Latest / PGgrowth - Planned Giving podcast / NO 108: Why is Planned Giving SO Important to Your Charity’s Future?

Transcript

NO 108: Why is Planned Giving SO Important to Your Charity’s Future? · PGgrowth - Planned Giving podcast

• 0:00
  SPEAKER_01: The PG Growth Podcast.
• 0:22
  SPEAKER_01: Thank you for joining me on the PG Growth Plan Giving Podcast.
• 0:26
  SPEAKER_01: I'm Ed Sluga.
• 0:28
  SPEAKER_01: Over the last little while, we've been talking a little bit about plan giving programs.
• 0:32
  SPEAKER_01: We've been talking about the advice the sector is being given.
• 0:36
  SPEAKER_01: We're talking about some of the ramifications of that, broken programs, ones that aren't fully working at the level that uh organizations would like them to, or in some cases, they don't even know they would like them to, but they're definitely not maximizing the support that's out there amongst their donor base.
• 1:00
  SPEAKER_01: Uh, and definitely what we're seeing is that there are not many programs that have moved from this marketing-driven plan giving activity to truly moving into a gift planning activity, one that uh has its main function is reaching out to donors and speaking to them.
• 1:21
  SPEAKER_01: Uh, of course, that's where the larger gifts come in.
• 1:25
  SPEAKER_01: And if you are someone who is connected with the PG Commons, there is a wonderful webinar that we have there called Being at the Table, which talks about gift planning and how to maximize revenue from this area of fundraising.
• 1:40
  SPEAKER_01: We've been talking about that and some of the broken telephone of information that's coming and pick your experts uh correctly and wisely.
• 1:51
  SPEAKER_01: Your mentors should have deep, deep knowledge and deep, deep experience.
• 1:56
  SPEAKER_01: Uh, and why are we talking about that?
• 1:58
  SPEAKER_01: We're talking a lot about that.
• 1:59
  SPEAKER_01: You know, why is plan giving so important?
• 2:03
  SPEAKER_01: We regularly talk about the value of plan giving uh and why organizations need to lean into this.
• 2:11
  SPEAKER_01: And one of the key parts of that is the fact that most plan giving programs across the country are very undervalued.
• 2:20
  SPEAKER_01: There are lots of additional dollars and support that could be gained from organizations that are out there right now thinking that they have a plan giving program that is maximizing value.
• 2:34
  SPEAKER_01: They're thinking that because they have nothing to compare that with, or they're comparing it to all the wrong things.
• 2:41
  SPEAKER_01: Um, and so there's lots of untapped resources here, and that's in a time where annual fund is harder and harder and harder to just maintain, let alone grow.
• 2:53
  SPEAKER_01: This is a really difficult time for annual fund.
• 2:56
  SPEAKER_01: It's it too is fractured in the way that we can connect with people.
• 3:01
  SPEAKER_01: The other thing about it is major gifts, which often is the other place to go.
• 3:06
  SPEAKER_01: Major gifts um, you know, are in such competition right now.
• 3:12
  SPEAKER_01: And the reality is that more and more organizations are in campaign, more and more organizations are relying on major gifts to fulfill that.
• 3:21
  SPEAKER_01: And that is in the light of, again, the donor advice fund momentum that's going on right now.
• 3:28
  SPEAKER_01: Far too often, donor advise funds are considered to be plan gifts.
• 3:31
  SPEAKER_01: They are not plan gifts.
• 3:32
  SPEAKER_01: If somebody is giving you a gift today of publicly listed securities to fund a donor advice fund, every charity in the country would consider that to be the intent is to create a gift today, and the the gift itself uh is realized today, um, and so is the tax receipt.
• 3:54
  SPEAKER_01: Now, again, this is where the donor advice fund notion is all over the map, because lots of people driving donor advice funds don't think that every endowment or every private foundation is a planned gift.
• 4:07
  SPEAKER_01: These are this is not true.
