The Catholic Fundraiser

Dos and Don’ts for the Planned Giving Fundraiser

Posted by John W. Jensen on 5/3/16 8:30 AM

Dos and Don’ts for the Planned Giving Fundraiser

Fundraising success is made up of many things. Once you have identified a donor who finds your mission compelling, you have someone you can cultivate for future gifts of all sorts — or someone you can alienate and potentially lose as a donor. The difference is often, to a large extent, within your control.

Most of the basics of general fundraising apply also to planned giving fundraising, but a greater attention to the donor lifecycle is required. And (sometimes more complicated) noncash gifts can be especially important. Because the basics are so critical to fundraising success, it is a good idea to periodically step back and examine the details of how you are interacting with your donors.

Don’t let concerns about your lack of technical expertise be an obstacle to having conversations about noncash gifts. 

In most cases, you will be talking to a donor about making a gift that is simple to understand, such as a bequest or a gift from what may remain in a retirement plan. For more complicated gifts, your role is to generally describe the possible benefits and to interest the person in discussing it with a colleague or advisor.

Don’t get a donor’s name wrong. 

Nothing is more important — or as basic — as getting someone’s name right. When I managed the local chapter of a national charity, we checked each name on our donor file once a year to catch obvious errors in spelling. These days, you may also want to run all donor names through a spell-checking program, but even that will not catch every misspelling (consider Philip versus Phillip and the many ways to spell Catherine). You may be surprised at how many errors you will find when you take the time to check the names on your database.

Do acknowledge all gifts in a timely manner.

Even the most thoughtful thank-you letter will lose its impact if it takes weeks to reach the donor. Oddly enough, sending a delayed thank-you letter is more apt to occur with large gifts than with small ones. Why? Because these letters often need to be reviewed by multiple parties and signed and personalized by the CEO or others. Since more people tend to be involved with larger gifts, there is a sense that the thank-you letters for these gifts need to be “just right.” But, a “perfect” thank-you letter sent 3-4 weeks after the gift may be far from perfect from the donor’s perspective.

All thank-you letters should be mailed as quickly as possible after receipt of the gift. If the CEO can’t complete the letter in an acceptable time frame, another appropriate team member should send a note over his or her signature right away and then have the CEO send a more personal note of thanks a few days later.

Do update and personalize thank-you letters.

Look closely at your standard gift acknowledgment letters. Are they fresh and interesting, or boring and bureaucratic? Update them regularly and bring some of the same sense of excitement from your fundraising appeals to your thank-you letters.

Also consider handwriting a personal note at the end of the letter. While not always possible, this simple step can have a real impact that can strengthen the relationship. Donors will appreciate that you took the extra time to communicate with them in a more personal way.

Don’t leave out wording required by the IRS for gift receipt purposes.

Most people plan bequests and other legacy gifts because they want to make a difference, not to save taxes. In 2016 the estate tax exemption amount is $5,450,000, which means that few taxpayers have to worry about estate tax and there is little reason to focus on the tax benefits of legacy gifts. However, tax benefits are important to many high net worth donors and should be acknowledged in such a way that the donor may receive a tax benefit if that donor wishes.

Does every gift acknowledgment you send to the donors contain the language the IRS requires from donors who plan to deduct their charitable gifts? Charitable recipients are required to include this special tax wording in acknowledgment communications to those who have contributed $250 or more. In my experience, while most organizations’ regular gift acknowledgment letters contain the receipt language donors need, sometimes the more personalized letters thanking donors for larger gifts inadvertently leave out the necessary IRS wording.

Remember, without the required acknowledgment wording from your organization, your donor may not benefit from a charitable income tax deduction. This can cause real problems at tax time for larger gifts and may do needless harm to a relationship.

Don’t accept (or reject) any noncash gift without careful consideration.

Especially in the world of fundraising through planned gifts, noncash gifts can be important options. Many are surprised to learn that by making noncash gifts instead of cash they may be able to give more, maximize tax savings and possibly generate an income stream for themselves or loved ones.

However, more complicated noncash gifts might require special consideration. The best place to start when it comes to such gifts is by having an up-to-date gift acceptance policy outlining the various gifts that will and will not normally be accepted.

Ideally, as part of this policy, there will be backup information and perhaps a manual including topics, resources and a discussion about various types of gifts. This should be a document that is reviewed annually. Basic policies and guidelines should be approved and understood by senior staff and board members, although the more detailed manual and backup material usually does not get to the board level.

