Planned Giving for Small Nonprofits: Where to Start
One of the most effective ways for a small nonprofit to achieve long-term funding security is through a planned giving program. Although most smaller charities focus on annual donations, planned giving enables them to secure a future financial commitment from donors who want to create a lasting legacy through their contributions. This is usually offered by donors who have established a strong connection to the charity’s mission and wish to continue supporting it through their donation.
There are many reasons why small nonprofits choose not to offer a planned giving program. Most commonly, there are limited funds available for fundraising. However, with proper planning, even a small nonprofit can establish a planned giving program that can be extremely successful if it takes a systematic approach to implementation. Most importantly, a small nonprofit does not need an extensive budget or a large number of people working on the program.
Planned giving, which includes bequests, charitable gift annuities, and other estate-planning tools, provides donors with a way to give in accordance with their overall financial plan. In most cases, planned gifts will be among the largest donations a nonprofit will ever receive.
This guide provides a clear course of action in developing a planned giving program for your small nonprofit. It will provide you with the concepts you need to develop a planned giving program, along with the practical steps and strategies to implement it successfully. Following the guidelines enables you to establish a successful planned giving program that will assist your nonprofit with its future fundraising efforts and strengthen the agency’s relationships with its donors.
What Is Planned Giving and Why Does It Matter
Planned giving refers to charitable contributions made in advance, typically as part of a donor’s financial or estate planning. Nonprofit organizations depend on these future gifts because they represent upcoming financial resources that will help their fundraising efforts.
Planned giving enables small nonprofits to secure sustainable funding beyond their annual fundraising efforts. The program enables organizations to develop future funding sources while maintaining their ties with dedicated donors.
Legacy giving is the primary element of planned giving. Donors decide to allocate a percentage of their estate to support the organization that they consider important. This creates a lasting connection between the donor and the organization.
A planned giving program also signals organizational maturity. The nonprofit organization demonstrates its commitment to sustainability and impactful operations through its strategic planning of future development.
The first step in developing a successful program is for small nonprofits to understand how planned giving benefits their organizations.
Why Small Nonprofits Should Invest in Planned Giving
Small organizations often mistakenly believe that planned giving is only for big agencies and therefore miss out on a significant opportunity. However, they can also utilize planned giving very effectively. In fact, because small agencies typically have a closer relationship with their donor base, they have a distinct advantage in legacy planning.
Planned gifts are usually larger than regular annual gifts, and a small planned giving program can generate substantial amounts of revenue over time.
Another advantage of planned giving is that it requires relatively little management; therefore, it typically requires ongoing communication rather than large sums to establish.
In addition, the donor retention rate for donors who have committed to planned giving is generally excellent. Therefore, donors who commit to making a planned gift will typically remain involved with the organization for an extended period.
By investing in a planned giving program, small organizations can create multiple sources of revenue, reducing their dependence on any single source.
Common Types of Planned Gifts
To successfully implement a planned giving program, it is important to understand the various gift categories available to donors. Each gift category has distinct advantages for both the donor and the non-profit organization making the solicitation.
The most prevalent type of planned gift is a bequest to a nonprofit. Donors typically make a provision for their favorite charity(ies) in their will or trust by specifying a dollar amount or percentage to be allocated upon their death.
Other types of planned gifts include: charitable beneficiary designation, charitable gift annuities, and trusts. Each type of planned gift, as outlined above, offers donors different options based on their individual needs and preferences.
Planned gifts can provide an income stream to the donor during their life and may also provide cash flow after the donor’s death. Because of this variety, donors will have many opportunities to choose a gift option that will align with their financial situation.
For smaller organizations, often the best way to get started on creating a planned giving program is to focus on more basic types of gifts (such as bequests) that are easy to communicate to prospective donors and implement.
Understanding the different types of gifts available will enable your organization to effectively convey information and to create a successful planned giving fund.
How to Start a Planned Giving Program
Small nonprofits need to follow a structured approach when they start their planned giving programs. The process begins with defining goals and building internal alignment.
First, secure leadership support. Executives and board members need to understand the advantages of planned giving as they work together to develop this program.
Next, create basic policies and guidelines. The policies should define which gift types are acceptable, establish recognition methods, and set ethical standards.
Develop simple marketing materials. Your website should have a dedicated page explaining legacy giving, as it serves as an effective starting point.
Train staff and volunteers. All fundraising personnel need to learn how to identify and respond to planned giving opportunities.
Donors need to begin their conversations with organizations. Planned giving often begins with a simple discussion about long-term impact. A phased approach makes starting planned giving manageable and sustainable.
Identifying and Engaging Potential Donors
The process of selecting suitable audience members proves essential for achieving successful results. Long-term supporters are the most promising candidates. These individuals already have a strong connection to the organization. Older donors tend to be more willing to discuss legacy giving than younger donors, who should receive equal attention.
The process of establishing early connections lays the foundation for future relationship development. Donors who regularly give money, attend events, and participate in your mission activities should be your main focus. This behavior signals a deeper relationship with the organization.
The organization should use its engagement activities to educate people rather than to collect donations. Most donors lack knowledge about their planned giving options. Nonprofits can build trust with donors through their informational activities, which will lead to planned giving becoming a part of their legacy.
Building a Simple Planned Giving Strategy
A well-planned giving strategy will help keep your efforts focused and effective. The importance of simple and easy-to-understand planned giving strategies cannot be underestimated for small nonprofit organizations.
The best place to begin your planned giving efforts is by identifying your intended audience and primary gift types. This provides an opportunity to provide streamlined marketing and outreach.
Set achievable goals for your planned giving campaign, such as securing a specific number of bequest commitments within a designated period.
Incorporate your planned giving strategy into your current fundraising efforts. This will reduce duplication and increase your overall efficiency.