• 4:09
  SPEAKER_01: Intent matters.
• 4:11
  SPEAKER_01: Why am I doing this?
• 4:13
  SPEAKER_01: Am I doing this truly as a planned gift, as a deferred gift, or am I doing this for a current reason and I'm satisfying this current reason?
• 4:25
  SPEAKER_01: Um, it seems like the donor advised fund people, many of them advisors, many of them, if they ever worked in charity, are a long way away from having worked in charity.
• 4:34
  SPEAKER_01: I can give some direct examples of people who are former charity people now working in donor advised funds, frankly, degrading the charitable world when they talk about donor advised funds and not really ever having any experience of their own.
• 4:51
  SPEAKER_01: Deep, deep experience.
• 4:52
  SPEAKER_01: I want to talk about that, uh, that deep experience, which is years of operation of a truly proactive plan giving program.
• 5:01
  SPEAKER_01: Uh, it's not there.
• 5:02
  SPEAKER_01: Look at their resumes, they really don't understand it.
• 5:05
  SPEAKER_01: And so they're conflating, they are getting mixed up in their heads and in their marketing materials.
• 5:11
  SPEAKER_01: What a donor advice fund is.
• 5:13
  SPEAKER_01: It's a major gift most of the time.
• 5:16
  SPEAKER_01: Uh, just like every other securities donation is a major gift most of the time today.
• 5:22
  SPEAKER_01: We can get back to 1996 when this was all created.
• 5:25
  SPEAKER_01: We can talk about the journey from it being an asset gift equaling a plan gift to what it is today in most charities across the country.
• 5:33
  SPEAKER_01: It's a major gift.
• 5:34
  SPEAKER_01: So, okay, annual fund is being uh you know threatened because of just this fractured nature of connecting with people.
• 5:42
  SPEAKER_01: Um, major gifts, more and more and more competition out there.
• 5:46
  SPEAKER_01: Where's the growth in revenue?
• 5:48
  SPEAKER_01: It's in plan giving.
• 5:49
  SPEAKER_01: That's where the growth in revenue is.
• 5:51
  SPEAKER_01: And this relates to this great chair, this transfer of wealth.
• 5:56
  SPEAKER_01: And this transfer of wealth is happening.
• 5:59
  SPEAKER_01: It's happening with very large, uh, high net worth individuals.
• 6:03
  SPEAKER_01: They're not necessarily large, but they're high net worth individuals with large fortunes or uh significant amount of um asset base, and and uh so they're they're going to be transferring that, but everyone's going to be transferring it.
• 6:18
  SPEAKER_01: You know, I often talk about the neighborhood I grew up in in the uh western part of Toronto, where in the 60s and early 70s you could buy a home for uh$20 or$30,000.
• 6:33
  SPEAKER_01: All of those homes right now are worth over a million dollars.
• 6:36
  SPEAKER_01: There are quiet millionaires everywhere right now, and they can also make that transfer, be part of that transfer of wealth.
• 6:43
  SPEAKER_01: And what we have seen, and the research bears this out, and we have research that shows that in bad economic times, plan giving is not affected by the downturns, and we're feeling this pressure.
• 6:57
  SPEAKER_01: It's not a bad economic time just yet in Canada, but it is uh in it, there's lots of pressure here.
• 7:06
  SPEAKER_01: So, why is it so important?
• 7:08
  SPEAKER_01: More and more organizations are seeing more of their revenue, percentage of the revenue that they're realizing coming out of this area of fundraising.
• 7:18
  SPEAKER_01: And so it's incredibly important to think about this area of this untapped resource that's just there regularly.
• 7:29
  SPEAKER_01: Then you place into this new transfer of wealth that is happening.
• 7:35
  SPEAKER_01: Uh, and you can see that it's enormously important, this area of fundraising.
• 7:42
  SPEAKER_01: And it's one that needs to be set up properly, it needs to be done patiently, it needs time to move forward.
