 10:25
  Jonathan McCoy: Taking a quick pause from today's episode to thank our sponsor, who happens to be one of our favorite companies virtuous, you know, we believe everyone matters. And we've witnessed the greatest philanthropic movements happen when you see an activate donors at every level. And virtuous is the platform to help you do just that. It's so much more than a nonprofit CRM. virtuous helps charities reimagine generosity through responsive fundraising.
• 10:45
  Jonathan McCoy: And we love it because this approach builds trust and loyalty through personalized donor engagement. Sound like virtuous may be a fit for your organization, learn more today@virtuous.org Follow the link in our show notes. Well, if you think about a starting place, because this should be in everybody's toolbox, if you're, you know, raising funds right now. One is do you have a gift acceptance policy, and I think this is critical, truly in what it is, is knowing what type of gifts you can and cannot accept, it is okay to say no, you know, there's times when the gift is going to put you in a compromising position, or redirect you from accomplishing the mission that you're set out to do. Or it's just something that you can't, you're not set up to handle, you've got to have this in place. So you can have that to fall back on.
• 11:32
  Becky Endicott: So you're saying do not accept penguin suits as a verifiable gifting time
• 11:37
  Jonathan McCoy: that was received at a nonprofit we worked at
• 11:39
  Becky Endicott: Yeah, it actually happens. So yes, have a sound gift acceptance policy, it will keep you from accepting penguin suits. Okay, another great starting point is do your data mining, run a query, pull out anyone with multiple gifts in a year or over an extended period of time? If we go back to that loyalty, look at that consistent long term, unbroken generosity? How long is that look at people who've given every year for 10 years, 20 years, 30 years, whatever makes sense for the timeline of your organization. And then think about involvement. involvement is a great tool to look at when you're doing some data mining, assess involvement with board members, how long have your volunteers been in there, maybe it's alumni are grateful patients. And don't forget about long term employees and like volunteer auxiliary members, they may not score on that what we talked about last week on the affluence, they may not have the wealth to give a major gift now, but collectively in their estate, they can make a really large gift and they're sitting there in your donor database, you just need to pull it,
• 12:46
  Jonathan McCoy: it really is looking at your list with a different lens. And so number three would be once you have your list, you want to segment it. And what that means is prioritize it, you certainly want to shepherd all of them that you have identified through with some type of marketing plan. I mean, the ongoing marketing of this, like we said, it's just keeping awareness up and telling really incredible stories just to plant those seeds. But when you have your segmented list, you really want to identify who could provide the highest buy your return, who has that traction, who has that immediacy, that they may want to decide quicker to make a gift.
• 13:20
  Jonathan McCoy: Those are the ones you really want to set up one on one meetings with and put them into the cultivation cycle, that's a lot more specific.
• 13:27
  Becky Endicott: Okay, so number four would be create a donor survey. And this is something we've done. And it's a very interesting social experiment and engagement experiment, you're really trying to gauge a donors feelings about the organization and sort of test their warmth to the mission, because sometimes they may just be someone who's been giving a very modest amount over a very long period of time, they may not have been elevated into a mid level pipeline, or to maybe to an event. And it's like, we need to test and see how they're feeling about giving. Have they seen their impact? Do we feel like they're ready for exploration of a legacy gift?
• 14:05
  Becky Endicott: This is also a really great tool to leverage if you're trying to relaunch a planned giving program because the survey can be centered around what are your passions? how it would talk to me about your connection. And it's really about creating an endpoint where you can follow up and say, I noticed this, and here's a little hack for me to you do it electronically and do it on paper, not everybody responds in the exact same way.
• 14:30
  Becky Endicott: And I'm here to tell you a lot of your playing giving prospects are probably boomers right now, and they probably will love your paper copy even though I would probably like
• 14:38
  Jonathan McCoy: something I could do on mobile. Okay, and number five, if you're a nonprofit professional, you know, we're always going to preach growth mindset. So if you if this is new to you, you don't you don't have the tools available to you find a class find a seminar and dig in because knowledge is power, and we want to be lifelong learners here. And it's so helpful if you can just get some specific training Getting around this,
• 15:00
  Becky Endicott: okay, we're moving into pro tips. And these are just some elevated ideas that can kind of help get you started and pointed in the right direction. Number one is integrate playing, giving into your communications as much as possible. So the what we're talking about is anytime you send anything out to your donors, whether it's a solicitation, whether it's stewardship, whether it's an impact report, or if you're just, you know, doing a mass appeal on something, make sure that plan giving is a component of that communication. This can be, you know, listed as something like testimonials, it could be tips, it could be a column about how to do something, if there's a specific tax advantage to an IRA, rollover or something like that, but create some space to talk about playing giving all the time. And if you do nothing else, just put a little radio button at the bottom that says, I've included x mission in my will, or I'm interested in talking to someone about potentially including x mission in my will contact me such an easy thing. And I can think of several planned gifts that we got just by virtue of having that little button on the bottom.