The nature and purpose of the organization will also often determine what kind of gifts may be offered and should be accepted. For instance, a music school may be well positioned to receive gifts of musical instruments because the gift is related to their mission and the staff should be knowledgeable of the instruments’ values, while a national health charity might have a more difficult time handling a gift of this type.

Similarly, an art museum may be capable and willing to handle gifts of most paintings and easily determine if they have value, either for the museum itself or on the open market.

Keep in mind that each charity’s gift acceptance policies will differ depending not only on the nature, mission and structure of the organization, but also on its risk tolerance, available expertise and fiscal capacity.

Don’t reject gifts simply because they are unusual or complex, but do investigate them carefully before accepting. Seek and accept gifts that are within your areas of expertise and interest, while making sure to get knowledgeable and qualified advice for gifts that are outside of your comfort zone.

Most importantly, make sure to factor in the real cost of staff time and effort for all gifts. Depending on the work and costs involved, the donor’s gift may sometimes be one you simply cannot “afford” to take because the ultimate cost to the charity in terms of time, staff engagement, fees and other costs may be more than the amount finally received.

Do consider donors’ ages when producing communication materials.

Are your communication materials designed with your readers in mind? Most national and Catholic direct mail donors are aging rapidly. The average age for Catholic donor files that Sharpe Group has worked with is typically in the 72-76 range.

We recently did an overlay for one successful Catholic group and found that nearly 60% were at least age 70 and 34% were over the age of 80. Keep in mind that eyesight weakens by age 45 — the age of bifocals. Unlike fine wine, eyesight rarely improves with age.

Catholic donors love gift annuities. The average age of a charitable gift annuity donor is 79. Repeated Sharpe Group studies show that bequests are most likely to come from people who make their final plans at around the same age.

These 11 guidelines will ensure that your material is senior-friendly.

  1. Use a large and comfortable typeface — 13 or 14 point is best.
  2. Use italics rarely or not at all.
  3. Left justify your text.
  4. Indent every paragraph.
  5. Keep sentences, paragraphs and line lengths short. No paragraph should be more than 7 lines.
  6. Use high contrast materials.
  7. Avoid cluttered background screens of photos or text. 10-20% light color screens are best when highlighting for senior eyes.
  8. Be cautious using reversed type.
  9. Watch out for glossy paper stock that is hard on senior eyes due to the way light reflects back.
  10. Remember reading levels. Write for 6th-9th grade levels — even if the readers all have graduate degrees.
  11. Design communications for older readers and everyone will be able to read it. Design for younger donors and you may lose your larger gift prospects entirely!

Don’t ignore older donors whose giving has lapsed within the past few years.

Remember also to devote appropriate attention to your older, frequent donors, even if they no longer respond to communications. Seniors consistently comprise one of the wealthiest generational cohorts in history, and many will soon be making their final estate plans. Stay in touch with these donors — particularly long-time donors, single or childless people and those who have a history of volunteering.

Do visit your donors.

There is no substitute for face-to-face interaction with donors when possible. The bee that hangs around the hive never gets the honey!

When personal visits are not practical, regular phone contact, personal notes and even personal holiday or birthday cards can also boost relationship building and donor stewardship.

Remember, simply helping donors feel more connected to your organization through visits either in person or by phone can increase giving substantially. We have all heard people give to people, so be sure your donors know you well enough to call on you when they are ready to consider their next gifts.

Whether you are reaching a donor through one-time or small monthly donations, special events, a capital campaign or planned gifts, your donor should always be at the center of your plan. Knowing who your donor is and making him/her feel like an essential part of your mission is critical to any successful fundraising program.

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Topics: Donor Development, Nonprofit Galas, Planned Giving


Written by John W. Jensen

John W. Jensen, CFP®, is based in Washington D.C. and has worked with more than 80 nonprofits to improve their planned giving performance. John was previously the Development VP at both The Nature Conservancy and the National Wildlife Federation. For more than 50 years Sharpe Group has led the way in helping America’s nonprofits maximize their funding. The Sharpe team provides numerous resources to help clients maximize their efforts to ensure current and future financial stability. To learn more about how the Sharpe team can augment your program, visit www.SHARPEnet.com or contact us at 901.680.5300 or info@SHARPEnet.com.