• 7:51
  SPEAKER_01: And that is the best way to start getting value from this area of plan giving, and making sure that that value increases uh year in and year out and becomes a larger percentage of your overall revenue.
• 8:11
  SPEAKER_01: And so when we think about plan giving programs, what we are saying essentially is that a plan giving program should be uh not a nice to have, not a neat thing to do.
• 8:23
  SPEAKER_01: Um, hey, here's some marketing activity you can do.
• 8:27
  SPEAKER_01: Um, and and you know, I I did this for a couple of years over here and it kind of worked.
• 8:32
  SPEAKER_01: We are talking about a setting up a business unit of your organization that should be bringing in 25 plus percent of all annual revenue.
• 8:44
  SPEAKER_01: And when you are setting up a program of this kind, that is what you're looking at.
• 8:49
  SPEAKER_01: It's not a nice kind of cool thing to have.
• 8:51
  SPEAKER_01: And boy, I've done a little bit of work here and it'd be fun.
• 8:54
  SPEAKER_01: And I know I'm being flippant there a little bit, but the reality is that this is a significant opportunity in your database for you to raise more money.
• 9:08
  SPEAKER_01: We have conversations with organizations all the time, and those conversations often, it's happening less and less, uh, but it has been for years.
• 9:19
  SPEAKER_01: Uh, we're not ready for plan giving.
• 9:21
  SPEAKER_01: Or we're doing a little bit around plan giving, but we're not moving into that yet.
• 9:26
  SPEAKER_01: Um, that's one argument we will hear from leadership.
• 9:30
  SPEAKER_01: The other argument we will hear from leadership uh in organizations is that we're fully committed to plan giving.
• 9:37
  SPEAKER_01: The CEO or executive director or VP of fundraising or development or advancement, whatever their title is, will say we're committed, and so is the board.
• 9:47
  SPEAKER_01: The board is committed, we're all committed to this.
• 9:51
  SPEAKER_01: We just have no resources to uh apply to it, no staffing resources and no uh non-staff resources.
• 10:01
  SPEAKER_01: And again, these are wonderful statements, uh, which are though simply statements.
• 10:07
  SPEAKER_01: Uh, when you are actually developing a plan giving program, you are developing a business unit.
• 10:13
  SPEAKER_01: And what it can do is transform your organization's future, it can transform how your organization will look at fundraising forever if you put into uh place a properly constructed program that banks on this deep knowledge and banks on this these best practices, not something that someone just made up, uh, but really this fundamental approach uh to uh operating this sort of program.
• 10:50
  SPEAKER_01: And if you're truly driving those revenues into an area that can underpin an organization, your organization's financial future, uh, then you're in a tremendous opportunity.
• 11:06
  SPEAKER_01: Now, I understand that the university or higher education sectors often are seen to have a better position for playing gifts, and they do, and they do because they can talk about endowment, I think, a bit more freely than say healthcare or social services or arts.
• 11:23
  SPEAKER_01: Uh, you know, arts have endowments uh and they're kind of next to education organizations around endowment.
• 11:31
  SPEAKER_01: Um, but what we're trying to do, and I think every uh university, college, uh, you know, any school that can provide a charitable tax uh receipt, every arts organization needs to ask itself this big audacious question.
• 11:50
  SPEAKER_01: How big of an endowment would we need to offset our entire entire operating expenditure on a yearly basis?
• 11:59
  SPEAKER_01: So if your operating expenditure is five million dollars a year, how big of an endowment would we need?
• 12:07
  SPEAKER_01: I think that would be$100 million.
• 12:11
  SPEAKER_01: We need$100 million in endowment, and then use that as a goal, and then deconstruct a pathway toward that.
• 12:20
  SPEAKER_01: Now, what's the chance of a charity that is a$5 million operating expenditure getting to a$100 million endowment soon?
• 12:29
  SPEAKER_01: It's very small.
• 12:30
  SPEAKER_01: I'm going to tell you that.
