For most nonprofits, churches and synagogues, bequests are the most undervalued and under-accessed revenue stream. These end-of-life gifts can be used to enhance the quality of your programs and services, and in more and more cases they can serve as a financial safety net in the toughest of times. Established organizations with a significant number of prospects have the best chance for bequest success. If your organization, church or synagogue has 10 years or more of history and a market of at least 300 prospects, it is always the right time to start a Bequest Development Program. Here are some of the reasons why:
- It is estimated that bequests comprise upwards of 80% of all end-of-life charitable gifts.
- In 2011 charitable bequests totaled $24.5 billion, a 12.2% increase from the previous year.
- Various studies have indicated that 8-18% of decedents leave charitable bequests.
- Studies have also indicated that many more people would be willing to leave charitable bequests if asked.
- Like other major gifts, the relative development costs are low.
- In most instances, the majority of the prospect cultivation has already been done.
- Bequest prospects are easily identified and prioritized.
- Bequests do not compete with lifetime gifts and have been shown to positively impact lifetime giving.
- Bequests can mean millions of dollars in new, untapped revenue.
While the general case for bequest development is ongoing, evident and strong; there are several factors that make right now the opportune time to start. These include:
- The greatest generation of US philanthropists are aging. From our schools, to our churches, to our community agencies, they have built the institutions that provide essential programs and services to our communities and they care about what they’ve built. We have relied on them for support year in and year out and they have responded. What happens when they are gone?
- The Great Recession has negatively impacted the charitable giving of many of our donors. Particularly our older ones; those who are on fixed incomes. They are frightened that they might “outlive” their money and be left without resources. They want to help, but are reluctant to give at past levels or even at all. Gifts from their estates, particularly residuary and contingent ones, are less threatening to their sense of security than lifetime gifts. It gives them an opportunity to make a difference to the causes they are passionate about, forever.
- The Boomers, our largest generation, are at or approaching retirement age. As a result, many of them will be reviewing their financial and estate plans, and rewriting their wills and trusts. This is a great time for them to consider a charitable bequest.
- Estate and Gift Tax laws are in flux. While we do not know exactly what the changes will be, we do know that any changes will necessitate the review of financial and estate plans for many of our donors. These reviews offer the perfect time for them to consider and integrate a charitable bequest in their plans.
- The bequest development field is still not crowded. The competition for bequests is not nearly as intense as the competition for annual, capital and other lifetime gifts.
Can you imagine if your predecessors started a Bequest Development Program 5, 10 or 15 years ago? Think of how much easier it would be to manage the finances of your organization, church or synagogue today...
There is an old aphorism that goes something like this… the best time to plant a tree is 20 years ago. The next best time is now. As volunteers and professionals we have accepted the responsibility of leadership. Those of us with the wisdom to understand the positive and even existential impact a Bequest Development Program can have must find the courage to muster the resources to begin now.
By Irv Geffen, CoreStrategies Strategic Partner
Legacy Now Program