Stay consistent with your planned giving campaign; regularly communicating with your donors will help them remember it.
Utilizing a straightforward and clearly defined plan for your planned giving campaign will increase the likelihood of long-term growth and sustainability for your organization.
Creating Effective Messaging for Legacy Giving
A nonprofit’s messaging is an important piece of planned giving for small organizations. It needs to be respectful, inspiring, and clearly communicate the impact an individual’s gift will have, rather than focus on monetary details.
Donors will be motivated by the long-term impact their gift will have. Therefore, messaging should focus on legacy and continuity, helping donors understand how their gift fits into a larger whole.
Make sure you do not use any technical jargon or anything complicated. Keep things simple so that anyone can understand them easily.
Some good examples of effective messaging are:
- Focusing on long-term impact
- Sharing donor stories from the perspective of those who have benefitted
- Connecting a gift to the mission/ the desired outcomes.
When you create strong messaging, you will help to build emotional connections and encourage donors to participate in legacy giving.
Establishing Legacy Society Basics
Legacy societies are donor recognition programs for individuals who have committed to a planned gift. They are an essential part of the small nonprofit landscape in planned giving.
A key purpose of having a legacy society in place is to publicly or privately recognize and thank donors for their planned gifts, as they prefer.
Two significant benefits of participating in a legacy society are improved donor engagement and increased social proof for making a planned gift. When donors observe that other donors are engaging in planned giving, they are more likely to consider making a planned gift.
The basic elements that comprise the legacy society are as follows:
- Defined membership process
- Opportunity for recognition
- Ongoing communication
Simply having a legacy society in place can enhance your planned giving program and create stronger relationships with your donors.
Legal and Ethical Considerations
The legal and financial aspects of planned giving creation need to be approached carefully. Organizations should avoid providing legal or financial advice. The organization should advise donors to seek guidance from their financial experts.
The development of clear policies establishes a framework for organizations to carry out their ethical responsibilities. The policies need to define rules for accepting donations and protecting donor information, and maintaining donor intentions. Transparency is essential. Donors must fully understand the terms and implications of their gifts.
All agencies need to comply with existing regulations. The compliance requirements will differ depending on the location and type of donation received. Nonprofits can establish trust with their audience through ethical conduct, which also helps them safeguard their organizational reputation.
Marketing Planned Giving on a Limited Budget
The process of marketing planned giving for small nonprofits needs only minimal financial resources to succeed. The use of strategic communication methods delivers effective outcomes. Your current channels should serve as your starting point. The combination of email newsletters, websites, and social media platforms is an effective way to raise awareness of legacy giving programs.
Sharing impact stories demonstrates the value of planned gifts through concrete examples. The practice of consistent messaging produces more effective outcomes than organizations that operate at larger scales. The ongoing delivery of messages about planned giving maintains its presence to the public.
The process of awareness formation through board members and volunteer collaboration enables them to utilize their social connections. Agencies dedicated to planned giving need a resource-efficient strategy to support their core activities.
Measuring Success and Growing Your Program
Monitoring progress allows you to refine your planned giving strategy. An organization can utilize key performance indicators (KPIs) to track the success of its planned gift program. The primary KPIs to monitor are planned gift commitments, donor inquiries, and donor engagement.
Trend analyses should be completed. In collecting data over time, program managers can identify which approaches are working best. Creating change to the program is essential based on this data collection.
A company should go through a developmental process of expanding its program through incremental growth. The focus in developing planned giving should be on building relationships rather than achieving short-term success.
As an organization develops its program, additional gift options should be provided while continuing to enhance connections with donors. As organizations continue to establish planned giving programs, they will become reliable revenue streams for nonprofits.
Conclusion
Planned giving represents an effective and powerful way for a small nonprofit to build a more sustainable future. It also helps create a deeper relationship with donors. Initially, it may seem overwhelming, but if implemented strategically and gradually, it can be manageable.
By starting with simple options such as a bequest or a nonprofit arrangement, small nonprofits can lay the groundwork for their legacy-giving program. As time goes on, these beginnings can develop into a comprehensive planned giving program that supports a larger fundraising purpose.
Success in this arena is rooted in clarity, consistency, and building relationships with donors. When small nonprofits follow through on their commitments, deliver effective communications, engage thoughtfully with donors, and provide an ethical framework for operations, donors begin to trust the organization and participate in the overall fund development process.
Ultimately, the goal of planned giving is not just future revenue (to be used), but also the creation of a partnership with donors. When small nonprofits implement planned giving strategies with the right approach, they can ensure stability, growth, and sustained impact by building an ongoing relationship with donors who share their mission’s values.
FAQs
What is the definition of planned giving for small non-profits?
In planned giving, small nonprofits secure future gifts by securing contributions through estate planning or other long-term funding methods, allowing them to grow and thrive sustainably.
How can a small non-profit organization initiate a planned gift program?
A small non-profit can kick off its planned gift program by focusing on identifying options with its potential donors, creating basic policies for its planned gift offerings, and educating its potential donor base.
What is the most common way to provide planned gifts?
Bequests and charitable gift annuities are the most common forms of planned gifts for donors. Other forms include beneficiary designations and charitable trusts.
Is it necessary that small non-profits have legal expertise to help their donors with their planned gifts?
Although it is beneficial for a non-profit organization to have some legal expertise, there is no need for it to provide legal advice to a prospective donor. Instead, the role of a non-profit will be to encourage the donor to engage professional advisors to assist with their planned gift.
How long after implementing a planned giving strategy will a small non-profit organization see results?
Planned giving is a long-term strategy and may yield some initial planned gift commitments relatively quickly. The financial results from planned gifts take many years after implementation to materialize.