• 12:31
  SPEAKER_01: It's very, very small, but that's the big thinking that needs to go into this activity.
• 12:39
  SPEAKER_01: And that big thinking isn't just an achievable goal, it is opening up the imagination around what can be done.
• 12:51
  SPEAKER_01: This big thinking uh allows for the positioning a program of this kind correctly within the mind of the organization, uh, and it also understands the patience that's necessary.
• 13:08
  SPEAKER_01: Again, as we talked about in previous uh podcasts, there's too much discussion about it's easy, follow these two, three things, um, and you'll be fine.
• 13:19
  SPEAKER_01: And I did it once, and you could probably do it too.
• 13:22
  SPEAKER_01: These are not appropriate ways to approach a program of this significant opportunity.
• 13:29
  SPEAKER_01: Now, that's really interesting, and most people, when I mention things like that, they immediately go to two places.
• 13:37
  SPEAKER_01: One is we as an organization cannot go there.
• 13:42
  SPEAKER_01: And the other one is me as the individual professional have no idea how to go there.
• 13:48
  SPEAKER_01: And I would suggest that both of those things are not true.
• 13:53
  SPEAKER_01: Uh let's take the second one first.
• 13:56
  SPEAKER_01: The second one actually helps you to uh have the attitude towards the first one.
• 14:03
  SPEAKER_01: You, as an or as a professional, don't need to be an expert at this, you need the proper experts to help.
• 14:09
  SPEAKER_01: And but you need to gain information as you go along and be better at what you're doing.
• 14:14
  SPEAKER_01: The the idea that you have to be this all-knowing, all-seeing person who's going to make this happen is not true.
• 14:23
  SPEAKER_01: It's not true, and don't worry about that.
• 14:25
  SPEAKER_01: Just reach out to the right people and they will help you get there.
• 14:29
  SPEAKER_01: Uh, again, but who are the right people?
• 14:31
  SPEAKER_01: See previous podcasts uh around this.
• 14:34
  SPEAKER_01: Uh, and you can find your way there.
• 14:37
  SPEAKER_01: Whether and my great mentor who I mentioned last time in our last podcast with Grant Monk, Dr.
• 14:43
  SPEAKER_01: Edward Pierce, of course, who ran the Salvation Army program and also in Canada, and also ran Queen's University program in Canada, incredibly successful programs.
• 14:53
  SPEAKER_01: Used to always say, yes, I worked in these very large programs, but if you have a hundred loyal donors and you ask them all for a planned gift, chances are 10 of them will consider it.
• 15:04
  SPEAKER_01: And if you ask them each year, your top 100 loyal donors who haven't already made a plan gift to you to make a gift, 10 of them will consider it.
• 15:13
  SPEAKER_01: And it just changes your attitude towards the entire process.
• 15:17
  SPEAKER_01: Every organization can do this.
• 15:19
  SPEAKER_01: Proactive doesn't mean big, it means just that.
• 15:23
  SPEAKER_01: You're actively reaching out.
• 15:25
  SPEAKER_01: Doesn't mean you need a lot of resources, you just need allocated resources, you need commitment.
• 15:31
  SPEAKER_01: Um, when you do that, when you do that, success is there for you to achieve.
• 15:38
  SPEAKER_01: So um, so that's one, that's the profession.
• 15:42
  SPEAKER_01: And as soon as you get past that, then you understand that the other uh option is there.
• 15:48
  SPEAKER_01: The other option is there.
• 15:51
  SPEAKER_01: What's the timeline of that option?
• 15:53
  SPEAKER_01: And I understand the pressures.
• 15:55
  SPEAKER_01: I've been on that side of it, the pressures, both uh working as an employee and working as a consultant, uh, consulting with organizations.
• 16:04
  SPEAKER_01: We need the dollars today.
• 16:05
  SPEAKER_01: We need tell us today, or when can we start seeing revenue from this?
• 16:10
  SPEAKER_01: And when I first started working as a plan giving consultant, I remember having conversation after conversation with organizations that have just received some either initial bequest gift or a transformational bequest gift.