• 16:17
  Jonathan McCoy: Love that tip.
• 16:17
  Jonathan McCoy: Okay, the other piece that we would really lift is just trying to understand your donor stories. So maybe these donors that have been in the annual giving world, you haven't had a lot of personal one on one attention to them. This is a great opportunity to just reach out and hear stories of people who have been giving loyal, because it's going to give you entry points for stewarding them better, and have an understanding if this would be a good fit for them to maybe consider a planned
• 16:42
  Becky Endicott: gift. Okay, I know there are those of you out there right now that are still not sold on planned giving and diving into this process. And I'm here to tell you, it's okay, because we got your back. And we have another suggestion for you, which is a point plan giving experts to your board. There are people within your community who love your mission who have an incredible skill set to understand the complexity of this. And so look at attorneys look at financial advisors, look at accountants, not only can they help you structure these assets, but they are incredible partners and mission, when they can almost identify and pitch you prospects who are their clients who could have value alignment. So there's like double synchronicity, they're
• 17:25
  Jonathan McCoy: so brilliant.
• 17:25
  Jonathan McCoy: And this is easy, you should have some sample bequest language, this could be on your website, it's something that you want to run through your legal team or your legal counsel. But it's just something that is easy for people to connect a plop into their will or something that's just copy and paste, change their percentage change their designation, and bada bing, bada boom, you just got a bequest,
• 17:48
  Becky Endicott: you're not going to be surprised that I put this one on here. But endowments are your best friend, for building and showing legacy. And endowments are something I feel really passionate about, because it is a sustainable source of income to your mission for ever.
• 18:03
  Becky Endicott: assuming it's not Kwazii and dad, which is much more complicated structure, just having a basic endowment ensures that what you're saying to your donor, about how their gift will be used beyond their life beyond their life is entirely and legally sound and cannot be broken.
• 18:23
  Jonathan McCoy: So good. Well, I hope this conversation leads to this. Don't let the complexity of plan giving hold you back.
• 18:30
  Jonathan McCoy: This is something that every team can embrace at some level.
• 18:34
  Jonathan McCoy: And you just want to start small, you know, start with connecting with those in your wheelhouse that can help advise you on this. And just start incorporating into your marketing and part of your the way you talk to your donors in your board. Because it really could be revolutionary. And again, you're planting seeds for tomorrow, maybe you won't see the fruit of that today. But you're planting seeds that are going to germinate into something amazing.
• 18:55
  Becky Endicott: And I think one other final pro tip that I would recommend to everybody because it ended up being a really great tool for me is exploring this advantage of hybrid giving. And we had a lot of success with you know, people are just not that liquid. These days, it's very hard to make a very large, major gift to an organization. And so if you compare cash with maybe a bequest or maybe some life insurance, I think there are ways that you can be really creative. And the beauty of doing that when you can pitch those sort of multiple opportunities to a donor as they feel so much more in control.
• 19:33
  Becky Endicott: And it feels much less scary that they're going to have to give away the entire farm. And if you're someone that just plays well in the sandbox, you can bounce from major gifts to plan giving and see that they're not mutually exclusive. You can employ both of them to help meet a donors ultimate dreams. And so that's really just what the secret sauce is. It's providing a great option for donors who are unable to provide a significant gift in the present.
• 19:58
  Becky Endicott: It gives them all the power and the ability to make that transformational gift on their terms at the right time, you know, in a space that works for them,
• 20:10
  Jonathan McCoy: you know what I'm giving is really not that scary is it?
• 20:12
  Becky Endicott: I hope we took the fear out of it for you, maybe even just a little bit.
• 20:16
  Jonathan McCoy: So plant those seeds friends.
• 20:19
  Julie Confer: Thanks for listening to our back to the basics conversation diving into plant getting, you probably hear it in our voices, but we love connecting you with the most innovative people to help you achieve more for your mission than ever before. We'd love for you to join our good community.
• 20:31
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• 20:48
  Julie Confer: I'm our producer Julie Confer and our theme song is sunray by Rumi boys. Boom thanks for being here.