• 16:24
  SPEAKER_01: And they were calling because they wanted to see how they could get more of those.
• 16:29
  SPEAKER_01: Uh, and then when unpacking it, what they really meant was how can I get more of these by the end of the year, by the end of the fiscal year, that patience is necessary.
• 16:39
  SPEAKER_01: Patience is the key.
• 16:41
  SPEAKER_01: Patience is what we are always talking about and trying to get for organizations.
• 16:49
  SPEAKER_01: But once you have knowledge, or whether you acquire it or you build it in yourself, then suddenly you think, yeah, I think that over the course of a patient buildup, we could probably achieve that.
• 17:01
  SPEAKER_01: We can achieve this audacious goal.
• 17:03
  SPEAKER_01: Will it happen in the next five years?
• 17:05
  SPEAKER_01: No, of course not.
• 17:06
  SPEAKER_01: Will it happen in 10 years?
• 17:08
  SPEAKER_01: Probably not either.
• 17:09
  SPEAKER_01: But do we see a pathway, the long-term pathway to this activity?
• 17:14
  SPEAKER_01: Uh, once you open up both of those, then you see how powerful, how important planned giving is to every organization.
• 17:21
  SPEAKER_01: As I said earlier in another podcast, there are three ways to raise money: annual fund, major giving, plan giving.
• 17:30
  SPEAKER_01: And if you are uh not fully engaged in plan giving, uh you are missing an opportunity.
• 17:39
  SPEAKER_01: And then finally, one of the things, and this is not to scare, but it's just to inform the reality is that you have loyal, loyal donors to your organization.
• 17:52
  SPEAKER_01: And oftentimes we think, well, I have these loyal donors, and eventually I will do this properly, and eventually I'll reach out to them.
• 18:00
  SPEAKER_01: And that's wonderful.
• 18:03
  SPEAKER_01: But remember, those loyal donors are loyal to other organizations as well.
• 18:08
  SPEAKER_01: And they are being right now approached by other charities, and maybe they're being approached by their advisors now, who again are thinking of this as a plan gift and not a major gift, but they're being approached.
• 18:23
  SPEAKER_01: And if we're not in the game, uh then any opportunity to achieve this big audacious goal just simply goes away.
• 18:32
  SPEAKER_01: We need to be at least in the game, but doing it properly from the outset will absolutely solidify your program in such a way that it truly is this important addition to your fundraising activity.
• 18:48
  SPEAKER_01: Over the course of the next few podcasts now, as we move on, we're really going to start leaning into various actual practical things that can be done so that you can start uh building both your knowledge base, but also taking steps to uh start building this up.
• 19:12
  SPEAKER_01: And we're going to be leading through some of the steps you need to take, taking you all the way to some learning opportunities that we're going to be talking about uh later on in the podcast.
• 19:22
  SPEAKER_01: So thanks again for listening.
• 19:24
  SPEAKER_01: Remember, follow us on um Apple Podcasts, on Spotify, send us a note to ed at pggrowth.com if you have any comments.
• 19:35
  SPEAKER_01: Uh check our website out.
• 19:37
  SPEAKER_01: It's uh you can subscribe to our weekly e-blast.
• 19:41
  SPEAKER_01: Um, and remember, um, this is a job that there are really experienced people that can walk alongside you to do.
• 19:50
  SPEAKER_01: So don't be overwhelmed, feel good about it, and you'll get there.
• 19:55
  SPEAKER_01: Thanks again for listening.
• 20:02
  SPEAKER_00: Thank you for listening to the PG Growth Podcast.
• 20:04
  SPEAKER_00: If you're looking for more resources about planned giving or just hoping to learn more, we recommend checking out PG Growth's new membership space, PG Commons.
• 20:13
  SPEAKER_00: Head to PG Growth.comslash podcasts and click the PG Commons button to access your 30-day free trial now.